Flexible CHP – the key to achieving Europe’s Green Deal and combating climate change

As the EU sets the stage for a decarbonised society by 2050, wind and solar energy will need a boost from highly flexible gas power plants to ensure a continuous supply when availability is limited, but demand is high.

Text: Maria Stambler Photo: Wärtsilä

The EU is hoping to achieve a decarbonised society by 2050 and to achieve this goal, the bloc has set a target of cutting greenhouse gases (GHGs) by at least 50-55% by 2030 compared to 1990, have at least 32% of total energy consumption from renewable energy, reduce primary energy usage by 26%, and increase energy efficiency by at least 32.5%. By 2050, the EU aims to become climate neutral. 

The initiative is welcome news, but is it possible for the EU to realistically accelerate its CO2 reduction efforts to meet the targets for both 2030 and 2050? 

“We are moving towards a system in which intermittent renewable power sources (wind and solar) are meant to play a dominant role. This brings obvious benefits, but also challenges since fossil fuels like coal and gas, despite their obvious downsides, offer the advantage of being comparatively easy to store and dispatch,” says Paul Voss, Managing Director at Euroheat & Power, a Brussels-based international organisation connecting district energy providers.

One of the possible options for meeting the goal is the decarbonisation of heat through flexible combined heat and power (CHP). 

“One of the cornerstones for decarbonising Europe is to decarbonise heat,” says Jan Andersson, Senior Market Development Analyst at Wärtsilä Energy. “On average in the EU today, 50% of energy consumption is in the form of heat (industrial heat included), 25% as electricity and the last 25% in transportation. Therefore, it is vital that heating is decarbonised for us to be able to reach our emission reduction targets. Flexible CHP will be at the forefront providing a balancing power to the electrical system and heating to cities.” 

An important step to a renewable future

There is a clear and growing need for investments in energy flexibility, such as gas engine-based power plants and energy storage. While renewable energy sources like wind and solar energy should be utilised as much as possible in order to reduce overall CO2 emissions, with the steady increase of variable renewable energy (VRE) the grid will increasingly demand flexibility to balance supply and demand. Andersson explains that flexibility in the system allows more renewable energy to be utilised through shifting excess energy and bringing flexible engine capacity online if there is not enough renewable energy available.

According to Andersson, flexible CHP can provide heat for district heating networks as well as balancing services for the electrical grid.

CHP plants will initially use natural gas during the transition period to carbon-neutral synthetic fuels.

“Gas is vitally important to a whole range of sectors (power generation, heating, industry and even transport) today and it’s probably not realistic to expect that it can be entirely phased out by 2050. That said, if Europe is to achieve its stated ambition of becoming the world’s first climate-neutral continent by 2050, today’s fossil gas will need to be replaced by a decarbonised equivalent,” Voss explains. 

Tord Johnsson, General Manager of Strategy & Growth Projects at Wärtsilä Energy, sees gas power plants not as a “fossil-fuel technology” but as a technology that can operate with renewable gases like bio-methane or hydrogen-based synthetic fuels. “Renewable gas-ready” new plants should be supported, while existing gas plants and infrastructure should be retrofitted for the use of renewable gas. Voss cautions against putting this precious resource into low-grade energy applications like residential heating due to the complexity and high costs involved. It would, therefore, be more appropriate to channel it towards hard-to-decarbonise pockets of the economy like heavy industry, heavy transport (e.g. trucks and ships) and flexible power generation.

Flexible gas plants, such as those using Wärtsilä engines, will initially run on natural gas, but can switch to decarbonised fuels when these sources become available. This has the potential to assure that investments made today will not become stranded assets in the future.

“By adding heat recovery equipment to engines, wasted heat can be captured and utilised in the cities’ district heating systems, thereby increasing the efficiency of plants to above 90%,” Andersson says, describing how flexible CHP is the key to achieving energy efficiency. Since heat demand and electricity demand seldom match, heat storage should be installed to decouple heat and electricity, so that when a plant is running excess heat, it can be stored for later use. This setup retains the flexibility of the plant while fuel is utilised as efficiently as possible.

A solution that is sustainable and affordable

Wärtsilä has incorporated flexible CHP into its vision for a 100% renewable energy future and has begun supporting Europe in building an optimal path to reaching the set targets.

“In 2018, Wärtsilä delivered two 50MW gas engine power plants to Centrica in the UK, providing flexible capacity to stabilise the grid and provide back-up power if renewable generation decreases. They can start up in under two minutes, each generating enough electricity to supply 50,000 homes. However, most of the time they will be stopped, generating no emissions,” Johnsson explains. 

The European Investment Bank (EIB) is also playing its part to support CHP. With the unveiling of Europe’s Green Deal, the EIB published its updated lending policy that outlines which projects are eligible for EIB funding. This updated policy excludes all fossil fuel projects except CHP plants running on natural gas as long as they reach an emission limit of 250 gCO2/kWhe. Andersson believes that this is a tough limit, but reachable with the existing state-of-the-art CHP plants today. This policy sends a very important signal to the market and industries that the EIB has recognised CHP as a vital part of the path towards decarbonisation.

Countries like Finland and Germany are already taking steps towards decarbonisation. Finland, a country with a strong forest industry and generally good wind conditions, is pushing for renewable energy together with biofuel-based plants and boilers to provide heating and electricity, Andersson says. Nuclear energy will be part of the mix, but wind power has reached grid parity without subsidies, thus making it more appealing than nuclear, which is significantly more expensive.

“Germany, on the other hand, is closing down its remaining nuclear reactors latest by the end of 2022 and has during 2019 committed to phase-out coal by 2038,” Andersson says. “Germany, which has been the frontrunner in renewable energy, has already a huge amount of wind and solar installed, and more are coming online. The big challenge for Germany will be to replace nuclear and coal at the same pace as the decommissioning is happening. To solve this equation, flexible CHP will play a key role along with energy storage.”

Achieving the targets of the Green Deal requires a future-oriented energy system based on a very high share of wind and solar energy. A number of parallel actions are needed for a swift and smooth transition. 

“Highly flexible gas power plants are indispensable in a renewables-dominated energy system to ensure a continuous supply when energy demand is high but renewable sources are not available,” concludes Johnsson.

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