The Future Role of Coal in Europe
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Final Report The Future Role of Coal in Europe commissioned by: EURCOAL et. al. Friedrich Seefeldt Marco Wünsch Dr. Michael Schlesinger Berlin & Basel, 30.06.2007 Chief Executive Officer (CEO) Christian Böllhoff President of the Administrative Board Gunter Blickle Founded 1959, in Basel, Switzerland Legal Form AG according to Swiss Law Registry: DE-Berlin HRB 87447 B Occupation European-wide, Prognos develops practical strategies for enterprises, organisations and the public sector on the basis of authorative and objective analyses. Working Languages German, English, French Headquarter Prognos AG Aeschenplatz 7 CH - 4010 Basel phone +41 61 32 73-200 fax +41 61 32 73-300 [email protected] Other Locations Prognos AG Prognos AG Goethestr. 85 Wilhelm-Herbst-Straße 5 D - 10623 Berlin D - 28359 Bremen phone +49 (0)30 520059-200 phone +49 (0)421 2015-784 fax +49 (0)30 520059-201 fax +49 (0)421 2015-789 Prognos AG Prognos AG Schwanenmarkt 21 Rue de Luxembourg 19-21 D - 40213 Düsseldorf B - 1000 Brüssel phone +49 (0)211 887-3131 phone +32 2 51322-27 fax +49 (0)211 887-3141 fax +32 2 50277-03 Internet www.prognos.com Acknowledgement This study has been carried out between July 2005 and June 2007 by order of the European Association for Coal and Lignite , EURACOAL. Significant financial contributions have been provided by: • DEBRIV, Deutscher Braunkohlen-Industrie-Verein e. V. (German Lignite Industries Association) • RWE Power AG, Essen, DE • Vattenfall Europe Mining & Generation, Cottbus, DE • E.ON Kraftwerke GmbH, Hannover, DE • Public Power Corporation, Athens, GR • Matra Erömü Részvénytársaság, Visonta, HU • Czech Confederation of the Coal and Oil Producers (ZSDNP), Praha, CZ • Czech Coal A.S., Praha, CZ • Polish Hard Coal Employer’s Association (ZPGWK), Katowice, PL • Confederation of Polish Lignite Industry, Bogatynia, PL Beside the above mentioned, following organisations have been kindly supporting this work by their expertise and data basis: • Siemens Power Generation, Erlangen, DE • GVSt Gesamtverband des deutschen Steinkohlenbergbaus, (Association of German Hard Coal Producers), Essen, DE • VDKI Verein Deutscher Kohlenimporteure e.V. (Association of German Coal Importers), Hamburg, DE Country specific input has been given by following subcontractors: • NAPE, National Conservation Energy Agency, Warsawa, PL • Prof. Dr. Jan Keppler, Université Dauphine, Paris, FR At Prognos the study was accompanied, discussed and assisted by Dr. Claudia Funke, Frank Peter, Vincent Rits, Chanthira Srikandam, Philip Sowada and Deborah Sill. We gratefully acknowledge the valuable contributions, assistance and support that has been provided by the above mentioned. Basel and Berlin, June 2007 page 3 Contents 0 Executive Summary ............................................................................................................... 8 1 Target & Structure................................................................................................................ 14 1.1 Target........................................................................................................................... 14 1.2 Structure....................................................................................................................... 14 1.3 Focus ........................................................................................................................... 15 2 Coal in Europe: Overview.................................................................................................... 17 2.1 Coal Consumption ....................................................................................................... 17 2.1.1 Primary Energy Consumption: The Role of Coal ......................................... 17 2.1.2 Coal Production ............................................................................................ 19 2.1.3 Resources and Reserves ............................................................................. 21 2.1.4 Coal Imports ................................................................................................. 23 2.1.5 Coal Prices ................................................................................................... 26 2.2 The Role of Coal in Power Generation ........................................................................ 29 2.2.1 Final Demand of Electricity........................................................................... 29 2.2.2 European Power Markets............................................................................. 30 2.2.3 Capacities ..................................................................................................... 32 2.2.4 Outlook on Future Capacities....................................................................... 34 3 FRC Scenario Framework ................................................................................................... 37 3.1 Scenario Overview....................................................................................................... 37 3.2 Fuel Prices ................................................................................................................... 38 3.3 Policy............................................................................................................................ 40 3.3.1 General Situation.......................................................................................... 41 3.3.2 Nuclear Energy Policy .................................................................................. 42 3.3.3 Renewable Energy Policy............................................................................. 45 3.3.4 The Role of CHP .......................................................................................... 49 3.4 Climate Protection Policy ............................................................................................. 49 3.5 Carbon Prices .............................................................................................................. 53 4 FRC Technology Platform ................................................................................................... 56 4.1 Power Plant Technologies ........................................................................................... 56 4.1.1 Natural Gas Combined Cycle (NGCC)......................................................... 56 4.1.2 Nuclear Power Plants ................................................................................... 57 4.1.3 Pulverised Coal-Fired Steam Cycle (PC) ..................................................... 58 4.1.4 Integrated Coal Gasification Combined Cycle (IGCC) ................................. 61 4.1.5 Fluidised Bed Combustion (FBC)................................................................. 61 4.1.6 Pressurized Pulverized Coal Combustion (PPCC)....................................... 62 4.1.7 Externally Fired Combined Cycle (EFCC).................................................... 63 4.2 Carbon Capture Technologies ..................................................................................... 63 4.2.1 Pre-Combustion Capture.............................................................................. 64 4.2.2 Post-Combustion Capture ............................................................................ 65 4.2.3 Oxyfuel Combustion ..................................................................................... 66 4.2.4 Cost Assumptions for CCS Technologies .................................................... 67 4.2.5 Transport and Storage of CO 2...................................................................... 68 5 FRC Scenario Results.......................................................................................................... 69 5.1 FRC Power Generation................................................................................................ 69 5.1.1 Power Generation at high fuel prices ........................................................... 70 5.1.2 Power Generation at Moderate Fuel Prices ................................................. 73 5.2 Power Plant Capacities................................................................................................ 74 page 4 5.3 The introduction of CCS Technology........................................................................... 77 5.3.1 CCS as Technology Option .......................................................................... 77 5.3.2 Economic Logic of CCS................................................................................ 78 5.3.3 Strategic Introduction of CCS....................................................................... 80 5.4 Carbon Emissions........................................................................................................ 84 5.4.1 Carbon Emissions at High Gas Prices ......................................................... 85 5.4.2 Carbon Emissions at Moderate Gas Prices ................................................. 86 5.4.3 Carbon Emissions in Overview..................................................................... 88 5.5 Cost of Power Generation............................................................................................ 91 6 Appendix A: FRC Model Concept....................................................................................... 94 6.1 FRC Model Logics........................................................................................................ 94 6.1.1 Power Plant Parc.........................................................................................