Six Sources of Energy

One Energy System

Vattenfalls Energy Portfolio
and the European Energy System
A book by Vattenfall AB
Design: Pontn & Engwall
Illustrations: Svenska Grafikbyrn
Photos: Anders Holmberg Gorgen, Tomas Bergman, Vattenfall AB, Johnr, Istock and Scanpix.
Print: Alloffset, Stockholm, February 2011
 INTRODUCTION

Foreword
Access to energy is essential to society. However, expectations and perspectives
concerning the function and design of the energy system change over time and vary
among different groups of people. For some people, achieving the lowest possible
economic costs is the top priority. For others, stability of the energy supply is a more
important factor. Still others believe that the environment and climate are the most
important elements to take into account when designing the energy system. Society
as a whole must balance these three perspectives.

For companies such as Vattenfall that are active in the energy industry, this involves
ongoing co-operation with society to create the most effective balance possible. In The goal of this book is to
addition, it requires acting as a driving force in the development of new technological
increase awareness of the fact
solutions that reduce the need for compromise between the perspectives. Today, no
single energy source can deliver on all counts competitiveness, security of supply,
that all types of energy sources
and climate and environment. are needed in our
energy system, and that the
Vattenfall works primarily within six sources of energy: biomass, coal power, nuclear balance between competitive-
power, natural gas, hydro power and wind power. These six sources of energy account
ness, security of supply, and
for 94 per cent of global electricity production.
the environment and climate
This book presents each one of these energy sources information and data on the must always be taken into
relative advantages and disadvantages, the history behind each energy source, a account. This book also provides
description of how each source works and its significance to the energy system. The information on Vattenfalls
book also provides a glimpse into future developments, such as what wind power
operations and our view of the
may be like, how emissions from coal power can be reduced, and how the biomass
area is rapidly developing. different energy sources.

In our role as a Swedish, European energy company, all energy sources matter in our
work to achieve our vision to create a strong and diversified European energy port-
folio with sustainable and increased profits and significant growth options, and to be
among the leaders in developing environmentally sustainable energy production.

The goal of this book is to increase awareness of the fact that all types of energy
sources are needed in our energy system, and that the balance between competi-
tiveness, security of supply, and the environment and climate must always be taken
into account. This book also provides information on Vattenfalls operations and our
view of the different energy sources.

I hope you will find this book interesting. Please visit our homepage for further infor-
mation: www.vattenfall.com.

ystein Lseth

President and CEO Vattenfall

LOREM IPSUM 2011| |33

INTRODUCTION
Introduction
The Energy Triangle.......................................................................... 7
Competitiveness............................................................................. 8
Security of supply ........................................................................... 8
Climate and environment ........................................................ 10
Balancing the three dimensions .......................................... 11
The European Energy System .................................................. 12
The energy system from energy
source to end-users ................................................................... 13
Electricity an energy carrier on the rise ....................... 13
A common energy policy for Europe .................................. 15
New trends on the European energy market ................ 15
Emissions trading a way to reduce
CO2 emissions ................................................................................. 15
Vattenfalls Energy Portfolio .................................................... 16
Vattenfalls strategic direction ............................................. 16
Vattenfall Group ............................................................................ 18
Strategy to reduce CO2 exposure ....................................... 18
Improving end-use efficiency and reducing
environmental impact ................................................................ 19
Six energy sources in Vattenfalls energy mix ............. 20
Glossary .............................................................................................. 98
Vattenfall AB (publ)
SE-162 87 Stockholm, Sweden
Visitors: Sturegatan 10
Telephone: +46 8 739 50 00
For more information, please visit www.vattenfall.com
4 | SIX SOURCES OF ENERGY
Biomass
The Energy Triangle Biomass ............................................................ 24
The Development of Biomass Power Generation ....................... 25
An old energy source with new applications ............................. 25
Definition of biomass and bioenergy.............................................. 25
Biomass Becomes Electricity and Heat ........................................... 26
Co-firing biomass with coal ................................................................. 26
Different biofuels in power generation ......................................... 26
Biomass in Europe ....................................................................................... 28
An energy source with growth potential...................................... 28
Biomass Opportunities and Challenges ...................................... 29
Large land areas required..................................................................... 29
Managing sustainable biomass......................................................... 29
A continuing carbon cycle makes biomass
carbon neutral ............................................................................................. 29
Biodiversity an important issue ......................................................... 29
Political support varies........................................................................... 29
The Future of Biomass .............................................................................. 30
Untapped potential but increased imports
still needed .................................................................................................... 30
Uncertainty about future investments ......................................... 30
Cost competitiveness dependent on
the price of CO2 emissions ................................................................... 30
A developing market ................................................................................ 30
Biomass technology under constant development .............. 31
National conditions decisive ............................................................... 31
Vattenfall and Biomass ............................................................................ 32
Vattenfalls biomass operations ....................................................... 32
Sourcing sustainable biomass rubber trees from Liberia ..... 32
Vattenfalls biomass operations going forward....................... 32
Toward a sustainable biomass production ................................. 33
Summary .......................................................................................................... 33
Coal Power
The Energy Triangle Coal Power ...................................................... 36
The History of Coal ..................................................................................... 37
An energy source with long history................................................. 37
Coal in many forms .................................................................................... 37
How a Coal-fired Power Plant Works ................................................ 38
Coal becomes electricity ...................................................................... 38
Coal extraction how it works .......................................................... 38
Coal technology under constant development ....................... 39
Coal Power in Europe................................................................................. 40
The Future of Coal Power ........................................................................ 41
Carbon Capture and Storage
underground storage of CO2 .............................................................. 41
CCS technology separation, transport and storage ........ 42
CCS technology going forward......................................................... 43
Co-firing of biomass a way to reduce emissions...................... 43
Vattenfall and Coal Power ...................................................................... 44
Vattenfalls coal power operations ................................................. 44
Vattenfalls coal power operations going forward ................. 44
Strategy to reduce CO2 exposure .................................................... 44
Vattenfalls investments in CCS ....................................................... 45
Summary .......................................................................................................... 45

Hydro Power
The Energy Triangle Hydro Power ................................................... 48
The History of Hydro Power.................................................................... 49
Sweden an example of the significance
of hydro power ............................................................................................. 49
Global and local considerations conflict...................................... 50
How a Hydro Power Plant Works ......................................................... 51
Hydro powers significance as balancing power ..................... 52
Long useful life and low operating costs ...................................... 52
Environmental consideration and fish conservation ............ 52
Hydro Power in Europe.............................................................................. 53
Hydro power in European countries ............................................... 53
Safety and environmental considerations.................................. 53
New technology brings more hydro power to Europe........... 53
The Future of Hydro Power ..................................................................... 54
Great potential for small-scale hydro power ............................. 54
Pumping power increases system reliability ............................. 55
Ocean waves are an untapped resource ..................................... 55
Tidal energy a blend of old and new technology .................. 55
Osmotic power an innovative idea with
great potential ............................................................................................. 55
New technologies on the way but the traditional
ones remain important ........................................................................... 55
Vattenfall and Hydro Power ................................................................... 56
Vattenfalls hydro power operations .............................................. 56
Vattenfalls hydro power operations going forward.............. 57
Summary .......................................................................................................... 57
Natural Gas
The Energy Triangle Natural Gas ..................................................... 60
The History of Natural Gas ..................................................................... 61
Natural gas a fossil energy source .............................................. 61
Extraction and deposits in the world.............................................. 62
Europes natural gas network............................................................. 62
European gas market reform .............................................................. 62
The Natural Gas Value Chain ................................................................. 63
Application fields of natural gas ....................................................... 63
Natural gas extraction how it works ........................................... 63
Transport and distribution of natural gas .................................... 64
Natural gas becomes electricity and heat .................................. 64
Natural Gas in Europe ............................................................................... 65
Continued import dependence in Europe ................................... 65
The Future of Natural Gas ....................................................................... 66
A fossil gas with future potential ...................................................... 66
Natural gas technology under constant
development................................................................................................. 66
Large variations in price ........................................................................ 66
The development of public opinion and policy .......................... 67
Vattenfall and Natural Gas ..................................................................... 68
Vattenfalls natural gas operations................................................. 68
Vattenfalls natural gas operations going forward ................ 68
Toward a climate neutral energy supply ....................................... 69
Summary .......................................................................................................... 69
INTRODUCTION
Nuclear Power
The Energy Triangle Nuclear Power ............................................... 72
The History of Nuclear Power................................................................ 73
Massive nuclear expansion in the 1960s and 1970s............. 73
Nuclear accidents impacted public opinion ............................... 73
Comprehensive safety developments .......................................... 74
How a Nuclear Power Plant Works ..................................................... 75
Splitting an atomic nucleus.................................................................. 75
From uranium mine to nuclear fuel................................................... 75
Waste management from reactor to terminal storage .... 75
Nuclear Power in Europe.......................................................................... 77
Nuclear power a crucial part of EUs
electricity generation ............................................................................. 77
Major differences between European countries .................... 77
Nuclear power on the rise ..................................................................... 77
Constructing a Nuclear Power Plant ................................................. 78
The financial conditions of nuclear power .................................. 78
Planning site selection ........................................................................ 78
Availability of nuclear power plant designs ................................ 78
Storage of spent nuclear fuel ............................................................. 79
The Future of Nuclear Power ................................................................. 80
A new generation of nuclear power ................................................ 80
Development of generation IV reactors ....................................... 80
Fusion energy an energy source of the future? .................... 81
Vattenfall and Nuclear Power ............................................................... 82
Vattenfalls nuclear power operations .......................................... 82
Vattenfalls nuclear power operations going forward ......... 83
Summary .......................................................................................................... 83
Wind Power
The Energy Triangle Wind Power ..................................................... 86
The History of Wind Power ..................................................................... 87
How Wind Power Works........................................................................... 88
Wind turbines today ................................................................................. 88
Wind farms .................................................................................................... 89
Wind power and electricity generation ........................................ 89
Good wind position is a projects first step ................................. 89
Wind Speed ................................................................................................... 90
Offshore construction presents special challenges ............ 90
Wind Power in Europe ............................................................................... 91
Strong growth ............................................................................................. 91
Support systems promote expansion
of European wind power .................................................................................. 92
Germany and Spain lead the pack.................................................... 92
Extensive authorisation process in European countries.... 93
The Future of Wind Power ....................................................................... 94
Increasingly large wind farms in the future ................................. 94
New demands on future electricity system smart grids.. 95
EU continues to invest in wind power ............................................. 95
Vattenfall and Wind Power ..................................................................... 96
Vattenfalls wind power operations ................................................ 96
Vattenfalls wind power operations going forward................ 96
Smart grids an important tool for increasing the
share of wind power in the energy mix ........................................... 97
Summary .......................................................................................................... 97
ONE ENERGY SYSTEM |5
INTRODUCTION
This chapter introduces the Energy Triangle, a model used to illustrate the balance
between three key dimensions in societys need for energy competitiveness,
security of supply and environment and climate. The chapter also includes an intro-
duction to the European energy system and an overview of Vattenfalls energy
portfolio.

6 | LOREM
SIX SOURCES OF ENERGY
IPSUM 2011
 INTRODUCTION

The Energy Triangle

In supplying society with its energy needs, a balance must be struck between three key dimensions: competi-
tiveness, security of supply, and the environment and climate. In other words: How much are we ready to pay
for our energy? How much energy does society need? And what impact on the environment are we willing to
accept? This energy triangle illustrates the pros and cons of each energy source and the need for a mix of
complementary energy sources in power production. Currently, no single energy source is optimal from all
dimensions; each has advantages and disadvantages.

The Energy Triangle

Climate and environment

All energy sources have environmental impact during their life
cycles. Combustion of energy sources, particularly fossil fuels, gen-
erates CO2 emissions and contributes to global warming. In the long
run, emissions from power production will need to be close to zero if
greenhouse gas levels in the atmosphere are to be stabilised.

Security of supply Competitiveness

Fuel shortages and unreliable electricity systems cause societal
and economic problems. Securing supply means guaranteeing
that primary energy is available, and that delivered energy is
reliable, essentially 100 per cent of the time. This is both a political
and a technical challenge.
Energy is a fundamental input to economic activity, and thus
to human welfare and progress. The costs of producing energy
vary between different energy sources and technologies.
A competitive energy mix will keep overall costs as low as
possible given the available resources.

ONE ENERGY SYSTEM |7

INTRODUCTION
Competitiveness
Energy is a fundamental input to economic activity, and there-
fore to human welfare and progress. Historically, decreasing
costs of energy have helped to stimulate economic growth, and
today many industries must manage their energy costs in order
to compete in the global marketplace. Energy costs can be kept
low by improving the efficiency of energy end-use, or by lower-
ing the costs of power generation.
The costs to produce energy carriers such as electricity, heat
and fuels vary between different energy sources and technolo-
gies. Broadly speaking, power production costs are comprised
of capital costs and operating costs. Capital costs include
financing power plant construction, and operating costs
include fuel inputs and power plant maintenance.
Societies generally seek out an energy mix that will keep the
overall costs of delivered energy as low and stable as possi-
ble for households and businesses. Managing capital costs is
usually a question of scale and time: power plants that deliver
large volumes of energy over many decades can spread out
the costs of capital investments. Managing operating costs is
usually done through securing cheap and reliable fuels and
maintaining technically efficient systems.
A competitive energy mix will keep overall costs as low as
possible given the available resources. Large hydro plants,
for example, require huge capital investments but produce a
great deal of electricity over a long period of time, and there-
fore have a low overall cost. Typically, countries that have rivers
in mountainous regions have therefore elected to build hydro
8 | SIX SOURCES OF ENERGY
power. Coal and nuclear plants can also be built at large-scale
and have long life spans, and coal and uranium have traditionally
been relatively inexpensive. Gas-fired power plants have faced
higher fuel costs but can be built economically at a smaller
scale, thus decreasing capital costs. Wind farms are expensive
to construct and have shorter life spans, but have no associated
fuel costs.
Historically, electricity costs have been kept at their lowest by
building capital-intensive energy infrastructure that lasts many
decades. In time, flexible and distributed technologies may make
other options more cost-competitive. But keeping energy costs
manageable will continue to be a priority for most societies.
Security of supply
Energys role in the economy is such that access to energy
needs to be secure. Shortages of fuels and unreliable electri-
city systems have tended to cause problems for societies and
economies. Fuel for transportation, fuel for heating, and electri-
city for lighting and critical infrastructure must be available
at all times to deliver the standard of living expected in many
countries. Securing supply therefore means guaranteeing that
primary energy is available, and that delivered energy is reliable,
essentially 100 per cent of the time. This is a major political and
technical challenge.
Security of supply in a countrys energy system is closely linked
to energy self-sufficiency. For countries that are dependent on
importing large amounts of primary energy, relationships with
their energy-exporting counterparts are key to maintaining a
Historically, electricity costs
have been kept at their lowest by
building capital-intensive energy
infrastructure that lasts many
decades. In time, flexible and
distributed technologies may
make other options more cost-
competitive. But keeping energy
costs manageable will continue
to be a priority for most societies.
 INTRODUCTION

Energy dependency (2008)

%
100

80

60

40

20

0
n Denmark -37% (net exporter) n Spain 81%
n France 51% n Sweden 37%
20 n Germany 61% n UK 21%
n Netherlands 38% n Finland 55%
n Poland 20%
40

Energy dependency is defined as the net amount of energy imported, divided

by gross energy consumption.
Source: Eurostat, Energy Yearly Statistics 2010

stable level of energy availability. In these cases, foreign and

national security policies are closely intertwined with energy
policy. Since there is a risk that geopolitical factors may cause a
disruption in primary energy supply, most countries endeavour
to use domestic energy sources to the greatest extent possible.
The graph above provides an overview of the energy dependency
of a sample of European countries, showing the share of total
energy consumption that is imported from other countries.
In terms of electricity generation, security of supply entails
using secure sources of primary energy in power plants and
delivering the electricity reliably, when and where it is needed.
Options for storing electricity are currently limited, which means
that a balance must be continuously struck between generation
and consumption. Identical amounts of electricity are produced
and consumed within the system at any given time, creating a
need for delivery assurance in electricity generation.
To meet the portion of societys electricity demand that is
stable over time, we need power plants that can continuous-
ly produce large quantities of electricity (baseload power).
Large-scale nuclear, fossil-based, and hydro power stations
can provide this kind of power.
Most renewable energy sources, such as wind and solar
power, are intermittent. They can only provide electricity under
the right conditions, and are therefore not able to function
as baseload power. Solar cells and wind turbines, for example,
produce energy when the sun shines or the wind blows.

ONE ENERGY SYSTEM |9

INTRODUCTION

To handle increases and decreases at times of peak demand
and to adjust to the varying amounts of generation from
intermittent sources, we need access to energy sources that
can be quickly converted to produce more or less electricity
(balancing power). Hydro power can be used in this way, since
flows from dams can be increased or decreased in a very short
amount of time and can thus regulate electricity generation and
adjust to electricity requirements at any given time. Gas-fired
plants can also be ramped up and down relatively quickly to
meet variations in demand.
Current research is also studying ways to develop electri-
city grids into smart grids. By equipping grids with more exten-
sive storage capacities and technologies to adjust electricity
consumption to fluctuations in generation, grids can be made
more reliable and dependence on baseload power and balancing
power can be reduced. This will improve the security of supply
for the electricity system as a whole.
Climate and environment
All energy sources have environmental impact during their life
cycles. This impact can perhaps best be assessed by conduc-
ting a life cycle analysis of a sources total environmental impact,
in terms of construction of the power plant as well as extraction,
distribution, conversion and waste management.1
Climate change associated with greenhouse gas emissions
has come to be seen as the greatest environmental challenge
facing humanity. Todays energy system is a large contributer
to overall emissions of greenhouse gases. In order to stabilise
the carbon dioxide content in the atmosphere at a sustainable
long-term level, CO2 emissions from energy must be significantly
reduced.
Reducing the proportion of fossil fuel and increasing the
proportion of renewable energy sources (e.g., wind and solar
power) and nuclear power in the energy mix is an important way
to curb global warming. Natural gas, which emits less than coal

Carbon dioxide in the atmosphere (1959-2009)

PPM
400

390

380

370

360

350

340

330

320

310

300
1959 1961 1963 1965 1967 1969 1971 1973 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009

PPM Parts Per Million is often used to measure the concentration of CO2 in the atmosphere
Source: Trends in Atmospheric Carbon Dioxide, NOAA 2010

10 | SIX SOURCES OF ENERGY


or oil, can play a role as a bridging technology. To reduce the
climate impact of power plants, old plants can be replaced with
new, more efficient ones. In the long term, fossil power plants
can be equipped with technology that prevents the release of
CO2 into the atmosphere (CCS, Carbon Capture and Storage,
technology).
In the long run, emissions from power generation will need to
be close to zero if we are to stabilise greenhouse gas levels. Given
the long life span of most energy infrastructure, achieving this
requires long-term planning on the part of the business community
and policy makers.
Balancing the three dimensions
Achieving cost-competitiveness, securing supply and minimising
the energy systems impact on the environment and climate
requires some trade-offs. These trade-offs are not identical for
each energy source, and energy technology characteristics
INTRODUCTION
change over time. Nonetheless, improving one dimension of the
energy system often entails making sacrifices along another
dimension. For instance, sourcing cost-competitive energy may
increase a countrys dependence on unstable energy imports,
and using fossil fuels to improve security of supply will have a
negative climate impact. And managing environmental impact
frequently entails increased costs. Win-win-win solutions
do exist, particularly in terms of improved energy efficiency.
Technological developments and improved electricity network
design will deliver even more. Today, however, balancing the
three points of the triangle requires a mix of complementary
energy sources. Finding the balance between these three
dimensions is ultimately a societal and political decision.
ONE ENERGY SYSTEM | 11
INTRODUCTION

The European Energy System

Access to energy plays a key role in economic development and
welfare throughout the world. Since the 1800s, technological
breakthroughs such as electricity and the internal combustion
engine have altered and improved the way we use energy, laying
the foundation for todays society, industries and transportation.
The modern energy system is central to much of what we take for
granted today and electricity is a prerequisite for life as we know it.
Hospitals need electricity to function; we need electricity for food
production and food storage, to communicate with each other
via mobile phones and computers, to heat our homes and to get
clean drinking water from our taps. Electricity is also needed
for industrial and household processes and is often much more
efficient than fossil-based processes, making it a better option
from an environmental perspective.
The energy supplys central role in society has placed energy
issues high on political agendas throughout the world. Issues
regarding types of energy to use, power plant location and
energy import/export are largely controlled through political
decisions, which include national security considerations. Energy
policy is also closely linked to climate policy and efforts to
reduce greenhouse gas emissions. Energy consumption in
its various forms (e.g., transportation, heating and electricity
consumption) accounts for approximately two-thirds of global
greenhouse gas emissions and is thus an important factor in
efforts to stem global warming.2
The worlds energy demands have grown dramatically in
recent decades. Total global energy consumption has nearly
tripled since 1965.3 In 2008, the EU accounted for 14 per cent
of the total global energy demand and is therefore an important
player in the global energy system.4
Although per capita energy consumption has not increased
to the same extent, and although energy systems have become
more efficient, the Earths population (and thus total energy
demand) continues to grow. There is a clear correlation between
economic development and energy consumption; when pro-
duction increases rapidly, there is a surge in energy demand.
But the correlation between growth and energy consumption
becomes weaker as countries become more affluent.
The energy mix in the European Unions electricity generation
is dominated by fossil energy sources. Oil, coal and natural gas
account for 54 per cent of EU electricity generation. Coal and
nuclear are the two largest energy sources, each constituting

