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sts.components.contact.mr.placeholder Sebastian Webel
Mr. Sebastian Webel

Editor-in-Chief

Tel: +49 (89) 636-32221

Fax: +49 89 636-35292

Werner-von-Siemens-Straße 1
80333 Munich


sts.components.contact.mr.placeholder Arthur F. Pease
Mr. Arthur F. Pease

Executive Editor English Edition

Tel: +49 (89) 636-48824

Fax: +49 89 636-35292

Otto-Hahn-Ring 6
81739 Munich
Germany

Pictures of the Future
The Magazine for Research and Innovation
 

Sustainable Power Generation

The Future of Energy

In many countries, the future of energy is now at the very top of the agenda. Sustainability and efficiency are the keys to the successful transformation of energy supplies.

Around the world, regional energy markets have one thing in common: a need for sustainable energy sources and a growing focus on natural gas as a solution. The US, Asia and Europe are cases in point.

In many countries, the future of energy is now at the very top of the agenda.  Demand for electrical power is growing three times as fast as the world’s population. By 2030, global electricity requirements could increase by two-thirds. At the same time, the challenges facing energy markets could scarcely vary more. While energy demand is increasing, cost-efficiency and, in some cases, climate protection are at the top of the agenda in most industrial countries. In all economies, however, sustainability and efficiency are essential.

Natural Gas: Bright Future

One energy source – natural gas – could play a major role in this context. According to the International Energy Agency (IEA), gas has a golden future: by 2035, it could be providing a quarter of the world’s energy – up from one-fifth today.  By 2030, natural gas could surpass high-emission coal as an energy source.

And it would be a good thing for the world’s climate if it did. Why? Because gas-fired power plants emit substantially less CO2  than the coal conversion technologies that now dominate energy production. And they also have another advantage: gas-fired plants can be ramped up very quickly, enabling them to compensate for sudden declines in output from renewable sources when the wind drops or the sun doesn’t shine. Siemens would profit from a future gas boom since its portfolio already includes everything from solutions for natural gas production to complete gas-fired power plants. The company’s H-class gas turbines are a bestseller. Since their market launch in 2011, Siemens has sold 28 of these high-performance systems worldwide.

As a glance at the following markets shows, the company’s high-efficiency solutions for gas-driven power generation are already having a significant impact on energy supply worldwide: in the U.S., in Asia and in Europe.

USA: Reducing Prices and CO2 Emissions

The U.S. now accounts for about one-sixth of global energy demand, and its appetite continues to grow. At the same time, however, the U.S. is one of the few energy markets where CO2 emissions are declining. In 2012 alone, its CO2 emissions fell by some six percent as  it replaced dated coal-fired power plants with new gas-fired plants.

The main factor behind the boom in gas-fired power plants is the low price of natural gas, which is increasingly being produced from so-called “unconventional sources.” Thanks to the growing exploitation of such sources, the U.S. is slated to become the largest producer of oil and, above all, gas. What’s more, with the aim of diversifying its energy supply, the country also intends to expand its use of renewables.

And Siemens will inevitably be a key player. In the U.S. The company has already sold 13 H-class gas turbines – most of which were manufactured in the USA. To ensure that this booming market is well served in the future, a new Siemens plant in Charlotte, North Carolina began manufacturing gas turbines, steam turbines and generators at the end of 2011.

Power for 460,000 Households

In addition, since December 2013 Siemens has been awarded contracts for wind turbines with a total capacity of 1,500 megawatts (MW) – enough power to meet the electricity needs of 460,000 U.S. households. This includes the largest order to date for onshore wind power (1,050 MW). With the U.S. market currently in upheaval, developments promise to be exciting. Already, energy prices are falling and as a result the economy is growing while CO2 emissions are nevertheless declining – a combination viewed with envy in many energy markets.

