1. NEEDS Forum 2 - Energy Supply Security – Kraków 5-6 July 2007 1 Perspectives of clean coal technologies in Poland Wojciech Suwala AGH-University of Science and Technology Faculty of Fuels and Energy

2. NEEDS Forum 2 - Energy Supply Security – Kraków 5-6 July 2007 2 Presentation plan Basic facts on Polish energy system Model of power generation Power generation technologies 2002-2020 Decomposition of CO 2 emissions reduction Conclusions

3. NEEDS Forum 2 - Energy Supply Security – Kraków 5-6 July 2007 3 Basic facts on Polish energy system 70% of TPES from coal 94% of electricity and heat generated form hard coal and lignite

4. NEEDS Forum 2 - Energy Supply Security – Kraków 5-6 July 2007 4 Basic facts on Polish energy system - challenges LCP directive - derogations EU accession treaty – country limits ETS –280 Mt CO2 required –208 Mt CO2 assigned Renewables obligation

5. NEEDS Forum 2 - Energy Supply Security – Kraków 5-6 July 2007 5 Model of power generation - 1 Bottom-up model Emissions constraints (SO 2, NOx, PM) Carbon tax to mitigate CO 2 emissions 100 coal grades Variable demands

6. NEEDS Forum 2 - Energy Supply Security – Kraków 5-6 July 2007 6 Model of power generation -2 Partial equilibrium Objective function: consumers + producers surplus  MAX Time horizon: 2002-2020 Linear programming GAMS/CPLEX

7. NEEDS Forum 2 - Energy Supply Security – Kraków 5-6 July 2007 7 Model of power generation scenarios 1 SO 2, NOx, PM emissions reduction as in EU Accession Treaty for the whole country (bubble)

8. NEEDS Forum 2 - Energy Supply Security – Kraków 5-6 July 2007 8 Model of power generation scenarios 2 Renewables obligation: 9% of electricity production from 2010 CO 2 - carbon tax: 0 - 30 €/t

9. NEEDS Forum 2 - Energy Supply Security – Kraków 5-6 July 2007 9 Results technologies mix, carbon tax 0 €/t CO 2

10. NEEDS Forum 2 - Energy Supply Security – Kraków 5-6 July 2007 10 Results technologies mix, carbon tax 25 €/t CO 2

11. NEEDS Forum 2 - Energy Supply Security – Kraków 5-6 July 2007 11 Results technologies mix, 2020

12. NEEDS Forum 2 - Energy Supply Security – Kraków 5-6 July 2007 12 Results technologies mix, 2020

13. NEEDS Forum 2 - Energy Supply Security – Kraków 5-6 July 2007 13 Technologies in 2020, carbon tax 25 €/t CO 2

14. NEEDS Forum 2 - Energy Supply Security – Kraków 5-6 July 2007 14 Technologies in 2020, carbon tax 25 €/t CO 2 Existing hard coal CHP public plants - life extension 47%

15. NEEDS Forum 2 - Energy Supply Security – Kraków 5-6 July 2007 15 Technologies in 2020, carbon tax 25 €/t CO 2 New nuclear 15%

16. NEEDS Forum 2 - Energy Supply Security – Kraków 5-6 July 2007 16 Technologies in 2020, carbon tax 25 €/t CO 2 3% 5% 8% 9% 7%

17. NEEDS Forum 2 - Energy Supply Security – Kraków 5-6 July 2007 17 Results CO 2 emissions for carbon tax 0 – 30 €/t CO 2

18. NEEDS Forum 2 - Energy Supply Security – Kraków 5-6 July 2007 18 Decomposition principle Shapley/Sun method X1 X2 ΔX1 ΔX2 X1 0 X2 0 Z=X1*X2 Δ Z(X1)= ΔX1*X2 0 +1/2* ΔX1* ΔX2 Δ Z(X2)= ΔX2*X1 0 +1/2* ΔX1* ΔX2

19. NEEDS Forum 2 - Energy Supply Security – Kraków 5-6 July 2007 19 Decomposition identity

20. NEEDS Forum 2 - Energy Supply Security – Kraków 5-6 July 2007 20 Decomposition identity process factor – related to: physical / chemical properties of the technologies fuel quality adjustment

21. NEEDS Forum 2 - Energy Supply Security – Kraków 5-6 July 2007 21 Decomposition identity fuel factor – related to emissions properties of fuels used

22. NEEDS Forum 2 - Energy Supply Security – Kraków 5-6 July 2007 22 Decomposition identity efficiency factor – related to amount of primary energy used to satisfy demand

23. NEEDS Forum 2 - Energy Supply Security – Kraków 5-6 July 2007 23 Decomposition identity demand factor

24. NEEDS Forum 2 - Energy Supply Security – Kraków 5-6 July 2007 24 Emissions decomposition effect = Δ factor

25. NEEDS Forum 2 - Energy Supply Security – Kraków 5-6 July 2007 25 CO 2 emissions reduction – effects contribution carbon tax 10 €/t CO 2

26. NEEDS Forum 2 - Energy Supply Security – Kraków 5-6 July 2007 26 CO 2 emissions reduction – effects contribution carbon tax 25 €/t CO 2

27. NEEDS Forum 2 - Energy Supply Security – Kraków 5-6 July 2007 27 CO 2 emissions reduction – effects contribution carbon tax 30 €/t CO 2

28. NEEDS Forum 2 - Energy Supply Security – Kraków 5-6 July 2007 28 Conclusions 1/2 Coal technologies should have still a large share in energy supply for Poland Traditional coal technologies need to be replaced by clean coal technologies Increase of demand could be balanced by renewable and nuclear energy

29. NEEDS Forum 2 - Energy Supply Security – Kraków 5-6 July 2007 29 Conclusions 2/2 Major factors which in longer term contribute to CO 2 emissions reduction are fuels switch and efficiency increase, the latter enhances the role of clean coal technologies Demand decreases contribute to emissions reduction basically in short term

30. NEEDS Forum 2 - Energy Supply Security – Kraków 5-6 July 2007 30 Thank you for your attention

31. NEEDS Forum 2 - Energy Supply Security – Kraków 5-6 July 2007 31 Reversed demand curve QRQ PR P PR – Reference price equal for all years QR – Reference demand - forecasts

32. NEEDS Forum 2 - Energy Supply Security – Kraków 5-6 July 2007 32 Unit cost of energy €/PJ