Global energy consumption (1965-2009)

MTOE

12,000 Asia & Pacific

Africa

Middle East
10,000
Central & South America

North America
8,000
Europe & Eurasia

6,000

4,000

2,000

0
1965 1967 1969 1971 1973 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009

MTOE Million Tonnes of Oil Equivalent is a unit of energy commonly used for comparisons
of energy content between different energy sources Source: BP Statistical Review of World Energy, 2010

12 | SIX SOURCES OF ENERGY


28 per cent of electricity generation. Hydro power constitutes
11 per cent, biomass and waste three per cent and wind power
four per cent. On a global level, fossil fuels play an even more
important role, constituting about two-thirds of total electricity
generation.5
The energy system from energy source to end-users
A modern energy system can be viewed as a value chain that
starts with the energy source (e.g., wind, water, oil) and concludes
with end-use. In order for us to utilise the energy stored in energy
sources, they must be converted into energy carriers. An energy
carrier is a material or process that is used to store and/or trans-
port energy. The most common energy carriers are electricity
and oil.6
After the conversion process, energy carriers are transported
through a distribution system to the end-user. Power networks
and electric cables are used to transport electricity, while distri-
bution systems for fuel include the use of tankers and lorries.
Energy end-use is normally divided into three sectors: industry,
transport and housing. Since a large amount of the energy
supplied to power plants cannot be utilised and is lost during
The electricity system
INTRODUCTION
energy conversion and distribution, final consumption in the
energy system is considerably lower than the amount of energy
supplied from the energy sources at the beginning of the value
chain. Of the total amount of energy supplied, less than half is
utilised in the end-use process. In order to lower the amount of
energy lost during conversion and distribution, energy research
is largely focused on making these processes more efficient.
Electricity an energy carrier on the rise
Electricity is an energy carrier that is efficient in transporting
energy over long distances. It also has an extremely wide range
of applications as compared to motor fuel, for example, which is
used solely to run vehicles. The share of electricity in final energy
consumption in EU countries increased from 16 per cent in 1990
to over 20 per cent in 2008.7
The electricity system links electricity-producing power plants
with electricity-consuming end-users via a power network. Power
plants produce electricity by converting energy from different
energy sources, while end-users consume electricity by doing
things like running industrial machinery or turning the lights on at
home.
The electricity system links electricity-producing power
stations with electricity-consuming end-users via a power
network.
ONE ENERGY SYSTEM | 13
INTRODUCTION

The composition of different energy sources in the electricity

system is usually referred to as the energy mix. European coun-
tries differ significantly in terms of the energy mix used in elec-
tricity generation. Geographical and geological conditions,
combined with political decisions and public opinion, form the
basis of energy mix composition in each country. For instance,
Swedens geographical conditions (many rivers and great dif-
ferences in altitudes) mean that the country can use a large
amount of hydro power in its energy system. Similarly, large coal
reserves in Poland mean that coal power dominates Polands
electricity generation, while large-scale hydro power is not part
of their energy system. Geothermal energy is dependent on
geological conditions and plays a significant role in some parts
of the world (e.g., Iceland). The use of solar power is progressing
rapidly (albeit from low base levels), especially in hot and sunny
regions.
Apart from geographical and geological conditions, public
opinion is quite significant in determining the composition of
a countrys energy mix. This is particularly evident in terms of
nuclear power. In France, for instance, there has historically been
broad acceptance of nuclear power, and this has contributed
to nuclears current position as the predominant energy source
in Frances energy mix. Conversely, in Denmark there has been
strong, long-standing opposition to nuclear power; nuclear is
therefore not part of the Danish energy supply. In other countries,

The EU energy mix in electricity generation (2008)

4%
10%

28%

3% 28%

24% 3%

Wind 4% Natural Gas 24% According to British researchers, the Internet consumes three to
Hydro 10% Oil 3%
five per cent of annual global electricity supply, or between 600 and
1,000 TWh. In comparison, Indias total annual electricity genera-
Nuclear 28% Coal 28%
tion is around 830 TWh.
Biomass & waste 3% Source: IEA, World Energy Outlook 2010

14 | SIX SOURCES OF ENERGY

 INTRODUCTION

such as Sweden, public opinion on nuclear power has become more positive. In the EMISSIONS TRADING A WAY
summer of 2010 the Swedish Parlament passed a bill lifting the ban on new reactors. TO REDUCE CO2 EMISSIONS
The EUs Emissions Trading Scheme was
A common energy policy for Europe launched in January 2005, the worlds first
A number of EU processes and decisions in recent years have resulted in the develop- large-scale trading system for greenhouse
ment of a common European energy policy. Due to the need for a coherent strategy gas emissions. Under the scheme, each
to meet the challenges facing the European energy system, the EU has an increas- member state sets a cap on the total allow-
ing amount of influence on member states national energy policies. able amount of carbon dioxide emissions. To
The common energy policy focuses on securing long-term energy supply, halting ensure that the cap is not exceeded, emis-
climate change and building the foundation of a competitive energy sector. This is sion rights are distributed to industries and
accomplished in part by harmonising the European electricity markets, as electricity energy companies that cause emissions. If a
trading between countries is currently complicated by varying technical standards company produces CO2 emissions below the
and power network designs. Security of supply is particularly important considering mandatory cap, it can save its emission rights
for the next period or may sell the surplus
the fact that the EU currently imports over half of its energy needs.
to other companies that need to emit more.
In the area of climate change, a 20-20-20 goal has been established. This goal
The system rewards companies that reduce
forms the basis of the EUs climate efforts through the year 2020. The goal is to
their emissions by allowing them to sell their
increase the proportion of renewable energy sources used in the energy mix to 20
remaining emission rights, while companies
per cent, reduce CO2 emissions by 20 per cent from 1990 levels, and make energy that need to emit more are penalised by being
consumption 20 per cent more efficient.8 forced to purchase more emission rights.

New trends on the European energy market

Demand on the European energy market fell sharply in 2009 due to the financial The next trading period under the trading
scheme starts in 2013 and will incorporate a
crisis and a slowdown in industrial production. The electricity consumption growth
number of changes. The aviation sector will
rate is expected to be weak in the future, and it
be included in the system and a common, EU-
will most likely take more than 10 years for
wide cap on the total allowable amount of
electricity consumption to reach 2008 levels.
CO2 emissions will be set. The long-term plan
The share of electricity in total Several factors contribute to weak long-term is to gradually increase in the proportion of
energy consumption is likely growth. Many energy-intensive manufacturing auctioned emission rights, with all emission
to increase given the fact that industries have relocated from Europe to Asia, rights sold via auction by the year 2030.
and the growing European service sector does
electricity in the long term
not require such large amounts of energy. The
is expected to replace, for EU goal of making energy consumption 20 per
example, petrol as the primary cent more efficient is also expected to have
fuel for cars. a negative impact on electricity demand.
Even so, the share of electricity in total energy
consumption is likely to increase given the fact
that electricity in the long term is expected to replace, for example, petrol as the
primary fuel for cars.
On the supply side, the trend is expected to move from the centralised produc-
tion of today to a larger share of renewable energy sources and decentralisation of
production. The EUs transition to auctioning emission rights as of 2013, as opposed
to allocating them free of charge, is expected to accelerate the trend. Higher costs
for emitting CO2 into the atmosphere will strengthen the competitiveness of energy
sources that emit relatively little CO2. But fossil energy sources will continue to play
an important role in many countries in terms of meeting energy needs and assuring
the energy supply.

ONE ENERGY SYSTEM | 15

INTRODUCTION

Vattenfalls Energy Portfolio

Vattenfalls energy mix reflects the energy mix in the countries
in which Vattenfall operates. Within this framework, Vatten-
fall continuously strives to improve its operations by making
them cleaner, safer and more efficient. Vattenfalls approach is
based on the inherent strengths and weaknesses found in each
particular form of energy and on existing political and societal
expectations.
Vattenfalls German operations are based on nuclear and
coal power since these energy sources feature prominently in
Germanys energy mix. Similarly, the Swedish operations are
based on hydro and nuclear power, sources that account for
89 per cent of Swedish electricity generation overall.9 The
Netherlands has large natural gas resources, and Vattenfalls
generation of electricity and heat in the Netherlands is more
than 40 per cent gas-based. In Great Britain, which has an ambi-
tious development scheme for offshore wind power, Vattenfall
is one of the major offshore wind operators. Polands energy
system is based almost entirely on coal, which is why Vattenfall
is active in Polish coal power.
Vattenfalls strategic direction
Vattenfalls vision is to create a strong and diversified Europe-
an energy portfolio with sustainable and increased profits and
significant growth options, and to be among the leaders in
developing environmentally sustainable energy production.
Vattenfall has grown substantially over the past decade,
going from around 13,000 employees in 2000 to roughly 38,000
in 2010. Following a period of expansion, Vattenfall is now

Electricity generation (2008)

Germany Sweden
Wind: 6% Wind 1%
Germany Sweden Hydro 46%
Hydro: 4%
Nuclear: 23% Nuclear 43%
Biomass & waste: 5% Biomass & waste 7%
Natural Gas: 14% Natural Gas 0%
Oil: 1% Oil 1%
Coal: 46% Coal 1%
Total: 637 TWh Total: 150 TWh

Vattenfall
Vattenfall
Vattenfalls electricity
Vattenfalls electricity
generation in Germany
generation in Sweden
Total: 69 TWh
Total: 80 TWh

Wind
The Hydro
The Netherlands
Wind 4% Netherlands
Nuclear
Hydro 0%
Nuclear 4% Biomass & waste
Biomass & waste 6%
Natural Gas
Natural Gas 59% Vattenfall
Oil 2%
Oil
Coal 25%
Total: 108 TWh Vattenfalls electricity
Coal
generation in the Netherlands
Total: 14 TWh
Source: IEA Statistics, Electricity generation 2010; Vattenfall Annual Report 2009

16 | SIX SOURCES OF ENERGY

 INTRODUCTION

entering a consolidation phase. Over the coming years Vatten-
fall will focus on its core markets (i.e., markets in which Vatten-
fall holds a strong position). Today, Vattenfalls core markets
are Germany, Sweden and the Netherlands. Vattenfall holds a
top-three position in these markets, which provides economies
of scale and allows Vattenfall to play a significant role in poli-
cy-related discussions at the national and EU levels. Vattenfall
also considers the United Kingdom to be an important growth
market, based chiefly on Vattenfalls strong position in offshore
wind power there.
Vattenfall will remain an integrated but generation-focused
utility with a diversified generation portfolio, and will increase
the share of low-emitting and renewable electricity generation
in its portfolio.
In coming years, organic growth within generation will be
focused towards wind, nuclear and gas-fired power plants,
and on hydro power if possible. Vattenfall will also invest in bio-
mass co-firing in existing hard coal-fired power plants, based
on the anticipated availability of future support. This will allow
Vattenfall to reduce its current high CO2 exposure, which will
entail major emitter costs in the future. Vattenfalls portfolio
emissions will be reduced more rapidly than the market average
towards the EUs 2020 targets.

Electricity generation (2008)

The World

EU
Vattenfall

Wind
The World EU Vattenfall
Hydro Wind 1% Wind 4% Wind 1%
Hydro 16% Hydro 10% Hydro 24%
Nuclear
Nuclear 13% Nuclear 28% Nuclear 28%
Biomass & waste Biomass & waste 1% Biomass & waste 3% Biomass & waste 1%
Natural Gas 21% Natural Gas 24% Natural Gas 3%
Natural Gas Oil 5% Oil 3% Oil 0%
Coal 41% Coal 28% Coal 43%
Oil Total: 20,183 TWh Total: 3,339 TWh Total: 162.1 TWh
Coal

Source: IEA World Energy Outlook 2010; Vattenfall Annual Report 2009

ONE ENERGY SYSTEM | 17

INTRODUCTION

VATTENFALL GROUP Strategy to reduce CO2 exposure

Vattenfall is one of Europes largest
electricity generators and its largest
heat producer. Consolidated
annualised sales as of September
2010 totalled SEK 223 billion.
Vattenfalls main products are
electricity, heat and gas. In the
areas of electricity and heat,
Vattenfall works in all parts of the
value chain: generation, distribu-
tion and sales. In the gas area,
Vattenfall is primarily active in
sales. Vattenfall is also engaged in
energy trading and lignite mining.
The Group has approximately
38,000 employees. The parent
company, Vattenfall AB, is wholly-
owned by the Swedish state. Core
markets are Sweden, Germany and
the Netherlands. In 2010 opera-
tions were also conducted in Bel-
gium, Denmark, Finland, Poland and
the UK.
Vattenfall intends to significantly reduce its CO2 exposure by 2020. Carbon dioxide
emissions represent a cost to Vattenfall. The EU Emissions Trading Scheme is push-
ing the market towards reduced CO2 emissions by levying a cost on CO2 released
into the atmosphere. Companies with high CO2 emissions are therefore subject to
large financial exposure. Vattenfall is a large emitter in Europe. In order to reduce its
high exposure to the price of CO2, Vattenfall intends to cut its CO2 exposure from 90
million tonnes in 2010 to 65 million tonnes by 2020.
Vattenfalls strategy for reducing its CO2 exposure has three main parts:
n Divestments. Not only driven by Vattenfalls intention to reduce its CO2 exposure,
but also focused on businesses where Vattenfall is not the most suitable owner.
Divestments are expected to reduce exposure by 12 to 14 million tonnes per
year.
n Replacement of hard coal with biomass to achieve a reduction of 8 to 10 million
tonnes. An extensive biomass programme is underway and has already produced
good results.
n Lower utilisation rates of older coal-fired plants, and replacement of non-com-
mercial plants with gas, biomass, or CCS when commercially viable. Anticipated
reduction of 12 to 14 million tonnes per year.
Completion of the new Moorburg and Boxberg power plants will cause a slight increase
in emissions during the next few years, after which emissions will be gradually reduced
through 2020. Phase two of the Nuon Magnum multi-fuel plant will also be pursued.

Key facts and figures Vattenfalls strategy for reducing CO2 exposure 2010-2020
n Net sales: SEK 223.4 billion i

Mtonnes
n Operating profit: SEK 39.3
billioni,ii 110
10 12-14
n Total assets as of 30 September 100
2010: SEK 528.7 billion 90
90 8-10
n Electricity generation: 169.8
TWh i 80 12-14
n Heat sales: 42.0 TWhi
70 65
n Gas sales: 55.7 TWhi
n Total number of employees as 60
of 30 September: 38,438iii
50
n Customers as of 31 December
2009: 7.5 million electricity 40
customers, 2.1 million natural
30
gas customers and 5.7 million
electricity network customers 20

10
i) Latest 12-month figure as of
30 September 2010
0
ii) Excluding items affecting
2010 Boxberg, Divest- Co-firing Replace- 2020
comparability
Moorburg ments of biomass ment of non-
iii) FTE (Full Time Equivalents) and coal commercial
plants

18 | SIX SOURCES OF ENERGY


Improving end-use efficiency and reducing
environmental impact
In order to improve the efficiency and reduce the environmental
impact of its operations, Vattenfall also conducts extensive
research and development (R&D) work. Two of Vattenfalls pro-
jects aimed at increasing energy efficiency are the E-mobility
and the Sustainable Cities programmes.
Vattenfalls R&D Sustainable Cities Programme focuses
on energy use, process efficiency and the role of electricity in
end-user systems. Vattenfall launched the Sustainable Cities
concept to help cities transition to sustainable energy use,
addressing their needs for efficient energy solutions in sustain-
able urban planning and other technological systems. This is
achieved by improving efficiency on all levels, as well as deploy-
ing renewable energy sources. Vattenfall aims to build long-
term partnerships with cities and to help them design tailor-
made sustainability plans.
The programme involves new technologies and new sys-
tem activities on the end-user side of energy systems, such as
district cooling, heat pumps, small-scale CHP (combined heat
and power) plants, and energy-efficiency improvements such
as low-energy lighting and the visualisation of energy usage
(Energy Management). It also includes identifying, developing
INTRODUCTION
and creating Vattenfall competencies and developing partner-
ships with universities and companies to exchange knowledge
and ideas.
Vattenfalls R&D E-mobility Programme aims to increase
the role of electricity in transports. Vattenfall has been work-
ing with various types of electric vehicles since the 1980s. For
example, Vattenfall and Volvo launched a joint venture in 2007
to series-produce plug-in hybrid vehicles and introduce them to
the market in 2012. The E-mobility Programme focus includes
the development of new charging technologies.
Running vehicles on electricity would reduce dependency on
oil. It would also reduce dependency on a single energy source,
since electricity can be produced by a mixture of sources (wind,
hydro, nuclear, coal, biomass, etc.). Using electricity in the trans-
port sector would shift local emissions from millions of exhaust
pipes to larger point sources where they can be controlled
more easily, creating new opportunities for clean and quiet city
environments. Depending on the energy source used, carbon
dioxide emissions can also be significantly reduced. Vattenfall
believes that electricity will play a significant role in the trans-
port sector of the future and that electricity-powered vehicles
will be part of a long-term sustainable society.
Vattenfall has been working with various types of electric vehicles
since the 1980s. Vattenfall believes that electricity will play a signi-
ficant role in the transport sector of the future and that electricity-
powered vehicles will be part of a long-term sustainable society.
ONE ENERGY SYSTEM | 19
INTRODUCTION

Six energy sources in Vattenfalls energy mix

Vattenfalls mix of six energy sources is one of the strongest and most diversified
portfolios in Europe, and provides significant growth options. Vattenfalls breadth
allows a high degree of flexibility and risk diversification. It also gives Vattenfall the
strength needed to explore new solutions, such as development of Carbon Capture
and Storage (CCS) technology.

BIOMASS PROVIDES GOOD POTENTIAL

TO REDUCE CO2 EMISSIONS
Biomass is a renewable energy source that has the potential to play a key role in
reducing CO2 emissions from existing coal power plants in Europe, and can be used
to produce both heat and electricity. Vattenfall has a long history of working with
biomass in producing heat, and plans to increase co-firing of biomass in coal power
plants to reduce fossil emissions of CO2. Vattenfall intends to allocate significant
resources and efforts to building a substantial, highly reliable and sustainable
biomass supply chain.
Biomass co-firing provides good potential for reducing CO2 exposure, but is
dependent on support systems for economic competitiveness. Vattenfall intends to
grow in the area of biomass.
n Biomass can help Vattenfall reduce fossil CO2 emissions
n Vattenfall intends to grow in the area of biomass
n The utilisation of biomass is dependent on support systems
Read more on page 32

COAL POWER IS THE CORNERSTONE OF THE

EUROPEAN ENERGY SYSTEM
Coal is a cornerstone of the European energy system due to its economic attractive-
ness and characteristics that allow stable and secure large-scale electricity genera-
tion. Vattenfall will optimise its existing production portfolio and make investments
to improve efficiency and reduce CO2 emissions in current plants. The Boxberg and
Moorburg projects will be completed and phase two of the Nuon Magnum multi-fuel
plant will be pursued, but no other coal-fired plants will be built until they can be built
with CCS. In general, coal will become a smaller part of Vattenfalls portfolio after
2015, through asset divestment, fuel replacement and switching away from non-
commercial plants after 2020. Vattenfall also plans to increase co-firing of biomass
in coal-fired plants.
Vattenfall has built a pilot plant for carbon dioxide capture at the lignite-fired
power plant at Schwarze Pumpe, Germany. The next step will be a full-scale demon-
stration plant at Jnschwalde in Germany. Through Nuon, Vattenfall is also building a
pilot plant at the Willem Alexander power plant in Buggenum, Netherlands.
n Vattenfall will optimise its existing coal portfolio
n The construction of Boxberg and Moorburg, and possibly Nuon Magnum,
will be finalised
n Increased co-firing with biomass and implementation of CCS technology will be
significant for Vattenfall
Read more on page 44

20 | SIX SOURCES OF ENERGY


HYDRO POWER IS INCREASINGLY
ATTRACTIVE
Hydro power is a renewable energy source that is economically
attractive, provides security of supply and has low levels of CO2
emissions. Vattenfall has century-long roots in hydro power
and continues to hold a leading position in Sweden. Vattenfall
retains its commitment to hydro power, and intends to grow
through acquisitions in Central and Western Europe when
possible.
Hydro power is increasingly attractive, particularly in light of
the fact that the French market is opening up to competition.
As one of Europes largest operators, Vattenfall has a clear
competitive advantage.
n Hydro power is a renewable energy source that can provide
large volumes of both baseload power and balancing power
n Vattenfall is one of the largest operators in Europe and has
a clear competitive advantage
n Vattenfall intends to grow within hydro when possible
Read more on page 56
NATURAL GAS IS A BRIDGING FUEL TO
A SUSTAINABLE ENERGY SYSTEM
Natural gas is a growing energy source in Europe that is eco-
nomically attractive and provides flexibility and security of sup-
ply. It also has lower specific CO2 emissions than other fossil
fuels. Natural gas is a new energy source for Vattenfall that
provides increased security of supply and gives Vattenfall a
more balanced portfolio that better reflects the European
energy mix.
Gas-fired power is a bridging fuel to a sustainable energy
system. It will become more competitive in relation to, for exam-
ple, coal-fired plants as CO2 prices rise. Vattenfall will maintain
its current portfolio and will continuously monitor the potential
for longer-term growth.
n Lower specific emissions than other fossil-fired plants and
becomes more competitive as CO2 prices rise
n The flexibility of natural gas works well with an increasing
share of wind power
n Vattenfall will maintain its current portfolio and will conti-
nuously monitor the potential for longer-term growth
Read more on page 68
Footnotes Introduction
1
More detailed information about Life-Cycle Assessments for Vattenfalls Swedish
electricity generation can be found on www.vattenfall.com
2
International Energy Association (IEA), World Energy Outlook 2009
3
BP Statistical Review of World Energy, 2010
4
IEA, World Energy Outlook 2010
INTRODUCTION
NUCLEAR POWER IS GAINING INCREASED
SUPPORT IN EUROPE
Nuclear power plays a vital role in many European countries due
to its economic attractiveness, security of supply and low CO2
emissions. Vattenfall has played a major role in constructing
Swedish nuclear power plants, and is an owner of nuclear power
in Germany. Vattenfall aims to maintain its current nuclear
positions in Sweden and Germany and to keep its options open
for future growth. Vattenfall is intensifying its efforts to achieve
impeccable safety and availability levels.
Nuclear power is gaining increased support in Europe.
Vattenfall, as a prominent operator, has a clear advantage.
n Nuclear power provides large volumes of electricity with
low CO2 emissions
n Vattenfall has a competitive advantage as one of the
prominent operators
n Vattenfall will keep its options for growth in the nuclear
power area open
Read more on page 82
WIND POWER HAS SIGNIFICANT GROWTH
OPPORTUNITIES
Wind power is the fastest growing energy source in Europe and
plays a key role in the achievement of the European Unions cli-
mate goals. Vattenfall is Swedens largest wind power opera-
tor and the largest operator of offshore wind power in Europe.
Vattenfall will continue to expand offshore wind in the North Sea
countries (the UK, Germany, the Netherlands) and onshore wind
in prioritised markets.
Vattenfall sees significant growth opportunities within wind
power, though profitability is dependent on support systems. In
terms of offshore wind, Vattenfall has a competitive advantage
and intends to grow further.
n Vattenfall has a competitive advantage in offshore wind
n Vattenfall sees significant growth opportunities within wind
power
n Currently dependent on support system
Read more on page 96
5
Ibid.
6
BP, op. cit.
7
IEA, 2010, op.cit.
8
Read more about the EUs climate goals on www.energy.eu
9
Swedish Energy Agency, Energy in Sweden: Facts and Figures, 2009
ONE ENERGY SYSTEM | 21
BIOMASS
Bioenergy is a form of stored solar energy, collected
by plants through photosynthesis. Biomass is an
organic material that contains bioenergy. Biomass
is a renewable energy source used to produce elec-
tricity, heat and fuel. Biomass and waste constitute
roughly three per cent of total electricity genera-
tion in the EU.

