Editorial - VGB PowerTech Journal 12/2014

Understanding change as a chance

The business model of conventional energy producers has changed significantly due to the development of renewables. New frame conditions affect the technical design and the operation mode of conventional power plants. Power plant operators will have to face the challenges of the “Energiewende” (turnaround in energy policy) if they want to operate plants energyefficiently and profitably in the future. Changes in the energy business have mainly an economic impact. Independent from environmental reasons and system changes caused by that, operators uphold the requirement of “Technical leadership to overcome economic challenges”. Therefore, participants of the VGB Congress “Power Plants 2014” were intensively discussing the options how to further support the “Energiewende” with technical and technological improvements.

Flexibility options in the electrical energy system offer significant potential. Among others, technical innovation includes the flexibility of the entire power plant fleet. Making lignite-fired power plants more flexible has become a major corporate goal of the Vattenfall Europe Generation AG. This is done by retrofitting our plants in order to run them in optimised operation mode, so that they can become more flexible as well as more efficient. So we will save resources and reduce emissions while still guaranteeing security of supply. By using the innovative dried-lignite technology, the minimum load of our power plants can be reduced from 35 % to as low as 20 %. That means that during times when there is a surplus of solar and wind power, our power plants can be operated at very low load levels, even for a longer period of time, and, nevertheless, can be online again quickly if needed. A new combustion system based on dried lignite is currently being tested in one of our boilers at the Jänschwalde power plant.

The next step will be the large-scale implementation in the respective plants. However, power plant operators have to rely on politics and promises made by it. In the past, this has not always been the case when you think of issues like Carbon Capture and Storage (CCS) or nuclear energy. Despite these problems, utilities have always been adapting their business models to the new circumstances. They have proved that they are willing to do their share in the sense of technical leadership. In order to act effectively and sustainably, frame conditions made by politics need to be long-term.

From an economical point of view, the “Energiewende” has changed the situation for operators of conventional power plants completely. In the field of renewables, market mechanism and price function were annihilated at a very early stage in the development. This led to the ridiculous situation that an increasing amount of energy generated by renewables resulted in increasing prices which were then burdened on the customer. Operators of conventional power plants still have to compete in a contracting market. Considering a lifetime of approximately 40 years for a conventional power plant, investments to increase flexibility have to be chosen wisely.

We all have to keep in mind that our country’s wealth depends a lot on investment-friendly circumstances. This is true not only for the energy industry but has an impact also on other energy-intensive industries in our country. A carbon-leakage process must not focus on environmental compatibility only. The “Energiewende” can be successful even without completely overriding market conditions. Politics has the chance to continue its path of liberalisation, started in the late 1990ies, in order to develop efficient solutions for the economy. Therefore, it will be necessary to further rely on European solutions such as the “European Emission Trading System”. On the other hand, market mechanisms have to be introduced for renewables as well, in order to guarantee boundary conditions for the “Energy Only Market” that will allow technology-open solutions.

I am positive that the “Energiewende” will be successful if market, climate protection and security of supply are considered in an appropriate proportion based on realistic judgment and guidelines. Both renewables and conventional power plants will have their role in the energy mix of the future. Both will have to meet technical challenges and I am convinced that respective solutions will be found.

So let’s keep on working. I wish us a prosperous year 2015.