The role of natural gas in energy transition Prof.dr.sc. Neven Duić Power Engineering and Energy Management Chair Department of Energy, Power Engineering and Environment Faculty of Mechanical Engineering and Naval Architecture University of Zagreb, Croatia 26th FORUM: Energy Day in Croatia, Zagreb

LCOE – various technologies

Power sector developments Global installed generation capacity net change, 2016 [GW] Source: Source: Bloomberg New Energy Finance, http://fs-unep-centre.org/sites/default/files/publications/globaltrendsinrenewableenergyinvestment2017.pdf

Wind share in electricity demand 2015/16 Denmark – 42% Ireland16 – 27% Curaçao, Portugal16 – 25% Uruguay16 – 23% C. Verde, Cy.16, Spain – 20% Nicaragua – 19% Aruba, Germany16 – 16% Costa Rica, Romania – 13% Sweden, UK16 – 12% Lithuania16 – 11% Austria16, EU16 – 10% Estonia, India16, Netherlands16 – 9% Brazil16, Greece16, Poland16, Turkey16 – 7% Austria, Belgium16, Canada16, Italy16, Morocco, US16 – 6% Australia16, Croatia, Honduras, N. Zealand – 5% Bulgaria16, China16, Finland16, France16, Mex.16, Tunis., World – 4% Chile16, Jamaica14 – 3% Dominican R, Hungary, Latvia, Lux., Macedonia, Norway16 – 2% Czechia, Egypt, Japan, Ukraine – 1% hard easy

Solar share in electricity demand 2016 PV revolution Solar share in electricity demand 2016 Honduras – 10% Italy – 9% Germany, Greece – 7% Cyprus, EU, Belgium, Bulgaria – 4% Australia, Czech Rep., Japan, Romania, Spain, UK – 3% World, Denmark, France, Slovakia, Slovenia – 2% Austria, China, Malta, Netherlands, Pakistan, Portugal, US – 1% Croatia, Hungary, India, Lux. – 0.5%

Wind and solar: Coal vs. gas?

Electricity generation by fuel EU28

How to increase penetration of renewables in energy system? More grid capacity Cycling of thermal power plants Power exchanges Demand response and integration of power, heating, cooling, transport and water systems – smart energy systems Energy storage

Cycling of thermal power plants

Electricity production in Germany in week 18 2016

Consequences of market liberalisation: Markets and RES Consequences of market liberalisation: Demission of base load The importance of balancing power (gas, hydro) Cycling of old coal power plants (4000 hours by 2020) Market arbitrage and demand response (power-to-heat, power-to-water, e-mobility, power-to-efuels)

Power to heat

Electromobility Demand management Only personal cars and short distance light utility vehicles, 774000 PHEV and BEV sold in 2016 (http://www.ev-volumes.com/country/total-world-plug-in-vehicle-volumes/) If RESe 80% reduction of primary energy Fast charging 70 kW – huge problem if left uncontrolled, ex AT, 4 mln cars arrives home, plugs in – 280 GW (14 GW installed cap) Smart charging – market based, smoothing the demand

viable CEEP not viable

Fuel switch? UK vs NL coal vs CCGT switching boundaries https://www.timera-energy.com/gas-vs-coal-switching-in-europe-key-markets/

EU ETS CO2 pricing will go nowhere before 2025 Fuel switch EU ETS CO2 pricing will go nowhere before 2025 CO2 tax coming in non-coal countries, but hard to do in DE, PL Gas should go under 3 USD/MMBTU (9 EUR/MWh) Is that possible? Better say what has to be done to make it happen

How to reduce the gas price? LNG LNG LNG?

How to reduce the gas price? SEE gas hub? Market coupling? More exploration?

Any other market for gas? Heating goes electric or district heating, so gas has transitional future only through cogeneration

Any other market for gas? Heating goes electric or district heating, so gas has transitional future only through cogeneration Combined cycle 100 fuel 45 units excess heat + 55 units electricity -> HPCOP=6 2DHC = 330 units heat 430 units heat * losses … Gas heating 100 fuel -> 100 units heat * losses

Any other market for gas? Transport (of personal cars and light duty vehicles) goes electric Planes go biofuels Ships go LNG? Heavy duty vehicles? Maybe …

Wind and solar are coming, but difficult to integrate Conclusions Wind and solar are coming, but difficult to integrate Demission of base load. Natural gas and hydro critical for transition. Gas transition mainly in cogeneration Gas price has to go down … or carbon up Integration of power, heating, cooling, water and transport system necessary Smart energy systems – cheap and simple Great time for engineers!

THANK YOU FOR YOUR ATTENTION! Neven.Duic@fsb.hr www.het.hr