22 | SIX
SIX FORMS
SOURCES
OF OF ENERGY
ENERGY
ONE ENERGY SYSTEM | 23
BIOMASS

The Energy Triangle Biomass

Climate and environment

All energy sources have environmental impact during their life cycles. Combustion of
energy sources, particularly fossil fuels, generates CO2 emissions and contributes to
global warming. In the long run, emissions from power production will need to be close
to zero if greenhouse gas levels in the atmosphere are to be stabilised.

By using biomass in power production instead of fossil fuels, CO2 emissions can
be significantly reduced. Carbon dioxide is emitted into the atmosphere when
biomass is burned, but when biomass grows it binds carbon dioxide through pho-
tosynthesis. Properly managed biomass is therefore carbon neutral over time.

Security of supply Competitiveness

Fuel shortages and unreliable electricity systems cause
societal and economic problems. Securing supply means
guaranteeing that primary energy is available, and that
delivered energy is reliable, essentially 100 per cent of the
time. This is both a political and a technical challenge.
Energy is a fundamental input to economic activity, and
thus to human welfare and progress. The costs of produc-
ing energy vary between different energy sources and
technologies. A competitive energy mix will keep overall
costs as low as possible given the available resources.

Biomass can be converted into a stable and reliable
supply of electricity and heat. Biomass can be securely
sourced on small scales, but supply of larger volumes
is currently difficult to secure. One important step is
to establish a global trade and certification system.
Biomass resources are geographically diversified and
political risk is limited.
Using biomass to produce electricity is currently more
expensive than using energy sources such as coal,
gas or nuclear power. The global biomass supply chain
is developing and, over time, technological and logisti-
cal improvements will bring down prices. An increased
CO2 price will also improve the economic competitive-
ness of biomass.

24 | SIX SOURCES OF ENERGY

 BIOMASS

The Development of Biomass DEFINITION OF BIOMASS

AND BIOENERGY
Power Generation Biomass is used to produce electricity,
heat and fuel.

An old energy source with new applications Bioenergy is actually a form of stored
solar energy, collected by plants through
Biomass is a renewable energy source that has been used as fuel for tens of thou-
photosynthesis. Bioenergy is present in
sands of years. Wood and other plant parts have been used since the dawn of man to
living organisms in the form of carbon
prepare food and provide heat. Biomass is still the main type of fuel for the 1.4 billion
compounds. Bioenergy is also a generic
people across the globe that lack access to electricity, in the form of wood burned in
term for electricity and heat production
stoves, fires and other basic cooking devices. processes that use biofuels.
Development of the different areas of application for biomass has made great
Biomass is an organic material that
strides in recent decades, and there are now a variety of methods for converting
contains bioenergy. Biomass can be any-
biomass into heat and electricity; everything from pellets for household heating
thing from energy crops to agricultural or
to agricultural waste used to produce electricity in commercial power plants. forestry residues and waste. Common to
However, despite the development in recent these substances is an origin in photo-
decades, biomass for large-scale electricity synthesis and, as opposed to biofuels, the
generation still constitutes a minor portion of Interest in biomass within the lack of any chemical conversion process.
total global biomass consumption for energy
energy industry has increased Biofuel is a generic term for the fuel used
purposes. It is still a new technology, and its to extract bioenergy. Biofuel can be
potential is substantial.1
in recent years due to its
various types of biomass, such as wood
The share of biomass in the energy mix climatically advantageous or chips, or fuel extracted from biomass,
remains limited in many countries and is characteristics. such as ethanol produced from sugar
largely influenced by geographic and geolo- cane.
gical conditions. Biomass is used primarily in Among the fields of application for
countries with extensive forest industries, where residues such as branches, wood biomass, the focus here is on biomass
chips and sawdust can be used to produce both electricity and heat. Countries with used for electricity and heat production.
large agricultural industries and industries that produce waste products that can
be used as biofuels also have potential to increase their use of biomass.
Interest in biomass within the energy industry has increased in recent years due
to its climatically advantageous characteristics. Replacing fossil fuels with biomass
presents potential for reducing the amount of CO2 emitted by electricity and heat
production in Europe. In the long term, biomass is likely to play an important role in
the European energy mix.

ONE ENERGY SYSTEM | 25

BIOMASS
Biomass Becomes Electricity and Heat
At a biomass-fired power plant, biomass is converted to elec-
tricity and heat. The heating is done by burning biomass in a
boiler. The most common types of boilers are hot water boilers
and steam boilers. Wood chips, refuse and other types of
biomass are used in the boilers, in the same way that fossil fuels
such as coal, natural gas and oil are used.
Co-firing biomass with coal
Co-firing biomass with coal (i.e., replacing a portion of coal with
biomass) is an effective method of using biomass for energy
purposes. Most of Europes coal-fired plants could be adapted
to burn between 10 and 20 per cent biomass.2 Since many kinds
of biomass have a lower energy content than, for example, hard
coal, using a greater percentage of biomass in the fuel mix risks
impairing the plants efficiency.
Recent research calculates that if the full potential of bio-
mass is realised, the EUs power generation from biomass could
increase by 50 to 90 TWh per year. This corresponds to 1.5 to
2.5 per cent of the EUs total electricity generation. Using bio-
mass in the fuel mix of existing coal plants could in turn reduce
Biomass becomes electricity and heat
Flue gas
cleaning
Chimney
Turbine
Hot water Steam
boiler
Storage for
biomass
Water
Ash
26 | SIX SOURCES OF ENERGY
CO2 emissions by approximately 85 million tonnes per year,
equivalent to five to 10 per cent of the total reductions needed
to achieve the EU s 2020 climate goals.3
The amount of biomass that can be mixed with coal depends
in part on the type of biomass used. The availability of suitable
biofuels such as pellets, chips and agricultural residues also
limits the amount of biomass that can be used.
Different biofuels in power generation
The biofuels that are used today for heat and electricity genera-
tion are primarily derived from forest products, waste and other
residues from the agricultural and forest industries. Farmed
energy crops have thus far had a difficult time competing in
terms of price with other types of biomass, such as forest pro-
ducts and waste.
Forest products
Wood fuel from forests and plantations constitutes the majority
of todays biomass, equivalent to approximately 770 TWh
of primary energy per year in Europe.4 Roughly half is comprised
Generator
Fuel is stored in a bunker for further transport
to the boiler. In the boiler, water is heated to high
temperature under pressure. The steam tem-
perature can reach up to 550C. Steam from the
District boiler powers the turbine, which is connected to
heating the generator. Steam that has passed through
network the turbine heats district heating water, which is
distributed through the district heating networks
piping.

of residues from the forest industry, sawmills and pulp manufac-
turing that can be utilised for power generation during combus-
tion.
Pellets and briquettes are another type of biofuel. These
fuels are manufactured by compressing waste material, such as
sawdust, bark or higher-grade biomass. They are highly suitable
for export as they have the advantage of being easy to trans-
port. Pellets and briquettes are often used as fuel in households
with boilers and stoves. In much of the world today, waste pro-
ducts from industry and sawmills are left in the forest. Utilisa-
tion of these waste products could increase power generation
by 170 TWh by the year 2020.5
Energy crops
Energy crops are grown by farming and used for power genera-
tion. Today, energy crops are cultivated on roughly 50,000 hec-
tares in the EU and provide 3 TWh of primary energy for heating
and electricity.
Different types of biofuel are derived from energy crops.
Tropical countries primarily produce ethanol from sugar cane.
BIOMASS
Starchy crops such as sugar beets and potatoes are fermented
to produce ethanol or diesel. Energy crops can also be used with
other types of waste to produce biogas. Todays biogas plants
can process a variety of different types of waste generated by,
e.g., the agricultural industry and farming.
One of the advantages of energy crops is that they do not
require the use of chemicals to the extent that food crops do. In
Europe, most energy crops are produced locally and thus do not
have negative side effects, such as long transports.
Waste, by-products and residues
Residues include manure, sewage, sludge and other degra-
dable waste. Residues constitute the second largest source
of biomass today, after wood fuel, contributing approximately
210 TWh per year. Forecasts show that this amount can be
increased to 370 TWh by the year 2020. Liquid biomass waste,
such as manure, household waste and sewage plant residues,
can be digested to biogas.6
ONE ENERGY SYSTEM | 27
BIOMASS

Biomass in Europe
Renewable energy sources provided approximately 18 per cent Role of biomass in meeting Europes renewable energy
of the EUs electricity generation in 2008. Biomass and waste targets European Commission scenario
constituted approximately 18 per cent of this amount, or rough- EU-27 final energy consumption, TWh

ly three per cent of total electricity generation. In 2009, biomass

and wind power were the most important renewable energy n Biomass and waste 3,030
n Other renewable energy
sources for electricity generation in the EU, after hydro power.7 350 Hydro
The number of power plants in Europe that run solely on bio- 850
370 Wind
mass is expected to increase dramatically in coming years. In
addition, biomass is used along with coal in many coal-fired 280 Solar, geothermal,
tidal and wave
power plants throughout Europe. The most and the largest
380 Biofuels for
investments in biomass power to date have been made in coun- 850
transport
tries that are most able to use residues from the forest indus-
1,330
try, mainly Sweden and Finland. But countries such as Germany,
Hungary and Austria also have many biomass plants. 310

In Europe, biomass power investments are expected to 220

increase dramatically in coming years. Expansion will continue 1,650
Biomass
in Scandinavia, which already has a well-established use of bio- and waste
800
mass for electricity and heat production, though probably not
at the previous pace.
2007 Growth Growth 2020
An energy source with growth potential in energy in other scenario
from renewable
As a renewable energy source, biomass has potential to con-
biomass energy
tribute to reducing CO2 emissions within the European power
generation industry. Studies show that the most common types Source: McKinsey, Vattenfall, Sveaskog, Sdra, European Climate Foundation
(2010): Biomass for Heat and Power Opportunity and Economics
of biomass used for electricity and/or heat production can con-
tribute towards a reduction of CO2 emissions by 55 to 98 per
cent over fossil fuels.8 After wind power, biomass power is the fastest grow-
ing energy source in Europe. Over 100 TWh of electricity was
Share of biomass and waste in electricity generation (2008)
produced with biomass and waste in the EU in 2008, more
%
14 than ten times as much as in 1990. The European Commission
expects that biomass powers contribution to European electri-
12 city generation will double over the next ten years. Global use of
biomass is also expected to double by 2020.9
10 The EUs official scenario for renewable power generation
assumes that electricity and heat production from biomass will
8 be 850 TWh higher in 2020 than in 2007, signifying a twofold
increase over todays level of 800 TWh.10 However, nearly 70
6
per cent of the biomass utilised today is burned directly for heat
(e.g., in the industrial sector) and is neither sold nor distributed.
4
The expected growth of biomass is equivalent to the growth
of all other aggregate renewable energy sources within Europe.
2
The current rate of growth, 35 TWh per year, is only one-third of
that required to achieve the established 2020 goals. If growth
0
n Denmark 11% n Netherlands 6% n Sweden 7% proceeds at the current rate, total growth by 2020 will be 300
n France 1% n Poland 2% n UK 3% TWh, a significant number, albeit 550 TWh lower than the
n Germany 4% n Spain 1% n Finland 14%
Source: IEA Statistics, Electricity Generation, 2010
targets.11

28 | SIX SOURCES OF ENERGY


Biomass Opportunities and Challenges
Expanding the use of biomass may have both positive and nega-
tive consequences for the climate and the environment. Many
challenges remain in place.
Large land areas required
A study by the UN Food and Agriculture Organisation (FAO)
shows that there is technically enough land to double the area
of biomass plantations by the year 2020. But available land area
is not necessarily equatable with actual biomass availability.
A mobilisation of biomass supply on a global level is required if
demand by year 2020 is to be met.
Due to the fact that energy crops often attract higher subsi-
dies for the landowner, there is a risk that increased demand for
biomass will impact global food production and lead to increased
food prices. Biomass plantations also use large land areas and
may, if not properly managed, compete with other interests such
as forestry industry and biodiversity.
Projects are being initiated around the world aimed at ensur-
ing the availability of biomass for new and existing power plants.
Meanwhile, an entirely new commodity market is developing
where developing countries in particular see an opportunity to
find a market for their green gold. This trend could force down
food production and may endanger natural forests if clear trade
and certification systems are not established on both the local
and global level.
Managing sustainable biomass
If biomass is to contribute to the reduction of CO2 emissions in
the future, cultivation and production must be carried out in a
controlled, sustainable manner. There are still no international
criteria defining sustainable biomass. The goal is to establish a
functioning system that guarantees that biomass production
is carried out in an environmentally and climate neutral man-
ner, regardless of whether the product is domestic or imported.
Such a system must also take all involved parties into account,
from local residents of the producing country to the energy
companies that purchase biomass. Managing this balance has
become crucial for politicians and decision makers.
A continuing carbon cycle makes biomass carbon neutral
Carbon dioxide is emitted into the atmosphere when biomass
is burned, in the same way as when fossil fuels are burned. But
when biomass grows it binds carbon dioxide through photosyn-
thesis. The carbon dioxide released through biomass combus-
tion is captured by growing biomass. Properly managed bio-
mass is therefore carbon neutral over time. Biomass power may
BIOMASS
give rise to temporary carbon dioxide debts since it may take a
long time for slow-growing forests to re-capture the amount of
carbon dioxide released through combustion.
Biomass production methods and long transport distances
are other factors that impact carbon dioxide emissions. It is
therefore important to take the entire value chain into consi-
deration, from production to power plant to replanting. A future
challenge is to identify calculation methods to determine the
level of emissions created by power generation.
The generation of electricity with biomass produces flue
gases that must be cleaned before they are emitted into the
atmosphere. This is done by utilising well-developed techniques
such as flue gas washing and particulate filters.
Biodiversity an important issue
Large-scale cultivation of biomass can have an indirect impact
on biodiversity. Indirect land-use effects occur when biomass
production displaces certain activities to other areas leading to
unwanted negative impacts, such as deforestation. The carbon
impact of indirect land-use change is difficult to measure and
there is currently no consensus on how this should be done.
The extensive use of biomass in the form of logging residue
from the forestry industry may lead to land acidification, nutrient
depletion and reduced biodiversity. One method to counteract
nutrient depletion and land acidification is to return the ash
formed by the combustion of biofuels. The ash contains nutrients
such as potassium and phosphorous. The natural balance is
restored more rapidly if this ash is restored to the place where
the biomass was grown.
Biomass produced from waste or agricultural residues carries
the least environmental risks from production and does not affect
biodiversity.
Political support varies
As an energy source, biomass receives varying degrees of poli-
tical support among European countries. Meanwhile, the need
increases for clear criteria for sustainable development. There
are several advantages to having an increased share of biomass
in the energy system. In addition to environmental and climate
advantages and the opportunity to reduce dependency on
fossil fuels, an increased use of biomass is viewed as positive for
regional development. New jobs are created and farmers have
the option of diversifying their crops.
Discussions currently underway indicate the need for a clear
framework of binding sustainability criteria that take environ-
mental, social and economic aspects into consideration.
ONE ENERGY SYSTEM | 29
BIOMASS

The Future of Biomass

Untapped potential but increased imports still needed
There is potential across Europe to cultivate various energy
crops for electricity and heat production. However, forecasts
show that Europe will have to import biomass if it is to meet
the EUs 2020 goals. Even under the most optimistic forecasts,
the estimated total deficit of biomass corresponds to 150 to
750 TWh. Imports of biomass to Europe will consist primarily
of pellets, which are suitable for long-distance transports. The
achievement of 2020 goals will require 30 to 150 million tonnes
of pellets per year, or the output from 50 to 300 large-scale
pellet mills.12
Uncertainty about future investments
The cultivation of energy crops in Europe has remained at a sta-
ble level over the past five years and a limited number of major
investments are planned for the future. It is therefore unlike-
ly that the goals will be achieved, chiefly because there is no
demand at the price level required for profitable production due
to the uncertainty surrounding the future role of biomass in the
European energy system.
The lead time for this type of investment and conversion is
five to ten years, which means that immediate action is required
if the European biomass supply is to increase at a sufficiently
rapid pace.
Cost competitiveness dependent on the price of CO2
emissions
Another limiting factor, in addition to biomass availability, is
price. It is currently more expensive to produce electricity from
biomass than from fossil fuels such as coal. The price difference
is affected by various types of economic control instruments
such as emission rights for CO2. Increased CO2 prices would
therefore hasten the conversion of the energy system to the
benefit of biomass.
From a cost perspective, there is great potential for improve-
ment in moving from small-scale to large-scale biofuel pro-
duction. Increased volumes can produce economies of scale
throughout the value chain and cost efficiency measures can
boost the competitiveness of biomass relative to coal and gas.
A developing market
International trade in biomass for power generation is still limi-
ted, although it is expected to increase. This highlights the need
for establishing a standardised global system for trade and

Cost competitiveness of biomass over time

Average cost, EUR per MWh electricity

160

140 Offshore w
ind 2
120

100

Biomass archetypes
80

66
60 Onshore wind
1
Fossil alternatives
40

20

0
2007 2015 2020
CO2 price: 15 EUR/tonne CO2 price: 20-30 EUR/tonne CO2 price: 30-50 EUR/tonne

1
Hard coal condensing and natural gas CCGT. Assumes fixed fossil fuel prices over time, coal 75 US D per tonne Source: McKinsey, Vattenfall, Sveaskog, Sdra,
(54 EUR per tonne), natural gas 20 EUR per MWh. Coal plant efficiency 40%, gas CCGT 55%. European Climate Foundation (2010): Biomass
2
Not including grid connections for Heat and Power Opportunity and Economics

30 | SIX SOURCES OF ENERGY


certification. Biomass origin is crucial to the establishment of a
long-term, sustainable trade in biofuels. Extracted biomass, for
instance, must be replaced with new biomass (i.e., replanted) in
order to be classified as a renewable type of energy and a good
environmental alternative.
Future increases in biomass trade will most likely mean that
fuel is produced far from where it is consumed. Production chain
quality assurance will therefore be extremely important going
forward. A system similar to the forest industrys, for instance,
would limit many of the social and environmental risks asso-
ciated with large-scale biomass production.
Biomass technology under constant development
Several different production technologies have been developed
to convert biomass into heat and electricity. The different meth-
ods of refining biomass are under constant development with a
International biomass trade
Ethanol
Wood pellets
Palm oil & agricultural residues
BIOMASS
focus on continuous streamlining. The conversion of raw mate-
rial into more energy-dense forms facilitates transport, stor-
age and use through the rest of the value chain. One example
currently under development that would simplify future imports
is the thermal processing of biofuels to produce a more efficient
type of pellet with a higher energy value.
National conditions decisive
The direction of development for biomass use in different coun-
tries is determined by several factors; for example, the way
in which a country values its dependency on oil and natural
gas imports, and the existence of non-biomass options. Other
factors include domestic alternative energy supply options and
existing infrastructure for supplying energy.
Source: IEA, Bioenergy Annual Report 2009
ONE ENERGY SYSTEM | 31
BIOMASS

Vattenfall and Biomass

Biomass is a renewable energy source that can be used to produce both heat and electricity. It can poten-
tially play a key role in reducing CO2 emissions from existing European coal power plants. Vattenfall has a
long history of working with biomass heat production, and plans to increase co-firing of biomass in coal-fired
power plants to reduce CO2 emissions. Vattenfall intends to allocate significant resources and efforts to
build a substantial, highly reliable and sustainable biomass supply chain.