Asia: Exploding Demand

In Asia as well, high-efficiency gas-fired power plants are almost always a key to sustainable energy supply. China, for example, is hungry for electricity: The world’s second-largest economy consumes 4,000 terawatt-hours (TWh) of electricity per  year. According to the IEA, this figure will double to 8,000 TWh by 2030.

That’s why power generation and demand must become more efficient in China. Plans call for the country to achieve a more balanced energy mix by 2030. Although coal-fired power plants will still play the leading role, renewables will gain in importance. For example, China is aiming to increase its installed wind farm  capacity  from today’s level of 60 gigawatts (GW) to 150 GW in 2020. However, the growing use of renewables exacerbates the risk of power grid fluctuations when there is no wind or the sun does not shine.

High-efficiency combined cycle power plants that can be quickly ramped up  can address this concern. Siemens has already built several such plants in China. At the Shanghai Shenergy Lingang plant, for example – which won the Asian Power Award for the best gas power project in October 2012 – each of the four blocks equipped with an F-class turbine from Siemens can be ramped up in just ten minutes. In the future, this Siemens technology could help offset grid instability when fluctuating renewables account for a large share of the energy mix.

Turnkey Plant for Vietnam

Combined cycle plants are also helping improve power supply in Vietnam, one of Southeast Asia’s most rapidly growing economies. The demand for electricity in Vietnam is expected to soar by as much as 14 percent a year until 2020. However, due to insufficient capacity, the country is plagued by blackouts.  Vietnam’s energy master plan for 2011-2020 calls for  its present capacity to be tripled – with the help of facilities such as the turnkey 730-MW Nhon Trach 2 combined cycle plant from Siemens, which features SGT5-4000F turbines.

Some 3,000 kilometers away, South Korea is placing its bets on the latest H-class gas turbine family. The country, which has ordered eight of the turbines, has very few energy reserves of its own and must import fuels such as liquid natural gas (LNG), making power plant efficiency all the more important. A one-percent increase in the efficiency of an 800-MW plant generates an additional 60 million kilowatt-hours of electricity annually, or enough to supply roughly 30,000 more people with power – without increasing fuel costs or CO2 emissions.

Europe: Ambitious Targets

The European Union (EU) is one of the world’s largest and most important economic zones. Four of the EU’s 28 members are among the top ten leading industrial countries worldwide. However, this economic clout is built on great dependency: Europe has virtually no energy resources of its own.

In order to achieve greater independence from fossil fuels while cutting CO2 emissions, the EU has launched the so-called 20-20-20 targets defining three key objectives for 2020: reduce greenhouse gas emissions in the EU by 20 percent compared to1990 levels; improve the EU’s energy efficiency by 20 percent; and increase the share of renewables in the EU’s energy mix to 20 percent.

À la carte Energy Policies

However, as things currently stand, it will be anything but easy to reach these targets. Not only are geographic  differences making it difficult to implement the 20-20-20 program. Europe still lacks uniform energy policies and an integrated energy market. For the reasons stated above, targets like 20-20-20 and Germany’s even more ambitious energy transition are fundamentally important. But they can be achieved only if efforts are coordinated at the European level. For instance, although renewable energy generation is are being expanded in Germany, emissions are on the rise – because old, environmentally harmful coal-fired power plants can generate inexpensive electricity.

This situation has arisen primarily due to the EU emissions trading system, under which prices for CO2  emission allowances remain extremely low because too many allowance certificates are on the market. At the same time, excess supplies of renewably-generated electricity in Germany now quite often also lead to a surplus of electricity in neighboring countries.

What’s Needed is already Here

As a result, in much of Europe, it is no longer always possible to operate high-efficiency power plants at a profit, and there is certainly no interest in building new ones. The good news? If these political challenges can be solved, Europe will be poised to make the transition to a new energy system. Whether wind farms, smart grids, electricity superhighways, high-efficiency gas-fired power plants or real energy-saving innovations for industry, buildings and transportation: the technologies are available today – and most of them can be found in Siemens’ portfolio.

Sebastian Webel