Following a position paper previously submitted by the ESCOROM Association and as a result of public reactions, comments delivered by means of energynomics.ro included, but above all, in addition to the position paper on the draft of the Romanian Energy Strategy (SER) issued by RWEA, the representatives of ESCOROM came up with a number of clarifications.
Like RWEA, ESCOROM considers that the current proposed strategy and investment directions are not the most appropriate and do not ensure the long-term competitiveness for the Romanian energy sector, the Romanian economy and the Romanian consumer of energy, be it electricity or thermal, safely and environmentally friendly (with minimum GHG emissions). ESCOROM underlines that the focus of the EU’s energy policy is to reduce CO2 emissions, which makes the Primary Energy Factor (PEF) the main indicator to be pursued, up to and beyond 2030, to reduce the primary energy consumption needed for covering final energy consumption. “At present, the established levels are 1.483 Mtoe of primary energy, at 1,086 Mtoe of final energy consumed,” ESCOROM said.
The current energy strategy does not foresee such indicators and targets to follow until 2030-2040 or, at least, they have not been sufficiently explained to justify investments and / or other proposed measures, including in the heating sector, in order to help achieving these indicators. Finally, the PEF is the measure of increasing the energy efficiency of the energy sector (therefore the “Energy Efficiency First” idea was included in the Energy Efficiency Directive 27).
According to ESCOROM, among the various national and European targets that were advanced (among which: security, efficiency, decarbonisation, interconnectivity, etc.), the central objective is given by the 40% GHG reduction target. This is the answer to the dilemma: to meet the target of 40% reduction in CO2 emissions, while not reaching the 32% share for renewable energy target OR to meet the 32% renewable share target, but not to meet the 40 % of CO2 emissions. In ESCOROM’s view, there is yet another dilemma – “more renewable energy (wind, solar) VS energy efficiency” – that has the same answer: the decarbonisation target of the energy system comes first.
In this context, ESCOROM appreciates that RWEA’s position paper “contains many valuable methodological core elements that can contribute to the competitiveness objectives of the Romanian energy sector”. However, these have to be put in the right context. First of all, renewable energy (wind or solar) is a tool among others to achieve the decarbonisation target, and not an objective in itself, as it seems to be understood in the RWEA position paper. Instead, energy efficiency can be an objective in itself.
According to ESCOROM, Romania’s energy strategy must refer to two priorities, in the following order:
- Priority # 1: Lignite to gas conversion (partial or total), which fundamentally is a typical energy efficiency project
- Priority # 2: Renewable, especially wind, must come to complement
The arguments of the Association in favor of the above hierarchy are summarized in a simplified example (the figures are rounded so that the message is easily understood by anyone). “We start from a 300 MW lignite group, which has a 30% efficiency and emission factor of 1 tCO2 / MWh. The strategic issue is what solution we should take to reduce emissions to less than 0.5 tCO2 / MWh along with the EU emission standards for participation in capacity mechanisms.” ESCOROM identified two options:
- Building a wind power plant capable of producing 300 MW with an emission factor of 0 tCO2 / MWh (a 300 MW net plant at a capacity factor of about 33% should have an installed capacity of about 1000 MW and would cost over one billion euros). The lignite group + the wind power plant together will produce 600 MW with an emission factor of 0.5 tCO2 / MWh.
- Converting the lignite-gas conversion (partial or total) by which, by installing 1 or 2 TG + boiler(s) on the same steam turbine, the unit’s efficiency will increase from 30% to over 50%, the power will increase from 300 to 900 MW, and the project would cost less than 400 million euros. The resulting emission factor will be below 0.4 tCO2 / MWh.
The example clearly gives the answer to the previous questions, ESCOROM experts say, adding that a PEF calculation confirms this fact. “The LCOE (Levelized Cost of Energy) analysis confirms the above, even under the conditions of a market price for natural gas and of a projected CO2 cost of 30-35 or 40 € / tCO2.”
One of the reasons why the lignite-gas conversion is economic under Romania’s conditions is the high cost of capital and sovereign risk; in such a context, the low-cost investments are favored. Also, conversion has, by far, the biggest impact on the drastic reduction of CO2 emissions; in other words, we save far more CO2 in this way than we can by installing relatively yet expensive, renewable capacities. The cost per tCO2 saved is lower in this scenario. Gas-wind symbiosis confirms what is recommended and economical in all strategic energy and environmental analyzes.
More renewables
The RWEA position paper suggests an increase in the share of wind energy, a position that the ESCROM Association supports, albeit with a different motivation than that advocated by RWEA. “Apparently, the arguments presented by us above could lead to the conclusion that lignite-gas conversion projects will replace the renewable (especially wind) option. We believe that this approach is not correct and we have the following arguments. Wind power is, unfortunately, only viewed as a producer of electricity, and therefore, also in the Energy Strategy, wind energy is treated as such. The same energy strategy almost ignores the heat market and, above all, the huge potential for decarbonisation of the heating sector (district heating included). What we consider to be perfectly technically and economically feasible, under Romania’s conditions, is that wind energy also addresses the heat market, not just power generation. This approach is in line with the binding target of 32% renewable energy in total final energy consumption for 2030, recently approved by the EC. We underline that total final consumption also means heating, not just power. This approach is possible due to technological developments, including the storage of intermittent renewable energy in high temperature thermal energy storage systems and the conversion of this energy through cogeneration back into the electrical system and the thermal system.”
LCOES (Levelized Cost of Energy Stored) is already around 20 euros/MWh, ESCOROM says, and 100-500 MWh capacity per day can be stored. This means that for the stored energy, delivery will cost by about 20 euros more than the energy introduced. So the wind can also be regarded as “fuel”, not necessarily just as “electricity generator”.
The conclusion of ESCOROM experts is that only the “decarbonisation” of the thermal energy market (especially for the replacement of coal-fired power plants), the potential of wind power plants is at least 4,000-5,000 MWe, out of which the energy for the balancing market could be associated with the heat market through storage.