Vattenfalls biomass operations
Vattenfall is one of the worlds largest purchasers of biomass
for power generation. The biomass used by Vattenfall is com-
prised primarily of household and industrial waste (over 60 per
cent) and forestry industry residue (30 per cent). The remainder
is comprised chiefly of agricultural residues.
Over 40 of Vattenfalls heating and power plants are po-
wered entirely or partially by biomass. Vattenfall uses a total
of three million tonnes of biomass per year, placing Vattenfall in
an industry-leading position. The use of biomass in Vattenfalls
plants will increase substantially when large-scale co-firing is
implemented.
Vattenfall runs several biomass projects in Europe. In Germany,
biomass-fired power plants are being planned in Berlin and
Hamburg. In Poland, the Zeran and Siekierki combined heating
and power plants are increasing the use of biomass and will use
400,000 tonnes by 2013. Co-firing will be stepped up in several
other countries as well, including the Netherlands. New biomass
plants are also being planned (e.g., in Denmark). For a full list of
Vattenfalls biomass power plants, please see the production
site at www.vattenfall.com/powerplants.
Sourcing sustainable biomass - rubber trees from Liberia
Vattenfalls need for biomass is increasing and volumes availa-
ble in Europe are not sufficient. Vattenfall is therefore develop-
ing an international portfolio of projects to secure sourcing of
the required volumes. An attractive option, both economically
and environmentally, is the use of unproductive rubber trees
from plantations in Liberia.
Liberia is a country with a large resource of rubber trees, and
rubber export is a key component in plans to revitalise the econo-
my. The rubber trees are cultivated in plantations and typically
produce latex when they are between 7 and 30 years of age, after
which they are harvested and replaced by new trees. The prac-
tice has been to let these harvested trees rot or to burn them on
site, with some of the wood used for charcoal production.
Buchanan Renewables, a Canadian-owned company based
in Liberia, has developed a biomass business based on making
wood chips from these non-productive trees. In 2010, Vattenfall
acquired 30 per cent of Buchanan Renewables Fuel together
with Swedfund, the Swedish governments company for invest-
ments in developing countries, in order to secure the supply of
large volumes of sustainable wood chips. Purchasing the trees
that are no longer producing rubber, and which would in any
case be disposed of, is an environmentally and economically
efficient option.

Vattenfalls biomass operations going forward

Biomass plays a central role in Vattenfalls efforts to reduce its
CO2 exposure. In the medium term, biomass is the renewable
energy source with the most growth potential. Since biomass
can be co-fired in coal plants, it is an effective way of reducing
CO2 emissions. Vattenfalls goal is to burn four million tonnes of

32 | SIX SOURCES OF ENERGY

 BIOMASS

SUMMARY
g 286::2:9070=/500709?:890;;
has the potential to reduce CO 2 emissions,
biomass annually by the year 2014, which would reduce CO2 emissions by five million for example through co-firing in existing
tonnes annually. coal power plants in Europe
Vattenfall will make significant biomass investments through the year 2015.
g #0/286:::0270;7050;922;?
These investments will be made in new power plants and in increasing the amount of generation today is primarily derived from
coal co-firing in existing plants. forest products, waste and other residues
Co-firing biomass with coal in existing power plants significantly reduces the from the agricultural and forest industries
plants CO2 emissions. Co-firing offers many advantages, the foremost being the
g $:27/286::;8980050;922;?2:9-
reduction of CO2 emissions from existing power plants without requiring invest- rently more expensive than using energy
ments in new plants. Vattenfall is constantly working to increase the use of biomass sources such as coal, gas or nuclear power.
in its hard coal power plants. The global biomass supply chain is develo-
In terms of research and development, Vattenfall focuses primarily on new ping and, over time, technological and
processing techniques. Biofuels produced through thermal treatment (black pel- logistical improvements will bring down
lets) and the use of such fuels is one major focus area. prices. An increased CO2 price will also
improve the economic competitiveness of
Toward a sustainable biomass production biomass
Although energy crops may be problematic to cultivate, they have the potential to g 7;097;2875 ;90 27 /286:: 189 8=09
become an important export commodity for many countries. Vattenfall is working to generation is still limited, though an
develop the entire biomass value chain, from cultivation to combustion via logistics increase in imports from other parts of
and fuel processing. the world is expected. The challenge lies in
If biomass is to increase its share in the energy mix, todays use of waste and ensuring an environmentally and socially
residues will not be enough. A higher level of processing and increased international sustainable value chain
trade may allow for the utilisation of a larger portion of the residues from the global g #0/286:::0/?%;;071552:8692:0
forestry industry. The production of energy crops and energy forests may also have of over 60 per cent household and industrial
to be increased. waste and 30 per cent residues from the fo-
One major challenge is finding suppliers that can provide large amounts of bio- restry industry. The remainder is comprised
mass that meet sustainability and affordability requirements. Cultivation of energy chiefly of agricultural residues
crops and forests can cause harm to environmentally important forests and the loss g 286::5?:07;95985027%;;07155:
of biodiversity. One of Vattenfalls main challenges is finding producers that meet efforts to reduce its CO2 emissions; e.g.,
the companys stringent environmental and social sustainability standards. through co-firing in coal power plants

Footnotes Biomass
1
International Energy Association (IEA), World 8
European Commission (2010): Report from the
Energy Outlook 2009 Council and the European Parliament on sustain-
2
Hansson, J. (2009), Perspectives on Future Bioen- ability requirements for the use of solid and gase-
ergy Use and Trade in a European Policy Context, ous biomass sources in electricity, heating and
Chalmers University of Technology, Gothenburg cooling
3
Ibid. 9
Ibid.
4
McKinsey, Vattenfall, Sveaskog, Sdra, European 10
McKinsey, Vattenfall, Sveaskog, Sdra, European
Climate Foundation (2010): Biomass for Heat and Climate Foundation (2010), op. cit.
Power Opportunity and Economics 11
Ibid.
5
Ibid. 12
Ibid.
6
Ibid.
7
IEA Statistics, Electricity Generation, 2010,
www.iea.org

ONE ENERGY SYSTEM | 33

COAL POWER
Coal is a cornerstone of the European energy system due to its economic
attractiveness and characteristics that allow stable large-scale electricity
generation. Coal power accounts for approximately 28 per cent of total
electricity generation in the EU. CO2 released by coal combustion consti-
tutes a large share of global emissions. Carbon Capture and Storage (CCS)
is a technology currently under development to reduce CO2 emissions from
coal power plants.

34 | SIX
SIX FORMS
SOURCES
OF OF ENERGY
ENERGY
ONE ENERGY SYSTEM | 35
COAL POWER

The Energy Triangle Coal Power

Climate and environment

All energy sources have environmental impact during their life cycles. Combustion of
energy sources, particularly fossil fuels, generates CO2 emissions and contributes to
global warming. In the long run, emissions from power production will need to be close
to zero if greenhouse gas levels in the atmosphere are to be stabilised.

Coal power plants emit high levels of CO2 into the atmosphere during the combus-
tion process, which affects the climate. Coal mining also interferes significant-
ly with the landscape, and open-cast mines must be re-cultivated. Major efforts,
including the development of clean coal technologies to reduce CO2 emissions,
are being made to manage the climate impact of coal power plants.

Security of supply Competitiveness

Fuel shortages and unreliable electricity systems cause
societal and economic problems. Securing supply means
guaranteeing that primary energy is available, and that
delivered energy is reliable, essentially 100 per cent of the
time. This is a major political and technical challenge.
Energy is a fundamental input to economic activity, and
thus to human welfare and progress. The costs of produc-
ing energy vary between different energy sources and
technologies. A competitive energy mix will keep overall
costs as low as possible given the available resources.

Coal power plants provide stable and large-scale elec-
tricity generation, and the availability of coal is good.
Of the Earths fossil fuels, coal is the most abundant
and widely dispersed, meaning that supplies are rea-
dily available and not subject to disruption.
Coal power has a competitive production cost. Fuel
costs are low and coal markets are well-functioning.
However, technologies to reduce coal power plant
CO2 emissions are expensive and call for substantial
investments.

36 | SIX SOURCES OF ENERGY

 COAL POWER

The History of Coal

Coal began forming over 300 million years ago. Of the Earths
fossil fuels, coal is the most abundant. Coal is formed when
plants and animal remains are exposed to high pressure in an
anaerobic environment over a long period of time, just as in the
conversion into oil. There are several different types of coal, two
of which are used in electricity generation: lignite and hard coal.
Lignite is peat that was converted under high pressure 15 to
20 million years ago. Hard coal is lignite that is exposed to addi-
tional pressure deep within the Earth.
An energy source with long history
Humans recognised the advantages of coal early on. Then,
as now, coal was considered an efficient, inexpensive energy
source. But the use of coal did not truly gain momentum until the
industrial revolution.
Coal was an important engine of social development during
the 18th and 19th centuries, prior to which it was used primarily
for heating. In Great Britain large quantities of coal enabled
the industrial production of steel to build railways. During the
American Civil War, coal was used for iron and steel production.
As the industrial revolution spread to the rest of Europe and to
Japan, coals key role was realised.
The use of coal decreased as other more convenient energy
sources, such as oil and gas, became increasingly prevalent as
fuel and heating sources. Coal was instead used in ways that
it is typically used today; for steel manufacturing and electri-
city generation. Coal remains an important energy source, and
has been the fastest growing energy source in terms of volume
since the year 2000. Between 1990 and 2008, the amount of
coal used in the energy sector increased by almost 50 per cent,
and it is expected to continue to grow.1 The primary reason for
this is the increased energy demand in emerging markets such
as India and China. Today, coal accounts for more than one-
quarter of the worlds total energy demand and is therefore one
of our most important natural resources.2
Coal in many forms
Currently, hard coal and lignite are used primarily in thermal
power plants. But the energy contained in coal presents many
more possibilities. To begin with, solid coal is converted into
liquid or gaseous forms. After gasification or liquefaction coal
can be used as a substitute for natural gas or crude oil products.
This allows usage in engines, burners or as a base product for
the chemical industry.

Global lignite and hard coal reserves (2009)

Europe & Eurasia

North America

Middle East & Africa

Asia & Pacific

Central &
South America (Million tonnes) Lignite Hard Coal
North America 132,816 113,281
Central & South America 8,042 6,964
Europe & Eurasia 170,204 102,042
Middle East & Africa 174 33,225
Asia & Pacific 103,444 155,809
Source: BP Statistical Review of World Energy, 2010

ONE ENERGY SYSTEM | 37

COAL POWER
How a Coal-fired Power Plant Works
Coal becomes electricity
Coal extracted from
quarry or mine
Coal transported to
power plant
Coal becomes electricity
Both types of coal, hard coal and lignite, are used to generate
electricity and in some cases district heating. Lignite has lower
energy content and is only used in power plants located adja-
cent to lignite quarries. A hard coal-fired plant is slightly more
efficient. But in terms of heat value, lignite is less expensive than
hard coal per gigajoule.
In the first coal-fired power plants built at the end of the 19th
century, lumps of coal were stoked into simple boilers. Nowa-
days, coal is usually ground to a fine powder and dried so that
it burns hotter and faster. It is then blown into a combustion
chamber and burned at a very high temperature. The gene-
rated thermal energy heats water, creating steam which is then
transferred to a set of turbines that have propeller-like blades.
The steam drives the blades, causing a turbine shaft to rotate
at high speed. A generator is placed at one end of the turbine
shaft. Electricity is produced as the shaft rotates. After pass-
ing the turbine, the steam is re-condensed and returned to the
boiler to be heated again. In some power plants, the generated
heat is also used for district heating.
38 | SIX SOURCES OF ENERGY
Coal is combusted
and converted
into electricity,
which is then dis-
tributed through
the electricity grid
Coal extraction how it works
There are two basic methods for extracting coal: underground
and opencast mining. The method utilised is based on geology;
i.e., the depth of the deposit and the condition of the soil or bed-
rock around the coal field. Today, underground mining accounts
for approximately 60 per cent of global coal production, though
this figure varies by area; in Australia, for example, opencast
mining accounts for 80 per cent of total coal production.
Surface extraction, from opencast mines, is used in instances
where coal lies close to the surface. The coal, mostly lignite, is
reached by digging up layers of soil, sand and rock and entails a
substantial degree of interference with the landscape and envi-
ronment. Former mining areas therefore require intensive re-
cultivation. Among other things, soil is used to construct lakes,
pasturelands or different types of cultivation. Forests, farm-
land and various biotopes and geotopes are recreated after the
landscape is formed.
Underground coal extraction is used when the coal is stored
deep in the earth. This type of extraction is more risky than
surface mining and therefore requires additional planning

measures; for example, advanced drainage and ventilation
systems to avoid the accumulation of water or explosive mine
damp. Working conditions in coal mines have historically been
arduous; even today, some coal mines do not meet modern
safety requirements.
Coal technology under constant development
Thanks to new and improved technologies, todays coal-fired
power plants are more efficient than ever. Progress has been
made in the development of new technologies to reduce emis-
sions over the past 30 to 40 years. Nowadays great quantities
of particulates are refined out of the combustion gases that
were previously emitted, unfiltered, into the air. Well-developed
technologies are able to clean emissions of sulphur, nitrogen
oxides, complex hydrocarbons, dust and heavy metals. Flue gas
washing, for example, is used to reduce emissions of sulphur.
Effective particulate filters can prevent over 99.9 per cent of
dust emissions from escaping into the atmosphere.3
Coal-fired power plants constructed today are more efficient
and emit less CO2 than older plants. Efficiency is 10 percent-
age points higher, meaning that less fuel is needed to produce
Coal-fired power plant
Stack
Turbine
Coal supply
Flue gas cleaning
Steam
Furnace
Water purification
Conveyor
Grinder
Ash
COAL POWER
the same amount of energy, while emissions are up to 22 per
cent lower. In practice, this means that an efficiency increase of
one percentage point reduces CO2 emissions by two to three
per cent.4
Today, however, many plants in countries such as China
and India are outdated. In 2008 there were over 8,000 small
coal-fired power plants in China, many with low efficiency and
high emission levels.5 Most plants in the US, South Africa and
Europe need to be replaced as well. The average efficiency of
the worlds hard coal-fired power plants is currently 28 per cent,
compared to more than 46 per cent for modern plants.6 But in
emerging countries, old plants are still needed to meet growing
electricity demand.
Despite the fact that emissions of many harmful substances
produced by coal combustion can be reduced and eliminated
thanks to technological developments, a major problem remains:
carbon dioxide. Since the use of coal is expected to increase
globally, coal combustion technology for efficiency and emis-
sion reduction must make headway. Improved coal combustion
efficiency, combined with carbon capture technology, is a
prerequisite for decreasing the worlds CO2 emissions.
Generator
Condensor
Water
Coal is ground to a fine powder. It is then blown into a
combustion chamber and burned at a very high tempera-
ture. The generated thermal energy heats water, creating
steam which is then transferred to a set of turbines that
have propeller-like blades. The steam drives the blades,
causing a turbine shaft to rotate at high speed. A genera-
tor is placed at one end of the turbine shaft. Electricity is
produced as the shaft rotates. After passing the turbine,
the steam is re-condensed and returned to the boiler to
be heated again. In some power plants, the generated
heat is also used for district heating.
ONE ENERGY SYSTEM | 39
COAL POWER

Coal Power in Europe

Many European countries are dependent on coal power to meet
their energy needs. In 2008, coal power accounted for 28 per
cent of total electricity generation in the EU, down from over 40
per cent in 1990.7 In absolute terms of measurement, Germany
and Poland are the European countries that are most dependent
on the use of coal in their electricity generation. In terms of share
of energy mix, Denmark and the UK are also major coal users.
In Germany, coal power accounts for approximately 46 per
cent of electricity generation. The corresponding figure in
Poland is almost 92 per cent.8 Just as in many other parts of the
world, the explanation for coals significance in these areas is
the existence of large domestic coal reserves that are expect-
ed to last for a long time, as well as access to reliable, cost-
efficient technology for electricity and heat production. This
makes coal power a relatively inexpensive energy source that
bolsters security of supply in the energy system and increases
the degree of energy self-sufficiency. The negative opinion on
nuclear power in some European countries also contributes to
an increased dependence on coal as a baseload power.
Coal-fired power plants in EU countries have approximately
201 GW of installed capacity, equivalent to roughly 13 per cent
of the worlds total installed coal power capacity.9 In growing
economies such as China and India, coal power is expanding at
a rapid pace. China and India already have a combined installed
coal power capacity of 647 GW, more than three times the total
EU capacity.10 In the USA, where half of all electricity generation
takes place in coal-fired power plants, total installed capacity
amounts to 334 GW.11

Share of coal power in electricity generation (2008) Coal-fired power generation capacity under
construction (2008)
% GW
100 120

110
90
100
80 112
90
70
80
60 70

50 60

50
40
40
30
51
30
20
20
10 10 19 17 17

0 0
n Danmark 48 % n Netherlands 25% n Sweden 1% China India US Europe Other
n Frankrike 5 % n Poland 92% n UK 33%
n Tyskland 46 % n Spain 16% n Finland 18%

Source: IEA Statistics, Electricity Generation, 2010 Source: IEA, World Energy Outlook, 2009

40 | SIX SOURCES OF ENERGY


The Future of Coal Power
Coal power will continue to be a cornerstone of the European
energy system for the foreseeable future. But carbon dioxide
released by coal combustion constitutes a large share of total
global emissions. For each produced kilowatt hour of electricity,
corresponding roughly to the amount of electricity consumed
by watching TV for one evening, modern coal-fired plants emit
just under one kilogramme of CO2. The EUs climate goals call
for a 20 per cent reduction in CO2 emissions over 1990 levels by
2020, so identifying short-term solutions to reduce CO2 emis-
sions is a key challenge. There is no single solution that can
meet this challenge, particularly in light of the fact that many
countries currently depend on coal power plants to meet their
energy supply needs. A significant expansion of renewable
electricity generation is required, as well as continued efforts
to develop technology to reduce the climate impact of existing
Coal- or gas-fired power plant equipped with CCS
) Carbon dioxide is transported
in pipelines or by boat
Carbon dioxide is
* pumped down to non-
degradable coal beds,
+ deep rock formations
that are filled with salt water
(salt water aquifers)...
COAL POWER
coal-fired power plants. To date, emissions of coal-fired power
plants have been significantly reduced through flue gas clean-
ing and by efficiency measures such as coal drying. But addi-
tional measures are needed to minimise CO2 emissions to the
atmosphere. Two important measures are Carbon Capture and
Storage technologies and co-firing biomass in coal plants.
Carbon Capture and Storage underground
storage of CO2
There are currently several projects underway to develop tech-
nologies for burning fossil fuel and simultaneously storing the
CO2 released. These methods are known by the collective term
CCS (Carbon Capture and Storage). Opinions differ among
researchers as to the potential of the technology. At the same
time, CCS presents the only technological option to reduce CO2
( Coal- or gas-fired power plant
equipped with CCS
Carbon dioxide separated from
flue gases and compressed.
In the future, 90% of all carbon dioxide
will be captured
, ...or empty oil
and gas fields
ONE ENERGY SYSTEM | 41
COAL POWER

emissions in countries that are expected to remain depend-

ant on fossil fuels for the foreseeable future. Within the EU, the
development of CCS is considered a prerequisite to achieve
the EUs climate goals. According to the IEAs calculations, CO2
emissions from the energy industry can be reduced by 20 per
cent by the year 2050, provided that CCS technology is imple-
mented.12
CCS technology is based on separating carbon dioxide from
the combustion gases that arise from, for example, fossil fuel
power generation. Instead of being emitted into the atmos-
phere, the CO2 is separated from other gases and compressed,
pumped down and stored in deep geological formations. The
storage technology is nothing new; CO2 injection has long been
used within the oil industry, where CO2 is pumped down into
bedrock to extract oil from dwindling reservoirs.

