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How to become a leading country in flexible energy production systems

Antti J. Lagus | 31.12.2014

​The Neo-Carbon Energy research project explores the inner workings of a new energy system.

The EU has set strict goals for carbon dioxide emissions reductions. What these goals mean in practice is that energy systems must be completely emissions-free by 2050. In order to have any hope of attaining these goals, changes must be well under way by 2030. The traditional solution is a two-path model, one path being nuclear power and the other being the continued use of fossil fuels with carbon capture and storage (CCS).

VTT partners with the Lappeenranta University of Technology (LUT) and the Finland Futures Research Centre at the University of Turku in the Tekes-funded Neo-Carbon Energy research project, which is exploring the functional principles of the energy system of the future. Solar and wind energy are expected to play a major role – if not in Finland, then in most of the rest of the world.

– The cost of solar energy is decreasing, and solar energy can now be deployed on a large scale, but only with a suitable energy storage system. The cost of solar energy is now half of what it was in 2008. Germany pioneered large-scale production, but this is now starting in other countries too. In Finland, the cost of producing solar energy is now EUR 120 per MWh, and estimates show that by 2030 the cost will be halved again, says the project coordinator, Principal Scientist Pasi Vainikka from VTT and Adjunct Professor at LUT.

When the cost reaches EUR 60 per MWh, solar energy will be cheaper than many of the technologies used for electricity generation today. Finland gets about 900 hours of full sunlight per year. In sunnier parts of the world, the figure is two or three times higher. To put it another way, in the Mediterranean solar energy will only cost EUR 30 per MWh by 2030. Vainikka notes that at such a cost level solar energy would provide the cheapest electricity available.

Vainikka asks whether Finland should not take this trend seriously and what will happen if we do. That is what the Neo-Carbon Energy project is all about. Production capacity tends to shift to the cheapest production method, and this may generate a self-sustaining trend.


Expertise in storage systems

There must be extensive capacity for energy storage and a delivery system for transport as well industrial use. Basic industry, however, requires a steady energy supply such as can be provided by old, reliable energy sources – coal, natural gas and nuclear power. Solar and wind energy involve a significant intermittency problem that must be resolved. 

In technology terms, this project is about developing an infrastructure for energy storage. Vainikka points out that even if Finland never becomes a world leader in the manufacture of wind turbines or solar panels, Finland would do well with even a small slice of the ecosystem that will arise around storage systems and their control.

– Energy may be stored in the form of hydrocarbons generated when carbon dioxide from various sources and hydrogen produced with electricity are made to react with each other. Finland is already building a network of storage facilities for liquefied natural gas, and there is a gas pipeline linking us to central Europe. Methane is thus one of the most attractive options, says Vainikka.


Storage capacity can be modelled

The project also involves considerable investment in the dynamic modelling of the energy system. Professor for Solar Economy Christian Breyer from the LUT is working with VTT scientists to create an hour-by-hour model of how much solar and wind energy production on the one hand and other energy production on the other there is around the world at any given time, how these can balance each other and when storage and transmission are required.

When the model is modified to include industry as well as transport, it indicates how much of various functions are required and what the new energy system will look like.

According to Vainikka, the technological solutions for implementing hydrocarbon storage facilities already exist. The costs of energy ­storage are expected to drop by 50% by 2020. 


Piloting creates markets

– Essentially, it all boils down to the pricing of the storage technology. Investors must be able to recoup their capital outlay. We need to launch pilots to learn more about the technology and to create markets, says Vainikka.

Vainikka compares today’s energy storage development efforts to the creation of frequency converters in the 1970s: they were originally developed for the Helsinki metro. The world’s first GSM mobile phone network was also a humble effort, delivered by Nokia to Radiolinja in Finland in 1991. Vainikka notes that it is now important to launch the first pilot projects in energy storage.

The steering group of the project has representatives from more than a dozen industry leaders in Finland. VTT is in charge of the project, which has an overall budget of EUR 14.2 million. About half of this is covered by VTT, about EUR 6 million by the Lappeenranta University of Technology and about EUR 1 million by the Finland Futures Research Centre at the University of Turku. 


Outlining the power plant of the future

In addition to futures research, the project includes component modules such as the study and modelling of energy system structure, business chains, technical process modelling and experiments to demonstrate what the power plant of the future might look like. 

– The power plant of the future will not just generate energy: it will also be able to retrieve power from the grid, store it and feed it back in when required. In the Neo-Carbon Energy system, energy production would work pretty much in closed circulation, leveraging carbon dioxide emissions, Vainikka outlines the project vision. 

Carbon dioxide can be used not only to generate­ power but also to manufacture products such as synthetic materials.

Finland’s pulp mills could convert their carbon dioxide emissions into hydrocarbons with renewable electrical power. The fuel thus obtained, such as methane, would be amply sufficient for powering Finland’s entire transport system, which has an annual energy consumption of about 55 TWh. The current vehicle stock could be converted to use gas as fuel with a relatively simple installation kit, which would mean that they would then be indirectly running on renewable electricity. Finland could also export methane to central Europe.


Lots of room on the energy storage market​

Jouni Keronen, Executive Director of the Climate Leadership Council, says that in order to balance the effects of climate, we need demand flexibility or energy storage. Energy storage is currently the bottleneck on the energy market, and it is this problem that the Neo-Carbon Energy project is addressing. 

The Climate Leadership Council is an association established by the Finnish Innovation Fund Sitra and several Finnish enterprises this year. Its purpose is to challenge Finland to take more rapid action to combat climate change.

– We need smart power grids to implement flexibility. We need to have facilities to enable the rapid storage and retrieval of energy, and smart power grids will help with this too, says Keronen.

The Neo-Carbon Energy project is creating opportunities for Finnish enterprises, from small service providers to major players in the energy sector. Keronen believes that there is a huge need for future solutions and that the number of participating enterprises will multiply.

– The energy storage market is as yet undeveloped, and there is lots of room there for businesses to stake a claim, says Keronen.​


Working closely with academia

Professor Christian Breyer from the Lappeenranta University of Technology notes that the Neo-Carbon Energy project covers the entire value chain, exploring not only future energy systems and energy production but also the end-user perspective. The period under study extends to the middle of the century, as any energy system introduced will remain in use for decades.

– Our university is working closely with VTT in the component modules of the project. We are looking for energy solutions consistent with sustainable development, taking into account cost-effectiveness, diversity of energy sources and the increasing of energy security. This is a project important for Finland, especially if Finnish enterprises can commercialise the technology that we are researching, says Breyer.

The project is looking at energy storage in the form of methane. Breyer says that methane is also an interesting option as a transport fuel. Being a renewable energy source, it is more sustainable than petrol, a fossil fuel. Also, although battery technology is improving, batteries will remain an impractical power source for shipping or long-distance transports.​


 

 

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