CCS technology separation, transport and storage

In practice, CCS is a three-phase system: CO2 separation,
transport and storage. Technology for separating CO2 from
other gases has long been used within the industry. Within the
agricultural and chemical industries, separated CO2 is used, for
example, to treat pulp or as protective gas in the packaging of
food products. CCS technology is the same, albeit with a diffe-
rent purpose: the return of carbon dioxide to deep underground
depths.
Power plants are constructed either close to cities that will
consume the released heat or close to the fuel source. Neither
location necessarily offers geological formations that are suit-
able for CO2 storage. The choice of storage site is determined
by different criteria; for example, the bedrocks suitability for
encapsulating and storing CO2 for thousands of years. Diffe-
rent countries and regions have different geological conditions,
so distances between capture and storage locations will often
vary widely. Pipelines and ships are the most attractive options
for transporting the large amounts of CO2 produced in power
plants. Large volumes of CO2 are already transported over
long distances in high-pressure pipelines in the US. The pipe-
lines extend over 2,500 km and the transported CO2 is used to
enhance oil production in mature oil fields. Carbon dioxide can
also be transported by ship. Existing technology and expe-
rience from transporting petroleum gas and natural gas can be
transferred to CO2 transport.
The two most interesting alternatives for storing CO2 from
fossil fuelled power plants are depleted oil and gas reservoirs,
and deep saline aquifers. More than 70 enhanced oil recovery
(EOR) projects using a similar technology are currently under-
way throughout the world. Depleted oil and gas fields have pro-
ven their capability to hold oil and gas over millions of years and
thus have great potential to serve as long-term storage sites

42 | SIX SOURCES OF ENERGY

 COAL POWER

for CO2. Saline aquifers are underground rock formations that Co-firing of biomass a way to reduce emissions
contain salty water. Carbon dioxide partially dissolves in the Co-firing refers to the use of two or more different types of fuel
formation water and, in some cases, the CO2 slowly reacts in a power plants combustion process. Co-firing of coal and
with minerals to form carbonates, thereby permanently trapping biomass in existing coal-fired power plants has been identified
the CO2 underground. as a cost-effective way to quickly reduce CO2 emissions, since
power plants require relatively few changes to allow for a grea-
CCS technology going forward ter blend of biomass. Biomass is almost entirely carbon neutral,
There is still some way to go before CCS can be used to limit which means that biomass combustion releases approximately
the CO2 emissions of existing power plants, but the number of the same amount of carbon dioxide as was taken up by the bio-
demonstration plants is growing rapidly. Provided that research mass (trees, plants or crops) during its growth. In most power
and investments continue, it is estimated that CCS can be plants, between 10 and 15 per cent of the coal used can be
operating commercially by around the year 2020. replaced without significant impact on efficiency or increased
The majority of todays existing CCS projects focus on stor- corrosion risk.13 Agricultural residue, processed wood fuel and
ing CO2 that has been industrial waste can be used as biomass.
separated at natural gas Calculations in a recent study show that co-firing at existing
Provided that research and invest- production facilities or coal-fired power plants could increase EU electricity generation
ments continue, it is estimated that used to increase the pro- from biofuel by 50 to 90 TWh per year, equivalent to 1.5 - 2.5 per
CCS can be operating commercial- duction in dwindling oil cent of the EUs total electricity generation. This could reduce
fields. Research in these CO2 emissions by around 85 million tonnes per year, represent-
ly by around the year 2020. areas is focused on veri- ing an estimated five to 10 per cent of the reductions required
fying the security of the to meet the EU s 2020 climate goal.14 However, the availability
storage site. Other projects include research for higher effi- of biomass is limited and there will most likely be competition for
ciency within the sequestration process, alternatives for trans- the biomass resources that do exist. Future availability depends
port and storage and expanding use of commercially available to a large degree on pricing, on what will be producible at low
technology. cost and where it can be produced, and the level of acceptance
A number of legal issues must be resolved before large-scale of biomass production for energy purposes. There is a potential
CCS investments can be made. Most of these issues deal with for biomass in European countries, but it is hard to predict the
the development of monitoring and security regulations and types of biomass that will be used in the future.
rules governing liability for accidents and leakage. In the EU, a
directive has been passed that should lead to comparable laws
for the implementation of CCS in all EU member states.
In almost all cases, preventing CO2 emissions comes at a price.
This is also the case with CCS. One of the major commercial chal-
lenges is to reduce energy consumption in the separation proc-
ess, which essentially lowers the plants efficiency. Another chal-
lenge is to hold down the investment costs of carbon separation
technology. Technologies to separate and store CO2 are most
effective in larger coal and heavy oil combustion plants, where
the CO2 concentration is high and the potential amount of sepa-
rated CO2 is large enough to justify the use of the technology.
Estimates of future CCS costs vary widely; nearly a decade
remains before the technology will be ready for commercial
use. Cost estimates will become more concrete as that date
approaches. The potential of CCS is obviously closely linked to
the cost of utilising the technology. The fact that new technol-
ogy entails cost is an obstacle faced by all modern energy tech-
nology, from wind power to solar cells and sea-wave power.

ONE ENERGY SYSTEM | 43

COAL POWER

Vattenfall and Coal Power

Coal is a cornerstone of the European energy system, due to its economic attractiveness and ability to con-
tribute to secure and stable electricity generation. Vattenfall is optimising its existing production portfolio
and investing to enhance efficiency and reduce CO2 emissions in existing plants. In general, coal will become
a smaller part of Vattenfalls portfolio after 2015.

Vattenfalls coal power operations

Vattenfall operates around twenty coal-fired power plants
located in Germany, Poland, Denmark and the Netherlands.
These plants have an aggregate capacity of about 12 GW and
in 2009 accounted for 45 per cent of Vattenfalls electricity
generation and 66 per cent of its heat production.
The electricity produced by Vattenfall in Germany is mainly
based on lignite. Vattenfall owns and operates its own lignite
mines in Lausitz, eastern Germany. Vattenfall is an important
employer in that region, and lignite plays a central role for the
regions industries and economic development. Vattenfall uses
hard coal, purchased from subcontractors, in its hard coal-fired
plants in Denmark, Poland, Germany and the Netherlands. In
2009, lignite accounted for a total of 50 TWh and hard coal for a
total of 21 TWh of Vattenfalls electricity and heat production.
For a full list of Vattenfalls coal power plants, please see the
production site at www.vattenfall.com/powerplants.

Vattenfalls coal power operations going forward

Coal power will continue to be a cornerstone of the European
energy system for the foreseeable future and, as such, will
remain part of Vattenfalls portfolio. Vattenfall is optimising
its existing production portfolio and investing to improve effi-
ciency and reduce the CO2 emissions of existing plants. The
Boxberg and Moorburg projects will be completed, and phase
two of the Nuon Magnum multi-fuel plant pursued, but no other
coal-fired plants will be built until they can be built with CCS.
In general, coal will become a smaller part of Vattenfalls port-
folio after 2015, through asset divestment, fuel replacement and
switching away from non-commercial plants after 2020.

Strategy to reduce CO2 exposure

Vattenfall intends to cut its CO2 exposure from 90 million
tonnes in 2010 to 65 million tonnes by 2020. The CO2-reduction
strategy has three legs: divestments, the replacement of hard
coal with biomass, and replacement of non-commercial plants.
Divestments are expected to reduce CO2 exposure by 12 to 14
million tonnes per year. Vattenfall has initiated a study exploring
options to reduce CO2 exposure by selling assets, primarily in
Schwarze Pumpe coal power plant in southeast Brandenburg in Germany.
Poland and Denmark.

44 | SIX SOURCES OF ENERGY

 COAL POWER

SUMMARY
g 85 8=09 98<20: :;/50 7 590
scale electricity generation and has a com-
Replacing hard coal with biomass in coal-fired power plants is expected to reduce petitive generation cost. Fuel costs are low
CO2 exposure by 8 to 10 million tonnes annually. An extensive biomass programme is and coal markets are well-functioning
underway and has already produced good results.
g 7? 9807 87;920: 90 00707;
Lower utilisation rates of older coal-fired plants, and replacement of non-com- on coal power to meet their energy needs.
mercial plants with gas, biomass, or CCS when commercially viable. Anticipated In 2008, coal power accounted for 28 per
reduction of 12 to 14 million tonnes per year. cent of total EU electricity generation
Due to the completion of the new Moorburg and Boxberg power plants, emissions
g 858=0957;:062;250<05:81 2
will increase slightly during the next few years, after which emissions will be gradu- into the atmosphere during the combus-
ally reduced through 2020. tion process, which affects the climate.
Coal mining also interferes significantly
Vattenfalls investments in CCS with the landscape, and open-cast mines
Vattenfall invests in the development of CCS technology to reduce CO2 emissions must be re-cultivated
into the atmosphere from coal-fired power plants. Vattenfall is working to integrate g 892781857/286::270>2:;27
CCS in large demonstration plants and is collaborating with various stakeholders to coal-fired power plants has been identified
develop the requisite social, legal and financial conditions. An important milestone as a cost-effective way to quickly reduce
for Vattenfalls CCS efforts was the construction of a pilot plant at Schwarze Pumpe CO2 emissions. In most power plants,
near Cottbus, Germany, the first of its kind based on lignite. The plant opened on 9 between 10 and 15 per cent of the coal
September 2008 and has attracted great international attention and many visits used can be replaced without significant
from industry specialists and researchers. The next step is a full-scale demonstra- impact on efficiency or increased corro-
tion plant of a size sufficient to evaluate commercial conditions at Jnschwalde in sion risk
Germany. Through Nuon, Vattenfall is also building a pilot plant with pre-combustion g %;;07155 809;0: 987 ;=07;? 85
technology at the Willem Alexander power plant in Buggenum, Netherlands. Please fired power plants located in Germany,
see Vattenfalls homepage for more information about Vattenfalls CCS projects, Poland, Denmark and the Netherlands
www.vattenfall.com/ccs. g 38901189;:90/02760;8670
the climate impact of coal power plants,
such as development of clean coal techno-
logies to reduce CO2 emissions. Vattenfall
will not build any new lignite- or hard coal-
fired plants until Carbon Capture and Stor-
age (CCS) is a viable technology
g %;;07155 =255 87;270 ;8 0<058 
technology. Next step is the CCS demon-
stration plant in Jnschwalde in Germany
g 858=09=25587;270;8/089709-
stone of the European energy system
for the foreseeable future and, as such,
Footnotes Coal power will remain part of Vattenfalls portfolio.
1
International Energy Agency (IEA), World Energy 9
IEA, 2010, op. cit Vattenfall is optimising its existing pro-
Outlook 2010 10
Ibid.
2
Ibid. 11
Ibid. duction portfolio and investing to improve
3
You can read more about this in Vattenfalls CSR Report 12
IEA, World Energy Outlook 2009 efficiency and reduce the CO2 emissions of
2008 13
Hansson, J. (2009), Perspectives on Future Bioenergy
4
IEA, Focus on Clean Coal, 2006
existing plants
Use and Trade in a European Policy Context, Chalmers
5
OECD, Opportunities and Barriers for Clean Coal University of Technology, Gothenburg
and Other Clean Technologies, 2008 14
Ibid.
6
IEA, 2006, op.cit.
7
IEA, 2010, op.cit.
8
IEA Statistics, Electricity Generation, 2010,
www.iea.org

ONE ENERGY SYSTEM | 45

HYDRO POWER
Hydro power is a renewable energy source that is economically attractive, provides
security of supply and has low levels of CO2 emissions. It is one of our oldest energy
sources and has been used for thousands of years. Hydro power is by far the leading
renewable source of energy in the EU energy mix, and accounts for approximately
10 per cent of the EUs electricity generation.

46 | SIX SOURCES OF ENERGY

ONE ENERGY SYSTEM | 47
HYDRO POWER

The Energy Triangle Hydro Power

Climate and environment

All energy sources have environmental impact during their life cycles. Combustion of
energy sources, particularly fossil fuels, generates CO2 emissions and contributes to
global warming. In the long run, emissions from power production will need to be close
to zero if greenhouse gas levels in the atmosphere are to be stabilised.

Hydro power is a renewable energy source that causes almost no emissions

that impact the climate or the environment. However, power plants are a signif-
icant encroachment on the landscape and impact river ecosystems. A power
plant may also affect animal and plant life in the vicinity.

Security of supply Competitiveness

Fuel shortages and unreliable electricity systems cause
societal and economic problems. Securing supply means
guaranteeing that primary energy is available, and that
delivered energy is reliable, essentially 100 per cent of the
time. This is a major political and technical challenge.
Energy is a fundamental input to economic activity, and
thus to human welfare and progress. The costs of produc-
ing energy vary between different energy sources and
technologies. A competitive energy mix will keep overall
costs as low as possible given the available resources.

Hydro power plants provide large-scale and stable Hydro power has no fuel costs and competitive gene-
electricity generation which can often be controlled ration costs. Constructing a new plant requires a sub-
domestically. But sustained high generation levels are stantial investment, but the economic life of a plant
dependent on precipitation. Hydro power also func- is long.
tions as balancing power, since capacity can be rapidly
changed to compensate for differences in generation
and consumption in the mains supply.

48 | SIX SOURCES OF ENERGY


The History of Hydro Power
Hydro power is one of our oldest energy sources and has
been used for several thousand years. In ancient India, Rome
and China, water wheels were built to operate mills and timber
saws. Hydro power was developed over the centuries, and was
used in the early industrial era to power spinning machines and
looms in textile factories in England and other countries. But
modern, large-scale hydro power as we know it today first came
into being with the invention of the electric motor and electric
generator.
Hydro power involves harnessing the energy present in the
movement of water to generate electricity. Water movement
occurs in many different ways. The movement of water through
its natural cycle creates streams and rivers. Winds and ocean
currents create waves, and the moons gravitational force
creates tidal flows. Hydro power can also be found in the energy
created in the mixture of fresh and salt water as rivers and
streams flow into the sea.
The natural water cycle
Precipitation
from clouds
Hydro power plant
HYDRO POWER
Glaciers and lakes are created through evaporation and
precipitation, and water flows back to the sea via rivers and
streams. In order to harness the energy of running water, water-
courses are altered so that the flow can be controlled and the
water can be directed from dams to a lower level via a turbine.
As water from the dam flows through the turbine, the waters
potential energy is converted to mechanical energy which is
then converted to electric energy via a generator.
Sweden an example of the significance of hydro power
Hydro power played a decisive role in Swedens transforma-
tion from a poor exporter of raw materials to a rich country with
high-tech, electricity-intensive manufacturing industries. This
industrial development placed enormous demands on the ener-
gy supply, and the Swedish state recognised early on the poten-
tial presented by Swedish rivers.
Water vapour
rises, condenses
and forms clouds
Solar heat
evaporates water
Hydro power plant
ONE ENERGY SYSTEM | 49
HYDRO POWER
Sweden became a world leader in the development of large-
scale hydro power during the 1900s. The hydro power plant in
Porjus, officially opened in 1915, was built to provide electricity
to the ore railway (Malmbanan) in northern Sweden and was one
of the largest, most highly advanced hydro power projects that
had been carried out to date. The 1930s saw the development
of the technology necessary to send electricity over longer
distances, and the major rivers in northern Sweden could there-
by be used in earnest to process Swedish natural resources
such as timber and ore. The Harsprng power line was opened
in 1952. Running from the Harsprng power plant (one of the
worlds largest hydro power plants, located outside Jokkmokk)
to Hallsberg, nearly 1,000 kilometres to the south, the power
line linked the entire Swedish power network.
The inexpensive, secure electricity provided by hydro power
enabled the emergence of Swedish base industry and served
50 | SIX SOURCES OF ENERGY
as the foundation for rapid Swedish economic growth in the
mid-1900s. The mining industry, iron and steel mills, chemi-
cal industries and paper and pulp mills all developed thanks to
their interplay with hydro power, and this remains true today.
Swedens exports still consist to a great degree of products
from energy-intensive industries1, and access to inexpensive,
secure electricity is therefore of great importance to the Swed-
ish economy.
Global and local considerations conflict
Hydro power on the whole receives strong support from nearly
all sections of society, and attitudes towards hydro power do
not appear to be affected to any significant degree by politi-
cal orientation, educational level or age. Negative views are
generally targeted at expansion of hydro power and usually not
at existing hydro power plants.
Large-scale hydro power has very little impact on the climate
and environment in the wider perspective. But hydro power
does have a major impact on the environment in direct prox-
imity to the plant and watercourse. The impact of hydro power
is accordingly location-specific, which results in distinct con-
flicts of interest. From a climate perspective, hydro power is a
very advantageous type of energy. But for people living near a
planned hydro power plant and for the adjacent environment,
the impact is more tangible than for almost any other type of
energy. Given that large-scale hydro power plants represent a
significant encroachment on the surrounding natural environ-
ment, the preservation of unspoiled watercourses has often
been an argument against the expansion of hydro power.
Public opinion on hydro power has not been entirely positive
throughout the hundred plus years of hydro powers history. Until
the 1950s, hydro power was viewed as something positive and
a necessary part of a functioning electricity generation system
in countries that possessed the appropriate natural resources.
A counter-movement emerged, however, in the 1950s and 60s,
including in Sweden. Nearly all Swedish rivers were developed
at that time, and an activist movement to preserve the last
unspoiled rivers from development gained momentum. Despite
the location-specific environmental impact of hydro power, pro-
tests against its expansion were initiated from throughout the
country.
During recent decades, growing concerns about the green-
house effect and global warming have boosted the general
publics perception of hydro power and it is now viewed as part
of the solution to the climate change problem. Support for hydro
power remains essentially strong and intact. The issue is not
whether hydro power is positive or negative, but rather how
many unspoiled watercourses should be preserved.

How a Hydro Power Plant Works
Anyone who has ever seen a large waterfall understands the
enormous amount of energy present in rushing water. Harness-
ing a natural force of this magnitude requires advanced engi-
neering skill and colossal constructions. Modern hydro power
plants are therefore immense structures with dams that may
be over one hundred metres high, huge man-made lakes and
turbines weighing hundreds of tonnes. The technology behind
hydro power is fairly simple, but taming the power of water is a
major challenge.
Utilising waters natural cycle by harnessing the energy of
rivers and streams is the most common and significant form of
hydro power. Generally speaking, it works by using flowing water
to power a generator that generates electricity. Dams create
reservoirs that allow for greater heights of fall and also serve
to regulate energy withdrawal; i.e., water is stored and used
when electricity demand is the greatest. The water is directed
from the reservoir to a lower level through tunnels, passing a
turbine on the way. The type of turbine used depends on the
Hydro power plant
Dam
Power grid
Reservoir
Control gate
Transformer
Generator
Turbine
HYDRO POWER
size of the power plant, height of fall and other conditions. The
Francis turbine is the most common type, used chiefly in hydro
power plants with medium heights of fall. Hydro power plants
with higher heights of fall (in the Alps and Norway, for example)
normally use a Pelton turbine. A generator then converts the
mechanical energy generated by the rotating turbine shaft into
electrical energy, a transformer increases the voltage and the
electricity is transmitted to the grid.
Hydro power plants are surrounded by various types of dams,
pools, infrastructure and other things necessary to keep a power
plant running. Various types of research equipment and research
stations are in place, and fish ladders are sometimes used to make
it easier for migratory fish to pass through the power plant. The
look and design of hydro power plants can vary widely depending
on natural conditions, the watercourse where the plant is built and
the surrounding natural environment. A hydro power plant built
high on a steep mountainside in the Alps calls for a completely dif-
ferent design than a plant built in a flat river valley.
Large dams trap the water in reservoirs to create the
necessary fall height and to store some water for later use.
The water falls to a lower level, passing through the turbine.
The turbine axel rotates and powers the generator. The
generator converts the rotating movement of the turbine
into electrical energy. The transformer regulates the
voltage so it is appropriate for the power grid.
ONE ENERGY SYSTEM | 51
HYDRO POWER
Hydro powers significance as balancing power
One problem with electricity as an energy carrier is that it can-
not be stored to any great extent. Water, on the other hand, can
be. Water reservoirs next to hydro power plants can therefore
be thought of as large batteries: water is stored and can be used
as needed. Energy can thus be stored during the times of the
year when water inflow is high and electricity demand is low, and
the energy can then be used when demand is greatest.
Hydro power plants can be used both to generate baseload
power (the amount of electricity that is always needed) and as
balancing power (electricity output that can quickly be turned
on to meet variations in demand). An important characteristic
of hydro power is that it generates a great deal of electricity as
soon as the water is released, and is not dependent on weather,
wind or long, complicated start-up processes, a characteristic
not shared by many other types of energy. Hydro power gene-
ration can be increased, for instance, to cover shortfalls from
wind power and other types of energy that cannot be directly
controlled, or from nuclear and coal power plants which take
longer to get started.
Long useful life and low operating costs
Hydro power plants are large structures and relatively expen-
sive to build. But once the plant is in operation, hydro power is
extremely inexpensive. The plants are almost entirely automat-
ed, no fuel needs to be purchased and maintenance costs are
relatively low. In addition, the useful life of a hydro power plant
is long; many of the plants in operation today were built over
50 years ago and their useful life will continue for many years
to come. Hydro power plants may seem expensive in terms of
construction, but investment costs are quickly recouped once
the plant is in operation.
Environmental consideration and fish conservation
Hydro power is a renewable energy source that produces
almost no emissions that impact the climate or the environment.
But construction of hydro power dams does meet resistance
due to the fact that the dams have a significant impact on the
water flow of the rivers where they are built and on animal and
plant life in the vicinity.
The surface and depth of a dam varies greatly since the water
level is determined by electricity output needs and the amount
of water that is allowed to pass through the power plant. Water
level fluctuations cause nutrient transfer from the productive
52 | SIX SOURCES OF ENERGY
riparian zone, and the bio-
Water reservoirs next logical richness is largely
lost. Fish have a harder
to hydro power plants
time finding food and lay-
can be thought of as ing eggs in the riparian
large batteries: water is zone, and hydro power
stored and can be used plants present migratory
as needed. obstacles for many fish
species. Also, there is a
carbon effect as a reser-
voir is made and carbon in the inundated soil reacts with oxy-
gen in the water to form carbon dioxide. This effect is milder
in Northern European boreal regions than in southern tropical
regions, where methane is also formed. Efforts are being made
to minimise this impact and research is being conducted to iden-
tify additional ways to protect the ecosystem from the effects
of dam construction.2
Various types of waterways are sometimes built around
the power plants to facilitate fish migration. Whenever possi-
ble, spawning grounds that are affected by dam construction
are re-created in locations where they are not impacted by
the power plant in the same way. Different fish have different
migratory patterns: species such as perch and pike need rela-
tively calm water without too much of a slope, while full-grown
salmon need to be able to fight upstream and can jump up to two
metres. Therefore, several types of steeper fish ladders are nor-
mally combined with flatter fish byways; i.e., man-made brooks
and small waterways. There is extensive research on the ways
different species of fish are impacted by changes in water-
courses. Tagging fish with radio transmitters is a new method
being employed to learn more about fish migration.3
Old river channels are often not drained completely. Rath-
er, to make the environment more conducive for plant and ani-
mal life, attempts are made to maintain a natural, though lower,
water flow. Areas containing particularly important habitats,
biotopes and species are protected and many energy compa-
nies are working to restore environments that have been dam-
aged by previous dam construction.
Most countries have legislation in place that obliges hydro
power operators to raise and release fish to compensate for
the impact of hydro power plants on the fish stock. Many of the
largest European fish farms are therefore operated by energy
companies.
 HYDRO POWER

Hydro Power in Europe

Hydro power is by far the leading renewable energy source
in the EU energy mix. According to the IEA, hydro power
accounted for approximately 10 per cent of the EUs electricity
generation and about 60 per cent of total renewable electricity
generation in 2008.4
In global terms, hydro power accounted for 16 per cent of
total electricity generation in 2008, as compared to other types
of renewable energy which in aggregate accounted for barely
three per cent.5 The worlds largest hydro power producers are
China, Canada, Brazil and the US.6
adverse effects on the surrounding natural environment. Safe-
ty aspects are primarily aimed at preventing dam leakage and
rupture. Risks of leakage (e.g., of oil) into water bodies are care-
fully monitored and preventive measures are taken. Advances
in meteorology and hydrology have increased hydro power
plant risk awareness, and investments are currently being
made in many older plants to improve dam safety. Several of
these plants have been fortified to handle water flows that are
so high that, statistically speaking, they are expected to occur
once every 10,000 years.

Hydro power in European countries New technology brings more hydro power to Europe
All countries that have had the option of utilising hydro power Due to the fact that European hydro power is so well-developed,
have considered it obvious to do so. The wide variations in the investments in hydro power in Europe consist primarily of the
amount of hydro power used by different countries are due modernisation and capacity expansion of existing plants.
primarily to geographic, geological and economic factors, not There are also opportunities to expand small-scale hydro
to political decisions. power plants (plants with a capacity of up to 10 MW).
The construction of a large-scale hydro power plant requires
the right kind of watercourse, and these are not present in equal
measures throughout
the world. The propor- Share of hydro power in electricity generation (2008)
Much of the work associated tion of hydro power in
the energy mix of coun- %
with traditional hydro power
tries such as Sweden, 50
focuses on increasing the safety France and Austria, 45
of dams and minimising adverse which have large dif-
40
effects on the surrounding ferences in altitude
35
and suitable water-
natural environment. 30
courses, is therefore
very high. Hydro power 25

comprises over 98 per cent of total electricity generation in 20

Norway, Europes largest hydro power producer with annual 15
generation of approximately 140 TWh.7 Countries such as Den- 10
mark, Germany and Poland, on the other hand, do not possess 5
the conditions conducive for hydro power and therefore rely
0
heavily on other energy sources.
n Denmark 0% n Netherlands 0% n Sweden 46%
n France 12% n Poland 2% n UK 2%
Safety and environmental considerations n Germany 4% n Spain 8% n Finland 22%
Much of the work associated with traditional hydro power
focuses on increasing the safety of dams and minimising Source: IEA Statistics, Electricity Generation, 2010

ONE ENERGY SYSTEM | 53

HYDRO POWER
The Future of Hydro Power
Hydro power will play a crucial role in achieving a sustainable
energy system in the future. The climate change issue has altered
our view of what power generation should look like, and efforts to
switch over to a carbon neutral energy mix are in full swing at all
levels throughout the world. The EU has established a number of
climate targets to serve as the basis for its climate change
efforts through the year 2020. The attainment of these targets
requires an increased use of renewable energy sources, such as
hydro power.
European hydro power is currently well-developed. Although
European hydro power electricity generation will increase
in absolute terms, its share of total electricity generation will
decrease slightly. Future European hydro power investments
will chiefly be made in efficiency measures and improvements
at existing hydro power plants, expanded use of small-scale
hydro power and new hydro power technology. The capacity of
hydro power to store energy and act as balancing power will be
increasingly important as renewable but intermittent types of
energy, such as solar and wind, gain significance. Modern hydro
power will therefore be an essential component in future ener-
gy systems and in achieving the EUs climate goals.
54 | SIX SOURCES OF ENERGY
Great potential for small-scale hydro power
During recent years, small-scale hydro power has been dis-
cussed more and more often. The scientific community agrees
on the great potential presented by small-scale and tidal stream
hydro power plants (plants that utilise natural water flows but
have no dams or regulation capabilities). Like large-scale hydro
power, electricity generation in small-scale plants is renewa-
ble and inexpensive. Moreover, these plants have only a minor
impact on the surrounding natural environment and are often
well-received by public opinion. The disadvantage of small-
scale as compared to large-scale hydro power plants is that
they do not offer the same level of security of supply, since they
often lack regulation or storage capabilities and therefore can-
not be used as balancing power.
At present, however, several regulatory obstacles must be
resolved before a more comprehensive expansion of small-
scale hydro power plants can be achieved. The general view on
increasing the use of this renewable energy source is positive.

Waves generated by wind Pumping power increases
and currents carry enor- system reliability
Hydro-pumping power sta-
mous amounts of energy
tions fill an important role in
which, if harnessed, would the energy system as a way of
be a major contributor to storing energy and equalising
a carbon neutral energy electricity supply and demand.
system. When electricity generation is
high and consumption is low
(e.g., at night or during the
summer months) the surplus is used to pump water into a higher
reservoir. When electricity demand is higher than generation
(e.g., during the day or in winter) the water is released from the
higher reservoir and electricity is produced as in a conventional
hydro power plant. However, hydro-pumping power stations are
net energy consumers, meaning that on average they consume
more energy than they produce.
Combining hydro-pumping power stations with solar power
stations and wind turbines is a method of producing renewa-
ble electricity that offers both security of supply and an even
generation rate regardless of weather conditions. This
method utilises the renewable energy generated by wind
and solar power and combines it with the pumping stations
capacity to store energy. In combination, the power stations
become a net energy producer. However, these efforts are still
in the developmental phase.
Ocean waves are an untapped resource
The new hydro power variant that is considered to have the
greatest potential is sea wave power. Waves generated by wind
and currents carry enormous amounts of energy which, if har-
nessed, would be a major contributor to a carbon neutral energy
system. So far, wave power is in the developmental stage and
harnessing wave energy still presents technical challenges.
Wave power plants must be capable of producing a reasonable
amount of power in light winds and small waves just as in stormy
weather and rough seas. They must also be able to handle
the physical strain the ocean exposes them to, and must have a
minimal impact on animal and plant life. But progress is rapid and
major research projects are underway in several countries.8
Tidal energy a blend of old and new technology
Tidal energy uses the difference in water level height between
high and low tides as well as the currents created by tides in
bays or along coasts. Tidal currents are extremely predictable,
HYDRO POWER
a major advantage in terms of planning generation and main-
tenance. Tidal power plants have been used on a small scale
in places like France since the 1960s, though the potential of
tidal power as a large-scale energy source is not entirely cer-
tain. The main limitation is that very few locations are suitable
for major tidal power plants: the difference in water level must
be substantial for the plant to be profitable.
Osmotic power an innovative idea with great potential
Water can also generate energy in more surprising ways. One
hydro power variant considered as having great potential is
osmotic power, sometimes called salinity power, a method of
harnessing the energy released when fresh water is mixed with
salt water. Osmotic power plants use the physical and chemical
phenomenon of osmosis.
When fresh water meets salt water (for example, when a river
flows out to the sea) enormous amounts of energy are released
which can be converted to electricity. In an osmotic power plant,
fresh and salt water are directed into separate storage contai-
ners. The containers are separated by a semi-permeable mem-
brane which lets through water molecules but not the larger salt
molecules. The salt molecules in the salt water draw the fresh
water through the membrane, creating osmotic pressure in the
salt water container. The pressure built up through this method
is equivalent to a water column of over 100 metres, and is then
used to power a turbine which generates electricity.
Osmotic power is a renewable energy source and could in
theory be used everywhere fresh water flows into salt water.
The potential is great, but the technology is still expensive. The
greatest challenge lies in improving the membranes and mak-
ing them less expensive. The worlds first osmotic power plant,
opened in 2009, is located outside of Oslo, Norway.
New technologies on the way but the traditional ones
remain important
Although new technologies such as wave and osmotic power
have great potential, they are still under development. Their
significance in future energy systems is hard to predict. In the
immediate future, small-scale hydro power will probably be the
hydro power variant that will contribute most to increasing the
amount of renewable electricity, provided that policy frame-
works are developed and administrative processes improved.
Meanwhile, large-scale hydro power will remain the most impor-
tant renewable energy source in the European energy mix.
ONE ENERGY SYSTEM | 55
HYDRO POWER

Vattenfall and Hydro Power

Hydro power is a renewable energy source that is
economically attractive, provides security of sup-
ply and has low levels of CO2 emissions. Vattenfall
has century-long roots in hydro power and conti-
nues to hold a leading position in Sweden. Vattenfall
is committed to hydro power and intends to explore
growth options through acquisitions in Central and
Western Europe.
Vattenfalls hydro power operations
Vattenfall owns and operates more than one hundred hydro
power plants, most of which are located in Sweden with some in
Finland and Germany. Hydro power accounts for roughly 20 per
cent of Vattenfalls total electricity generation and is the most
important renewable energy source in terms of both Vatten-
falls production and the European energy system.
Hydro power has played an important role in Vattenfalls his-
tory. When Vattenfalls predecessor, the State Power Board of
Sweden, was founded in 1909, it was tasked with managing the
Swedish states investments in hydro power. Swedens many riv-
ers and streams comprised an excellent source of energy for
Swedish industry, one which grew at a record pace in the early
1900s. Since then, hydro power has played a vital role for both
Vattenfall and for Sweden.
Vattenfall also operates a number of fish farms, includ-
ing those in Indalslven and Lulelven, to compensate for the
impact that the companys power plants have on fish stocks
in Swedish rivers. Vattenfall is one of Swedens largest fish
farmers, releasing nearly two million salmon, whitefish and sea
trout fry into Swedish rivers each year. For a full list of Vatten-
falls hydro power plants, please see the production site at www.
vattenfall.com/powerplants.

Akkats power plant located in Jokkmokk, north of the Arctic Circle. Akkats forms the gateway to the Swedish Great Lakes
and Laponia World Heritage Site.

56 | SIX SOURCES OF ENERGY

 HYDRO POWER

SUMMARY
g ?988=092:;068:;2689;7;9070=-
able energy source in the EUs energy
Vattenfalls hydro power operations going forward mix. In 2008 hydro power accounted for
Hydro power is increasingly attractive, particularly in light of the fact that the French approximately 11 per cent of the EUs elec-
market is opening up to competition. As one of Europes largest operators, Vatten- tricity generation and about 60 per cent of
fall has a clear competitive advantage. Vattenfall will continue to keep hydro power total renewable electricity generation
growth options open. g ?988=0957;:7/0:0/8;;8
Vattenfall is investing in modernising and upgrading existing hydro power plants, generate baseload power (the amount of
30 or so of which will be upgraded between 2004 and 2014. Vattenfall is also con- electricity that is always needed) and as
ducting a comprehensive dam safety programme. The Abelvattnet power plant, balancing power (electricity output that
in Storuman in northern Sweden, will be Vattenfalls first newly constructed hydro can quickly be turned on and off to meet
variations in demand and supply)
power plant in over 15 years.
The share of hydro power in Vattenfalls electricity generation is expected to g ?988=0957;27809;2872:<09?
inexpensive. The plants are almost entirely
fall to just over half of its current level by 2030. This is not due to a reduction in
automated, no fuel needs to be purchased
hydro power generation, but to the fact that hydro power is already well-developed.
and maintenance costs are relatively low.
Simply put, there are few opportunities to build more or to expand existing hydro
Hydro power plants are expensive to build,
power plants as the demand for electricity rises. Increases in electricity generation but the useful life is long
will therefore come primarily from other types of energy.
g ?988=09980:/:255?78062:-
sions that impact the climate or the envi-
ronment. But construction of hydro power
dams have a significant impact on the
water flow of the rivers where they are built
and on animal and plant life in the vicinity.
Efforts are being made to minimise this
impact and research is being conducted
to identify additional ways to protect the
ecosystem from the effects of dam con-
struction
g #0 0<058607; 7 2790:0 :0 81
new hydro power technologies, such as
wave power, pumping power stations and
osmotic power, will be essential elements
in achieving a sustainable energy system
in the future. However, traditional large-
scale hydro power will in all likelihood
remain the most important renewable
energy source in the European energy mix
g %;;07155:07;9?587988;:27?98
power and currently owns and operates
over one hundred hydro power plants. As
one of Europes largest operators, Vatten-
fall has a clear competitive advantage.
Footnotes Hydro power Vattenfall will continue to keep its hydro
1
Statistics Sweden, SCB, Trade in Goods and Services, 6
The Royal Swedish Academy of Sciences Energy power growth options open
Foreign Trade Committee, About Hydro Power, 2009
2
You can read more about climate effects of land 7
IEA Statistics, op.cit.
inundation on IPCCs webpage, www.ipcc.ch 8
Read more about the Lysekil Wave Power Project at:
3
Read more about Vattenfalls environmental and fish http://www.el.angstrom.uu.se/forskningsprojekt/
conservation efforts in Vattenfalls 2009 CSR Report WavePower/Lysekilsprojektet_E.html
4
IEA Statistics, Electricity Generation, 2010,
www.iea.org
5
Ibid.

ONE ENERGY SYSTEM | 57

NATURAL GAS
Natural gas is a growing energy source within Europe that is economically
attractive and provides flexibility and security of supply. Natural gas is a
fossil fuel formed through the slow decomposition of biological matter over
millions of years. Natural gas deposits are formed where gas is trapped in
the Earths crust. It also has lower specific CO2 emissions than other fos-
sil fuels. Natural gas accounts for approximately 24 per cent of the EU s
electricity generation.

58 | SIX SOURCES OF ENERGY

ONE ENERGY SYSTEM | 59
NATURAL GAS

The Energy Triangle Natural Gas

Climate and environment

All energy sources have environmental impact during their life cycles. Combustion of
energy sources, particularly fossil fuels, generates CO2 emissions and contributes to
global warming. In the long run, emissions from power production will need to be close
to zero if greenhouse gas levels in the atmosphere are to be stabilised.

Combustion of natural gas emits CO2, though to a lesser extent than combus-
tion of other fossil fuels. Natural gas can thus be a transition fuel in the conver-
sion to a sustainable energy system. The role of natural gas as balancing power
will also be increasingly important as renewable energy sources with fluctuat-
ing production, such as solar and wind power, gain significance.

Security of supply Competitiveness

Fuel shortages and unreliable electricity systems cause
societal and economic problems. Securing supply means
guaranteeing that primary energy is available, and that
delivered energy is reliable, essentially 100 per cent of the
time. This is a major political and technical challenge.
Energy is a fundamental input to economic activity, and
thus to human welfare and progress. The costs of produc-
ing energy vary between different energy sources and
technologies. A competitive energy mix will keep overall
costs as low as possible given the available resources.

Natural gas allows a high degree of flexibility in electri- Natural gas is a more expensive energy source than
city generation, enabling it to function as balancing other fossil fuels and is subject to significant price
power. Supplies can be somewhat uncertain, and some variations. Natural gas will become more competitive
regions that export natural gas face political insta- as CO2 prices rise.
bility. The development of unconventional shale gas
may serve to decrease these uncertainties. Techno-
logical advances will allow a greater amount of natural
gas to be extracted with more efficient and inexpen-
sive methods, increasing security of supply.

60 | SIX SOURCES OF ENERGY

 NATURAL GAS

The History of Natural Gas

Natural gas a fossil energy source
Natural gas is a fossil energy source formed through the slow
decomposition of biological matter over millions of years. Natu-
ral gas deposits are formed where gas is trapped in the Earths
crust. For instance, gas can seep into and be trapped in porous
rocks such as sandstone, or a harder layer of rock may trap
the gas. Natural gas is formed under the same conditions as
oil and is therefore often found in the same places. The gas is
odourless and colourless, composed to approximately 90 per
cent of methane. It also contains carbon dioxide, nitrogen and
hydrocarbon. The actual composition varies depending on the
origin of the gas. The chemical formula for methane is CH4, i.e.,
a carbon atom bound by four hydrogen atoms. Methane is also
the main component of biogas, so there are no problems asso-
ciated with blending natural gas with biogas.
The first indications of natural gas use have been traced to
roughly 3,000 years ago in China, where gas was used for lamp
fuel. Bamboo was used to a certain extent for distribution. But
long before that, shallow natural gas sources were referred to in
stories and myths as eternally burning fires, often in relation to
religious or supernatural phenomena, in places such as Greece
and India. Legend has it that the Oracle of Delphi was located at
the site of just such a fire.
During the 17th century, discoveries in Great Britain, France,
Belgium and Germany proved that combustible gas could be
produced by heating coal, wood or peat. Combustible gas was
also discovered in coal mines during the 18th century, though it
wasnt until the close of the century that more direct application
fields were discovered.

Natural gas reserves (2009)

Europe &
North America Eurasia

Middle East

Asia & Pacific

Africa

Central &
South America

(Trillion cubic metres) Natural Gas

North America 9.16
Central & South America 8.06
Europe & Eurasia 63.09
Middle East 76.18
Asia & Pacific 16.24
Source: BP Statistical Review of World Energy, 2010
Africa 14.76

ONE ENERGY SYSTEM | 61

NATURAL GAS

In the 1870s, district heating began to spread throughout methods. With advanced technologies and expanded natural
North America (as well as South America, Europe, Asia and gas exploration, it is estimated that enough natural gas will be
Australia), though it would take some time before the construc- able to be extracted to meet demand for the next 100 years and
tion of distribution networks was commenced. At that time, gas more.3
was primarily used for lighting and also for internal combustion
engines, stoves and water heaters. The commercial use of gas Europes natural gas network
began in earnest after the Second World War. A few years later, In Europe, the expansion of distribution networks for dis-
in the 1960s, gas began to be used in Europe. trict heating was crucial for the growth of gas consumption.
District heating is a system for distributing heat generated in a
Extraction and deposits in the world centralised location, usually using water as medium. Wooden
Natural gas was traditionally viewed primarily as a by-product pipes were initially used for distribution, later replaced by pipes
of oil, and most of the currently known natural gas deposits have made of copper, lead, cast iron and steel. The district heating
been located while exploring for oil. Since gas has become more networks were later converted into a natural gas network.
attractive, for both climate and economic reasons, interest in Interest in natural gas as an energy source increased during
pure natural gas deposits has increased. the oil crisis in the 1970s, when import dependence became
Natural gas is extracted in several countries in the world. The problematic and self-sufficiency became more important. This
largest natural gas producers in 2008 were Russia, the US and resulted, among other things, in large-scale drilling for oil and
Iran.1 But Europe also has large natural gas deposits. Norway and gas in the North Sea.
Great Britain, for example, are large natural gas producers. The
discovery of natural gas near Groningen, Holland, in the 1950s European gas market reform
launched the expansion of Western Europes natural gas network. Natural gas systems are normally large-scale and can be
The discovery of natural gas via prospecting is accelerating considered natural mono-
even more rapidly, by global standards, than extraction. The IEA polies controlled by national
estimates that current known natural gas reserves and those governments. However, EU Interest in natural gas as an
that can be extracted with todays technology will be enough reforms in recent years energy source increased
to meet natural gas demand for several decades.2 Over half of aimed at creating a common
during the oil crisis in the
these resources are located in three countries: Russia, Iran and EU natural gas market have
Qatar. resulted in a freer gas mar- 1970s, when import depen-
Gas deposits are usually classified in two groups: conventional ket with fewer elements of dence became problematic
and unconventional. Gas in conventional deposits is of high government control and and self sufficiency became
quality and is relatively easy and inexpensive to extract. regulation within member more important.
Conventional deposits are often found in connection with oil states.
deposits. Only a small fraction of the worlds natural gas The first EU directive to
resources are found in conventional deposits, but it is from liberalise the natural gas markets was adopted in 1998 following
these deposits that the greatest amount of natural gas is years of discussions. Another major step in implementing a com-
extracted today. The majority of the worlds natural gas is found mon EU natural gas market was the gas market framework that
in unconventional deposits, where the gas is located in other came into effect on 1 July 2005. The market was fully opened as of
types of rock (e.g., shale or methane hydrate, a type of methane- 1 July 2007.4
bearing ice). The deregulations, which apply to the European energy
Unconventional deposits are typically more difficult and market as a whole, are aimed at guaranteeing access to energy
more expensive to exploit, though technology is advancing at a through integration and at producing long-term, profitable
rapid pace. Technological advances allow a greater amount of competitiveness on the energy markets.
natural gas to be extracted with more efficient and inexpensive

62 | SIX SOURCES OF ENERGY


The Natural Gas Value Chain
Application fields of natural gas
Natural gas is a versatile energy source. It is used in a variety of
industrial processes and is converted into industrial heat and
electricity. It is also used in households for heating and cook-
ing. Another application field, more prevalent in recent years, is
that of fuel. As demand grows for alternative fuels, compressed
natural gas and biogas are increasingly used as motor fuel.
The chemical industry in particular, and also the steel indus-
try, is a major consumer of natural gas. Gas is chiefly used to
produce heat for smelting, drying and similar processes. Since
natural gas emits very low levels of heavy metals, sulphur and
soot, it is kinder to the work environment and to power plants
and machinery than, for example, oil. Another advantage of
gas is that it is distributed through pipelines, which means that
industrial plants do not have to store the fuel at or near their
facilities or use expensive, environmentally harmful long-dis-
tance transports.
Overview of the natural gas value chain
Drilling rig
Processing Gas export
plant
Drilling rig
Liquefaction plant
Transport
NATURAL GAS
Natural gas extraction how it works
Natural gas is extracted both on land and offshore, either in con-
nection with oil extraction or from separate natural gas depo-
sits. In more recent deposits, the gas is often forced upward
out of the drill hole by natural pressure; in older deposits where
pressure has decreased, CO2 or water is often pumped down to
increase the pressure that forces the gas upward.
Extracted natural gas varies widely in terms of composi-
tion and quality, and must be processed before it can be used.
The process itself varies depending on the composition of the
extracted gas. Normally, water vapour, gases such as LPG and
propane, and other undesirable substances such as mercury
and hydrogen sulphide are separated off.
When it is not possible to use the natural gas that is extrac-
ted in connection with oil extraction the gas is burned off, or
flared. Before natural gas was used on a commercial basis,
virtually all of the natural gas extracted in connection with oil
Natural gas is extracted from oil fields or natural gas fields.
Before the gas can be used as a fuel, it must pass through a
processing plant where undesirable substances are removed.
After processing, the gas is transported in pipelines or turned
into liquid at a liquefaction plant and then transported by a
carrier before reaching its end-users.
Consumers
Regasification
Consumers
ONE ENERGY SYSTEM | 63
NATURAL GAS

extraction was flared, leading to significant carbon dioxide in the same way and in the same types of power plants and net-
emissions. Today, the goal is to capture all of the natural gas that works. Current expansion of the existing natural gas network
is extracted. will therefore facilitate a smooth transition to biogas as biogas
production is stepped up.
Transport and distribution of natural gas
Natural gas can be handled in two ways after it is pumped up out
of the bedrock. The least expensive, easiest and most common
way is to transport the gas in large pipelines. If the gas deposit
is too far away from the users, or if it is difficult to build a piping
system for other reasons, the gas is converted to liquid form,
LNG (Liquefied Natural Gas), and is then transported by tanker.
Natural gas is converted to LNG by compressing the gas and
chilling it down to minus 162C. One cubic metre of LNG cor-
responds to as much as 600 cubic metres of natural gas. The
process is relatively expensive and energy-intensive, and trans-
port via pipeline is therefore preferable wherever possible. LNG
is also utilised as a method of storing natural gas.
The gas is transported from extraction site to distribution
network via transmission lines. These pipelines are usually
around one metre in diameter and are placed along the ocean
floor, on land or buried underground. Pressure in the pipelines,
approximately 40-100 bars, transports the gas. LNG is trans-
ported by specially constructed tankers to ports that are linked
to the distribution networks. It is then heated at special heating Natural gas becomes electricity and heat
facilities and reconverted to gas form, so that it can be trans- Electricity generation is one of the primary application fields
ported via pipelines. As LNG technology facilitates transports for natural gas. Gas turbines and condensing power plants are
over long distances, it has the potential to connect markets the two most common methods. In a gas turbine, gas is igni-
that were formerly isolated and to diversify possible natural ted under pressure and combustible high-pressure, high-tem-
gas trade routes. Natural gas transported in pipelines is a fairly perature gases are produced. The combustible gases power a
regional product while LNG is an international commodity. As turbine, which in turn powers a generator. Often, the gases are
such, LNG technology has the potential to have a major impact then directed to a waste heat boiler, where the remaining heat
on the global market conditions for natural gas. and pressure can be used to produce more electricity and heat
When the gas is passed from seller to buyer, the volume is for, e.g., the district heating network.
measured and odour compounds are added to facilitate the In a condensing power plant, electricity is generated by
identification of any leaks. Finally, the gas is transported through heating water to produce steam which, via a turbine, powers
smaller pipelines to control centres where pressure is lowered a generator. Natural gas is one of the fuels used by condensing
and the gas is measured again before being transported to con- power plants; oil and coal are also used. Nuclear power plants
sumers. Pressure at this stage is approximately four bar, roughly are another type of condensing power plant.
the same amount of pressure as in an inflated bicycle tyre. If the Another significant application field for natural gas is district
gas is to be used by smaller consumers, the gas pressure is low- heat production. Natural gas is used as a fuel by district heat-
ered a bit more before it reaches private households. ing plants to heat the water that is used in the district heating
There is a risk of leakage during both the transport and the network.
use of natural gas, though risk is minimised by security devi- Combined heat and power (CHP) systems are finding appli-
ces. Pipelines are buried, and no buildings are permitted within a cations in commercial, industrial, and even residential settings.
certain safety area. Historically, there have been very few acci- CHP utilises more of the energy contained in natural gas than
dents involving natural gas. does a simple gas turbine, thereby improving energy efficien-
Natural gas and biogas are both composed primarily of meth- cy and requiring less energy to start with. CHP also emits less,
ane and are very similar in nature; the difference between them since less natural gas is used.
is in how they are produced. Natural gas and biogas can be used

64 | SIX SOURCES OF ENERGY

 NATURAL GAS

Natural Gas in Europe

In 2008, natural gas accounted for approximately 24 per cent of
the EUs electricity generation, as compared to 21 per cent glo-
bally.5 The EU is a net importer of natural gas. Fifty-five per cent
is produced within the EU; the rest is imported, chiefly from Rus-
sia and Algeria. Europes largest natural gas producers (exclud-
ing Russia) are Norway, the United Kingdom and the Nether-
lands, countries with the most natural gas resources.6
There are large differences in the amount of gas consumed
per country in Europe. The main European markets are Germa-
ny, the UK and Italy (an aggregate 50 per cent of EU gas con-
sumption), followed by the Netherlands, Spain and France. The
share of natural gas in each of the above countrys energy mix
is significant.7
The environmental and practical qualities of natural gas as
compared to other fossil fuels, coupled with limitations on how
swiftly the share of renewable energy can be increased, basi-
cally indicate that demand for natural gas will rise in Europe
and throughout the world. The major forces driving continued
demand are economic trends and oil prices in the short term
and political regulations in the medium to long term.
to grow. Today, more or less all of Europe is connected to a com-
Share of natural gas in electricity generation (2008) mon distribution system. Several countries have multiple supply
% points and are interconnected. Imports to Europe are currently
60 made almost exclusively through these pipelines. More LNG
55 reception terminals will most likely be established as demand
50
for LNG increases.
45
40
Continued import dependence in Europe
35
In the present situation, intra-European resources are being uti-
30
lised at near maximum levels. Domestic European gas extrac-
25
tion (excluding Russia) is steadily declining. The fastest grow-
20
15
ing application field for natural gas in the EU is the combined
10 generation of power and heat in CHP plants. To merely main-
5 tain current consumption levels, the EU will have to increase its
0 natural gas imports. Declining gas fields, especially in Great Brit-
n Denmark 19% n Netherlands 59% n Sweden 0% ain, mean that new supply systems, new contracts and new gas
n France 4% n Poland 2% n UK 45%
fields are needed right away. The EU has adopted regulations
n Germany 14% n Spain 39% n Finland 15%
that will strengthen the co-ordination between member states
Source: IEA Statistics, Electricity Generation, 2010 to prevent and mitigate the effects of gas supply disruptions.
Several countries in Eastern Europe are currently dependent
In Europe as in the rest of the world, natural gas is chiefly on imports from Russia. Other options will eventually emerge,
used for heat and electricity generation, industry and (increas- most likely in areas such as Central Asia and the Caspian region
ingly over the past few years) as motor fuel. Consumption is in particular, as well as in the Middle East and North Africa.8 Not
highest in Central Europe, where networks are more developed only is it crucial to identify new areas for natural gas extraction,
than they are, for example, in Scandinavia. Europes natural gas it is also important to diversify supply routes in terms of new
network has expanded dramatically since 1970 and continues pipelines and LNG grading facilities.

ONE ENERGY SYSTEM | 65

NATURAL GAS
The Future of Natural Gas
It is generally considered that natural gas will be an important
energy source in the future, chiefly due to its relative environ-
mental advantages over coal and oil and its ability to serve as
balancing power. Even today, natural gas constitutes over one-
fifth of the worlds energy supply.9
Demand for natural gas is closely linked to the pace of glo-
bal economic growth and is driven primarily by the power indus-
try; when the worlds economies grow, the need for natural gas
increases. Demand for natural gas is also impacted by the price
of gas relative to oil and coal, as well as by regulations. In many
countries, natural gas is seen as an alternative to coal and oil,
chiefly for environmental reasons. This also applies to countries
looking to phase out nuclear power for political reasons.
In 2007, the global energy demand for natural gas was
approximately 2,500 MTOE. This amount is expected to increase
to roughly 3,600 MTOE by the year 2030, representing an annual
growth rate of 1.5 per cent. Over 80 per cent of the growth is
expected to occur in countries that are not OECD members.10
A fossil gas with future potential
Natural gas is a fossil energy source that produces carbon
dio-xide when combusted. But emissions from natural gas are
significantly lower than emissions from other fossil fuels. This is
due to natural gass low coal and high hydrogen content, which
means that CO2 emissions are relatively low in relation to the
amount of energy extracted. Furthermore, the fact that natu-
ral gas can be used more efficiently than oil and coal reduces
total fuel use and hence emissions. In addition, the combustion
of natural gas emits basically no sulphur or heavy metals.
One future possibility is to increase the blend of biogas. Biogas
is a renewable gas, and the CO2 that is produced during combus-
tion is a natural part of the cycle. An increased blend of biogas
would therefore reduce carbon dioxide emissions. Biogas blend-
ing is currently limited but is expected to increase in future. In the
long term, hydrogen gas may also be blended with natural gas in
order to further reduce carbon dioxide emissions.
Natural gas technology under constant development
The 1980s saw considerable technological development in the
building of offshore pipelines, which made the development of
LNG (Liquefied Natural Gas) stand out as expensive. However,
LNG technology was developed during the 1990s and capital
outlays for liquefaction and gasification could be cut back. It
was primarily costs for large-scale plants that fell during this
period, although technology for small-scale LNG processing
also began to be competitive.
66 | SIX SOURCES OF ENERGY
Trade in LNG has in- It is generally considered that
creased substantially over
natural gas will be an important
the past decade and con-
tinues to increase consider-
energy sources in the future,
ably faster than trade in gas chiefly due to its relative envi-
transported in conventional ronmental advantages over
pipelines. This trend will con- coal and oil and its ability to
tinue for the foreseeable
serve as balancing power.
future. The choice of LNG is
not only a question of cost; in
many cases, it is the only alternative that enables exploitation
and export or import of gas.11
Technological advances in extraction (e.g., horizontal wells
and natural gas transport) have rendered extraction of large
unconventional deposits possible in recent years, and the pro-
duction potential is substantial. Unconventional gas deposits
are beginning to constitute an increasingly large share of total
world supply: in 2008, unconventional gas comprised approxi-
mately 12 per cent of global production and over 50 per cent of
US production.12
Technological advances in the natural gas area also affect
the manufacture of CNG (Compressed Natural Gas) used as
fuel. On a global level, the share of natural gas used as motor
fuel in the transport sector is negligible, despite the fact that
the technology is relatively well-established in several coun-
tries.
Flue gas is produced when natural gas is combusted to ge-
nerate electricity and heat. This gas must be cleaned before it is
emitted into the atmosphere. This is done through well-developed
techniques such as flue gas washing and particulate filters.
Large variations in price
The costs associated with extracting natural gas vary dramati-
cally between different types of deposits and different natural
gas fields. The price of natural gas also varies greatly depend-
ing on how far it needs to be transported. Today, it is more
expensive to produce electricity with natural gas than with, for
example, nuclear or coal power. Natural gas-fired power plants
have relatively low capital costs (its inexpensive to construct
gas power plants) and low maintenance costs. Its the fuel itself,
the gas, thats expensive. And the cost of fuel constitutes such
a large proportion of the total cost of producing electricity with
natural gas that electricity generation becomes sensitive to
gas price fluctuations.
Taxes, fees and emission rights are other factors that impact
the price of electricity produced by natural gas. If it becomes

In 1998, the Delhi government introduced the use of compressed
natural gas (CNG) or liquefied petroleum gas (LPG) fuel for all local
mini taxis also known as rickshaws in New Delhi. As a result of
this initiative, the citys air quality has improved.
more expensive to emit CO2, power production with natural gas
also becomes more expensive since gas is a fossil fuel. On the
other hand, price increases for coal and oil are even more pro-
nounced. Natural gas thus becomes more expensive relative to
renewable energy sources, but less expensive relative to other
fossil fuels. It is therefore difficult to predict how natural gas
demand is impacted by the cost of CO2 emissions.
Natural gas competes with various other energy sources in
different areas of the world and depending on field of applica-
tion. In terms of electricity generation, natural gas competes
primarily with coal, oil and nuclear power. Within industry, gas
competes chiefly with oil, coal and electricity. In households,
gass main competitors are oil and electricity. Gas power plants
are relatively simple to run, technological risks are minor, and
production lead times are short. Combined with low investment
costs, this means that gas-fired power plants are an economi-
cal alternative if gas prices arent too high.
The development of public opinion and policy
Natural gas is not as central to public opinion on energy and the
environment as, for example, nuclear power. But public opinion
on natural gas has one thing in common with nuclear power:
the countries that use it in great quantities are more positive
NATURAL GAS
towards it, and vice versa. Proponents argue that natural gas
can function as a bridge to entirely fossil-free power genera-
tion; its high efficiency levels mean increased energy efficien-
cy, and it emits less CO2. Opponents argue that natural gas is
nonetheless a fossil gas and that an expansion of natural gas
distribution would risk pulling the rug out from under renewable
sources of energy such as wind power.
Meanwhile, the political situation in Europe is tense. The
Ukraine-Russia conflict is an indication of this, and also serves
to expose the EUs energy vulnerability. The conflict began in
2005 when Russia cut off its gas deliveries to Ukraine. Rus-
sia was accused of disproportionately raising the price of gas
while Gazprom, a Russian state-run energy company, accused
Ukraine of stealing gas. The gas conflict between the two coun-
tries has been recurrent since then.
Although there are opportunities for the EU to increase its
imports from North Africa and Central Asia, it is difficult for indi-
vidual countries to achieve greater diversification on their own.
This is one of the driving forces behind the EUs common energy
policy.
ONE ENERGY SYSTEM | 67
NATURAL GAS

Vattenfall and Natural Gas

Natural gas is a growing energy source within Europe that is economically attractive and provides flexibility
and security of supply. It also has lower specific CO2 emissions than other fossil fuels. Natural gas is a new
energy source for Vattenfall, provides increased security of supply and gives Vattenfall a more balanced
portfolio that better reflects the European energy mix.

Vattenfalls natural gas operations
Natural gas can play a crucial role in efforts to reduce CO2 emis-
sions. Vattenfall is active in all parts of the gas value chain, from
gas extraction to storage, trade and delivery to end consumers.
Natural gas currently accounts for a relatively small proportion
of Vattenfalls total electricity generation, which comes prima-
rily from the acquisition of the Dutch energy company Nuon.
Through the acquisition of Nuon, Vattenfall established a signi-
ficant position across the gas value chain in Northwest Europe.
In 2009, Vattenfall produced 9 TWh of electricity and 6.3 TWh
of heat using natural gas. For a full list of Vattenfalls natural gas
power plants, please see the production site at www.vattenfall.
com/powerplants.
Vattenfalls natural gas operations going forward
Gas-fired power is a bridging fuel to a sustainable energy sys-
tem. As CO2 prices increase, natural gas will become increasingly
attractive and competitive relative to, for instance, coal-fired
power plants. Vattenfalls natural gas investments are crucial as
the energy source is a transitional fuel in the shift to low-emitting
technologies. Although natural gas accounts for a relatively small
portion of Vattenfalls energy mix, it is a priority investment area
over the next few years. Nearly 20 per cent of Vattenfalls invest-
ment programme (approximately SEK 40 billion) will be focused
on natural gas during this period. The investments deal primarily
with operations in the Netherlands, and will increase generation
capacity and strengthen security of supply.

Diemen gas power plant outside Amsterdam in the Netherlands.

68 | SIX SOURCES OF ENERGY

 NATURAL GAS

SUMMARY
g ;95:2:18::2510518960;98
the slow decomposition of biological mat-
Toward a climate neutral energy supply ter over millions of years
Vattenfall pursues ongoing efforts to switch over to low-emitting energy sources
g ;95:2:98=270709?:89027
such as nuclear power and various renewable energy sources. At the same time Europe that is economically attractive and
many of Vattenfalls markets, such as Germany, Poland and the Netherlands, cur- provides flexibility and security of supply.
rently rely heavily on fossil fuels for their energy supply. In pace with technological The flexibility of natural gas makes it suit-
advances, these sources will be replaced with renewable fuels. But it is impossible to able to use as balancing power
achieve change of this magnitude overnight. Lead times in the energy industry are g ;95:2:0>;9;027:0<09587;920:
long and it simply takes time to build new power plants, fuel delivery systems, secu- in the world. The largest natural gas produ-
rity devices and everything else needed to produce heat and electricity. cers in 2008 were Russia, the US and Iran.
In order to maintain a secure energy supply at reasonable prices, we need tran- Norway, Great Britain and the Netherlands
sitional solutions that reduce emissions to the greatest extent possible without are also large natural gas producers
affecting security of supply or competitiveness in the energy system. Natural gas g ;95:2:<09:;2500709?:890;
can play a significant role as a transitional solution. Since it is efficient, safe and is used in a variety of industrial processes
just as easy to use as other fossil fuels, while emitting fewer greenhouse gases and and is converted into heat and electricity. It
heavy metals, an increased use of natural gas is one way to reduce CO2 emissions is also used in households for heating and
while maintaining a stable energy supply at a reasonable price. Another important cooking. Fuel is another application field
aspect of natural gas is its flexibility, which makes it suitable to use as balancing g ;95:7/28:90/8;868:0
power. Electricity generation using natural gas is easy to ramp up and down to bal- primarily of methane and are very similar in
ance intermittent electricity generation from energy sources such as wind power nature. Natural gas and biogas can be used
and solar power, an aspect that will be increasingly important as these energy in the same way and in the same types of
sources gain significance. power plants and networks
g 77;95:87;018998>-
imately 24 per cent of the EU s electricity
generation mix, compared to 21 per cent
globally
g 860:;2 9807 : 0>;9;287 2:
steadily declining. The EU will have to
increase its natural gas imports merely to
maintain current consumption levels
g ;95:9907;5?87;:189905-
tively small portion of Vattenfalls energy
mix but is a priority area for investment
over the next few years

Footnotes Natural gas

1
International Energy Agency (IEA), World Energy 7
Ibid.
Outlook 2009 8
You can read more on Europes Energy Portal,
2
Ibid. www.energy.eu
3
Ibid. 9
IEA, 2010, op. cit.
4
Haase, N. (2008), European Gas Market Liberalisation: 10
IEA, 2009, op. cit.
are regulatory regimes moving towards convergence?, 11
Coyle et al. (2003), LNG : A Proven Stranded Gas
Oxford Institute for Energy Studies Monetization Option, Society of Petroleum Engineers
5
IEA, World Energy Outlook 2010 12
IEA, 2009, op. cit.
6
IEA, 2009, op. cit.

ONE ENERGY SYSTEM | 69

NUCLEAR POWER
Nuclear power plays a vital role in many European countries due to its economic attractive-
ness, security of supply and low CO2 emissions. In the reactor of a nuclear power plant, energy
is derived from splitting atomic nuclei, a process called fission. There are 143 nuclear reactors
operating in the EU, with another four under construction. In total, these power plants account
for approximately 28 per cent of the EUs electricity generation.

70 | SIX
SIX FORMS
SOURCES
OF OF ENERGY
ENERGY
ONE ENERGY SYSTEM | 71
NUCLEAR POWER

The Energy Triangle Nuclear Power

Climate and environment

All energy sources have environmental impact during their life cycles. Combustion
of energy sources, particularly fossil fuels, generates CO2 emissions and contributes
to global warming. In the long run, emissions from power production will need to be
close to zero if greenhouse gas levels in the atmosphere are to be stabilised.

Nuclear power emits low levels of CO2 across the life cycle. The management
of spent, highly radioactive nuclear fuel requires storage in secure facilities for
up to 100,000 years. Uranium mining interferes with nature, though damage to
the landscape is repaired after mining is completed.

Security of supply Competitiveness

Fuel shortages and unreliable electricity systems cause
societal and economic problems. Securing supply means
guaranteeing that primary energy is available, and that
delivered energy is reliable, essentially 100 per cent of the
time. This is a major political and technical challenge.
Energy is a fundamental input to economic activity, and
thus to human welfare and progress. The costs of produc-
ing energy vary between different energy sources and
technologies. A competitive energy mix will keep overall
costs as low as possible given the available resources.

Nuclear power provides stable and large-scale elec-
tricity generation, and fuel availability is stable. Ura-
nium, used as fuel in the reactor, is commonly found
in nature and is geographically distributed. Reactors
must be taken offline periodically for refuelling and
the performance of maintenance required by high
safety standards. These outages may be prolonged
if significant modernisation work is required, but this
can be planned well in advance.
Nuclear power is a cost-competitive energy source,
with relatively low costs for fuel, operation and main-
tenance. The construction of a new nuclear power
plant requires major investments, but these invest-
ments are recovered through the plants large pro-
duction volumes and long useful life.

72 | SIX SOURCES OF ENERGY


The History of Nuclear Power
The worlds first nuclear power plant for commercial electri-
city generation, Calder Hall in Sellafield, Great Britain, was com-
pleted in 1956 and produced electricity as well as plutonium for
defence purposes. The inauguration of the power plant marked
the beginning of the utilisation of nuclear technology for large-
scale electricity generation. The technological evolution, how-
ever, had begun much earlier.
One of the most significant discoveries that would underpin
our knowledge of nuclear energy occurred in 1905, when Albert
Einsteins theory of relativity described the way mass is convert-
ed into energy. The French physicist Henri Becquerel had made
another important discovery, radioactivity, a decade earlier.
Progress took off during the 1920s and 30s thanks to a
number of discoveries and experiments. Atomic structure was
identified and the first nuclear fission was confirmed by scien-
tists Niels Bohr and Enrico Fermi. A few years later, in 1942, the
first research reactor was put into operation in Chicago in a
project led by Fermi.
Massive nuclear expansion in the 1960s and 1970s
The development of nuclear power proceeded for a long time
in parallel with the development of nuclear weapons. Many of
Calder Hall in the UK was the worlds first nuclear power plant for large-scale electricity generation. It was completed in 1956.
NUCLEAR POWER
the major nuclear power countries of the day, such as the UK,
the USA and the Soviet Union, intensified their nuclear research
during World War II, for nuclear armament purposes. Interest in
nuclear weapon development waned after WW2 and the Nuc-
lear Non-Proliferation Treaty came into effect on March 1970. The
treaty prohibits the spread and development of nuclear weapon
technology. The focus at the time had largely shifted towards the
development of nuclear power for peaceful purposes.
From 1960 through the late 1970s, the worlds nuclear capacity
grew from barely 1 GW to over 100 GW. Today, global installed
nuclear capacity is approximately 391 GW.1 Reasons behind this
massive nuclear expansion were the growth of electricity con-
sumption due to industrial development and a political desire to
move away from oil dependency following the oil crisis of the
1970s. During the second half of the 20th century, nuclear power
produced a stable supply of economically competitive electricity
with low levels of CO2 emissions and formed the basis of the electri-
city supply for many countries.
Nuclear accidents impacted public opinion
Public opinion in the western world grew more critical of nuclear
power in the mid 1970s. There was a fear of accidents and an
ONE ENERGY SYSTEM | 73
NUCLEAR POWER

uncertainty as to the handling of radioactive waste. The spirit Comprehensive safety developments
of the times also made nuclear power a symbol of growth and Nuclear power plant safety has been an important element of
consumption which was rejected by people of many different nuclear power development; todays safety systems are the
political affiliations. Nuclear powers link to nuclear weapons result of long, intensive research. These results include safety
was also detrimental to its image. routines for nuclear power plants employees, the development
Criticism was heightened on 28 March 1979, when the Three of new, more durable, materials that encapsulate the fuel pel-
Mile Island nuclear power plant near Harrisburg, Pennsylvania lets in the reactor and improvements to the systems that pre-
in the USA suffered a series of technical errors which resulted vent or mitigate accidents.
in a partial meltdown. One reactor was destroyed, but no radio- Safety development applies both to operating plants, which
active material leaked out and no people were injured. Even so, have been improved through investment programmes, and
the accident had a major impact on the public debate and policy plants under construction which include safety features in the
development, and was the direct cause of the 23 March 1980 original design. Significant improvements have also been intro-
referendum in Sweden on the future of nuclear power. duced to plant security; i.e., protection against malevolent acts.
A serious nuclear accident occurred at Chernobyl in northern Major improvements have also taken place in education,
Ukraine in 1986. The accident was the result of a poorly planned training, preparation and international co-operation. The UNs
and executed experiment in combination with several technical International Atomic Energy Agency (IAEA) was founded in
errors and disconnected emergency systems. The reactor in which 1957 for the purpose of strengthening and developing nuclear
the accident occurred was of a special design that was only used power safety through the transfer of information and expe-
in the former Soviet Union. The uranium fuel became overheated rience between nuclear power countries. Different types of
and melted, the surrounding graphite ignited and large portions of national safety authorities have been created, and safety provi-
the power plant exploded due to the heat and the reaction between sions for nuclear power plants are very advanced today.
graphite and steam. The ensuing fire lasted for one week, and radio-
active material spread over large parts of Europe. One reason for
such a wide spread of radioactivity was that the Chernobyl reactor
did not have a leak-proof containment structure surrounding the
reactor, something that all existing power plants have today.
Thirty people were immediately killed in the accident and 134
people received acute radiation injuries. Increased incidents
of thyroid cancer have been discovered in nearby areas in the
former Soviet Union and have been linked to the Chernobyl acci-
dent. Pressure around the world to phase out nuclear power
increased after the accident, and Italy had closed down all of its
four reactors by 1990.2
Conclusions based on both the Three Mile Island and Cher-
nobyl accidents have resulted in additional safety improve-
ments in operating nuclear power plants.
Public attitudes to nuclear power have become more positive
in recent years and several countries have decided to replace
old reactors or expand nuclear power capacity. The positive
public opinion trend is similar across Europe, though there are
distinct differences in the level of public support for nuclear
power between countries. In general, opinion is more positive
in countries that have their own nuclear power plants, such as
Sweden, Finland and France. In September 2010, the German
government agreed to repeal the parliamentary resolution that
called for the phase-out of nuclear power in Germany by 2025.

74 | SIX SOURCES OF ENERGY


How a Nuclear Power Plant Works
In the reactor of a nuclear power plant, energy is derived from
splitting atomic nuclei. Splitting an atomic nucleus, a process
called fission, generates heat. This heat is used to heat water
into steam that powers a turbine, which in turn powers a gene-
rator that produces electricity. A nuclear power plant often
consists of several reactors located in separate buildings. Each
has its own turbine and generator. There are several different
types of nuclear reactors, the most common of which are the
pressurised water reactor and the boiling water reactor.
Splitting an atomic nucleus
The actual nuclear fission process occurs in the reactor core.
The nuclear fission process is based on splitting the atomic
nuclei of uranium by bombarding them with neutrons. When an
atomic nucleus is split, it sends out new neutrons that can split
new atomic nuclei, creating a chain reaction. A nuclear power
plant typically uses uranium-235, a special isotope of the ele-
ment uranium, as fuel. In order to control the process, various
types of control rods are used to absorb the discharged neu-
trons, reducing the fission rate or stopping it entirely.
Radioactive materials transmit different types of radiation
that can be dangerous to humans and to nature. The fission
process creates extremely high doses of dangerous radiation.
Four safety barriers
Fuel rods
Reactor
containment
Fuel
Reactor vessel
Human
(for size
Reactor building
comparison)
The safety barriers prevent leakage of radioactive material from the plant in
the event of an accident or malevolent act. The fuel, in the form of small pellets,
is packed inside sealed zirconium alloy tubes to form fuel rods. The fuel rods
are placed in a reactor vessel of 15 to 20 centimetre-thick steel and the reactor
vessel is placed in a special building, the containment, built of metre-thick
concrete and gas-tight metal. Outside the containment, there is a reactor
building that serves as an additional barrier against the release of radioactivity.
NUCLEAR
WIND POWER
To prevent this radiation from escaping, the reactor core is sur-
rounded by several independent barriers. The fuel, in the form
of small pellets, is packed inside sealed zirconium alloy tubes to
form fuel rods. The fuel rods are placed in a reactor vessel of 15
to 20 centimetre-thick steel and the reactor vessel is placed in a
special building, the containment, built of metre-thick concrete
and gas-tight metal. The containment is constructed to be leak-
proof even if severe accidents occur. Outside the containment, a
reactor building houses equipment that is needed to operate the
plant. In many cases, the reactor building itself serves as an addi-
tional barrier against the release of radioactivity. Safety systems
are available to protect the barriers from failing. There are multi-
ple redundant systems to assure safety in the event one or more
of the safety systems fail to work when called upon.
From uranium mine to nuclear fuel
The uranium used as fuel in a nuclear reactor is extracted from
uranium ore. Uranium is a silvery metal, the heaviest of all the
elements that exist naturally on Earth. Uranium is found in large
quantities in the Earths crust, though only in very low concen-
trations. Concentrations are also relatively low in places where
uranium ore is mined. Consequently, mining is often done in
large quarries. Uranium ore is mined principally in Australia and
Canada, but also in places such as Kazakhstan and Namibia.
Uranium mining is the part of the nuclear life cycle that has the
most environmental impact.
After uranium ore is mined, the uranium is extracted through
various chemical processes. The uranium is then enriched (from
the 0.7 per cent of natural uranium to up to five per cent) into ura-
nium-235, the isotope that can be split by neutrons. During the
continued process a colourless crystal (uranium hexafluoride) is
produced, which is then converted into a powder (uranium oxide)
and pressed into pellets. This enriched uranium is then packed
into long metal tubes of zirconium or stainless steel and assem-
bled to form the fuel element used in nuclear power plants. Before
the fuel elements are used, they emit very low levels of radiation
and can be handled without special safety equipment.
Waste management from reactor to terminal storage
Radioactive waste arises throughout the nuclear process, from
the mining of uranium to the demolition of reactors. The waste
is normally divided into three categories: operational waste,
demolition waste and spent nuclear fuel. Waste is also classified
according to its level of radioactivity and whether it is short- or long-
lived. This determines the way in which the waste is managed.
Operating waste accounts for roughly 85 per cent of all
ONE ENERGY SYSTEM | 75
NUCLEAR POWER
nuclear waste. Most consists of low- or medium-active waste
such as used protective clothing, mechanical equipment that
may have been contaminated, and filters. Some of this waste
is so safe that it can be treated as ordinary waste after being
sorted and washed. Medium-active waste must be isolated for
about five hundred years before it is no longer considered ha-
zardous. During this time it must be radiation-shielded, which
is done by sealing it in steel or concrete containers which are
stored in rock shelters or under the sea bed.
Demolition waste consists of metal and concrete residue
from the demolition of a nuclear power plant. Most is low- and
medium-active waste but some, such as structures that have
been close to the core and other components of the core, is
long-lived and must be isolated for thousands of years.
The spent nuclear fuel, which is highly radioactive, accounts
for 99 per cent of the radiation but only around five per cent of
the total volume of nuclear waste. Several metres of water or
several decimetres of steel are needed to contain the nucle-
Pressurised water reactor
Pressure
vessel
Reactor
Fuel element
(uranium)
The reactor contains uranium and water. When the uranium atoms are split, the
energy released heats the water to 325C. The high pressure within the reac-
tor, regulated by the pressurisation vessel, prevents the water from boiling.
The hot water from the reactor transfers heat to the water circuit of the steam
generator. Steam is formed here, since the pressure is lower. Pressure from
the steam causes the turbine blades to rotate. The turbine powers the electric
generator which generates electricity. The steam is then conducted to a con-
denser composed of many small tubes. Sea water is pumped through the tubes,
76 | SIX SOURCES OF ENERGY
ar fuel radiation. Since the half-life (the time it takes for radi-
oactive material to lose half of its radioactivity) of high-active
waste is often very long, the waste must be isolated for at least
100,000 years.
Before the high-active spent nuclear fuel is isolated it is
treated to make it less radioactive. To reduce radioactivity and
make the fuel easier to manage, it is brought to interim storage
facilities. There it is stored in deep water reservoirs for thirty to
fifty years, until approximately 90 per cent of the radiation has
dissipated. After that, it is ready for terminal storage.
In many countries, the main solution for isolating spent nucle-
ar fuel is geologic terminal storage. With this method, the fuel is
encased in various types of protective material such as cop-
per-clad cast iron. These capsules are then stored, surrounded
by clay, in vaults or tunnels drilled 400 to 1,000 metres under-
ground. This type of terminal storage is being built in several
areas but is not yet operational for use.
Electrical
generator
Steam
generator Turbine
Condenser
Sea water
and when the steam meets the cold tubes it is chilled and condensed (i.e., it is
reconverted to water). The sea water is then pumped back into the sea and is
10C warmer than when it entered the condenser.
The water is pumped back from the steam generators into the reactor to be
reheated and begin a new cycle. The water in the reactor thus circulates in a
closed cycle, so neither the steam generators water circuit nor the cooling sea
water come in contact with water from the reactor.
 NUCLEAR
WIND POWER

Nuclear Power in Europe

After decades of negative public opinion and political opposi-
tion, investments in nuclear power have regained momentum
in several European countries. The possibility of producing a
secure supply of electricity on a large scale, without emitting
large amounts of CO2, has led more and more people to recon-
sider nuclear energys prospects.
Nuclear power a crucial part of EUs electricity generation
In 2010, there were 143 nuclear reactors operating in the EU, with
another four under construction.3 In total, these power plants
represent an installed capacity of 135 GW and account for over
28 per cent of the EUs electricity generation.4 According to the
International Energy Association (IEA), the rate of expansion
for nuclear reactors is expected to increase as more countries
review their previous decisions to phase out nuclear power.
In global terms the US has the largest nuclear power indus-
try, with 104 reactors in operation and one under construction.5
The US alone accounts for 31 per cent of the annual amount of
nuclear-produced electricity in the world.6 Japan, too, has a sig-
nificant nuclear power industry, with 55 reactors in operation
and another two under construction.7
ly large share of old reactors that will be closed by 2023 accord-
ing to present plans. It plans to put a number of new reactors
into operation by 2020.12
Italy currently has no reactors in operation following the
shut-down of its four reactors pursuant to the post-Chernobyl
referendum. But in 2009 Italy initiated collaboration with France
to expand Italian nuclear power once again. Options for con-
structing four new reactors are being explored, and plans are in
place to begin construction of the first new reactor in 2013. The
long-term plan is to build between eight and ten new reactors,
the first of which is expected to be operational in 2020.13
In Germany, prevailing law prohibits new investments in
nuclear plants and requires the phasing-out of existing capa-
city by the year 2025. All reactors built in East Germany prior to
reunification have also been closed down for security reasons.
But in September 2010 the governments centre-right coalition
agreed to repeal this law.
The prospects for nuclear power have changed in Sweden
as well. The Swedish Parliament passed a bill in the summer of
2010 that lifted the ban on constructing new reactors.

Major differences between European countries

The EU accounts for roughly one-third of the worlds annual
Share of nuclear power in electricity generation (2008)
nuclear-based electricity generation,8 but the significance of
nuclear powers role varies widely among European countries. %
80
Several countries have no nuclear power at all, while France,
for example, has 58 reactors in operation9 and produces three-
70
quarters of its total electricity generation in nuclear power
plants.10 Frances extensive nuclear power expansion has posi-
60
tioned it as a leader in the development of nuclear technology.11

50
Nuclear power on the rise
During the 1980s, several countries decided to introduce a
40
ban on the construction of new nuclear power plants and to
phase out existing reactors. But views on nuclear power have
30
changed, and discussions on new nuclear projects have com-
menced in several European countries.
20
In 2002, Finlands Parliament gave the green light to the
construction of a new nuclear reactor at the existing Olkiluoto
10
power plant. This decision marked a turning point in the trend
that has characterised energy development in Europe in recent
0
decades. After Finlands decision, several other European coun-
n Denmark 0% n Netherlands 4% n Sweden 43%
tries, including Great Britain, Poland and Italy, started planning n France 76% n Poland 0% n UK 13%
the construction of new reactors. n Germany 23% n Spain 19% n Finland 30%
Great Britain was the first country to use nuclear power for
large-scale electricity generation and it currently has a relative- Source: IEA Statistics, Electricity Generation, 2010

ONE ENERGY SYSTEM | 77

NUCLEAR POWER

Constructing a Nuclear Power Plant

The design of a new nuclear power plant takes the entire value plant shouldnt be located too far from end-users, since much
chain into account, from uranium mining to terminal storage of electricity is lost in long-distance transports.
radioactive waste. Several factors guide the planning of a nuclear
power project; for example, geographic location, acceptance Availability of nuclear power plant designs
of local residents, extensive authorisation processes, long con- There are many modern nuclear power plant designs available
struction period, availability of skilled engineers and manage- today, most of which have been applied in new build projects
ment and storage of radioactive waste. A long-term process is and some of which are in operation. Several of these designs
highly dependent on a stable planning and decision process, as have been subject to review by one or more licensing bodies. Ne-
well as on a regulatory framework. There are also significant vertheless, experience in building new nuclear plants in Europe
financial challenges. in recent years is not extensive, and this poses additional risks
in terms of failing to meet time schedules and thus potentially
The financial conditions of nuclear power increasing the cost of new builds. This uncertainty, though, is
It is relatively inexpensive to produce electricity with a well- being gradually reduced as new plants are built. Design stan-
designed nuclear power plant. Fuel, operational and mainte- dardisation is one method of reducing the time it takes to learn
nance costs are significantly lower for nuclear power than for, how to construct new plants, and has been adopted by all plant
e.g., coal power. The predominant portion of a nuclear power suppliers.
plants costs is comprised of capital costs.
Constructing a new reactor requires a substantial invest-
ment, but the useful life of a reactor is long. The life cycle of a
nuclear power plant, from construction through close-down, is
between 80 and 90 years. This period includes a 10 to 15 year
start-up period preceding the plant being put into operation.
The effective operational time (i.e., the time the nuclear power
plant produces electricity) is roughly half as long as the full life
cycle, between 40 and 60 years. A significant investment is
required from the investors involved in financing the project.
The large initial investment costs are recovered after 20 to
25 years. Additional investments for safety and modernisation
may be required; in general, though, low operating costs and
a long operating life make nuclear power plants a profitable
investment.
The long-term nature of the project increases the risk that
uncertainties may accumulate and present obstacles to com-
pleting the project. Significant effort is therefore required early
in the project to identify and manage uncertainties and risks.
These include supply chain capability to deliver to and construct
the plant, applicable regulatory requirements, project financing
terms and conditions, and future electricity price trends.

Planning site selection

Numerous factors are considered when selecting a site for a
nuclear power plant. Requirements include large physical areas
for reactors, interim storage and assembly facilities for the con-
struction phase, cooling equipment, transportation and com-
munication facilities, etc. Many reactors rely on proximity to the
coast to draw sea water used to cool the condenser. And the

78 | SIX SOURCES OF ENERGY

 NUCLEAR POWER

Constructing a new reactor Due to the renewed inte- Storage of spent nuclear fuel
rest in nuclear power plant The long-term management of radioactive waste is a key issue
requires a substantial invest-
construction, deliver times in the planning of new nuclear plants. Spent nuclear fuel and
ment, but the useful life of a are long for some of the radioactive waste are handled at the nuclear power plants and
reactor is long. The life cycle of large components that by specialist organisations tasked with providing longer-term
a nuclear power plant, from are difficult and time-con- interim storage and deploying and operating final repositories.
construction through close-down, suming to manufacture; The internationally preferred option is a geological repository
for example, reactor pres- located several hundred metres underground. Sweden, Fin-
is between 80 and 90 years.
sure vessels. This problem land and France are leading the way in the development of and
can be solved by ordering licensing processes for this type of final repository, which will
such components early. allow the industry to meet long-term safety requirements that
Also essential to nuclear power projects is the availability of may exceed 100,000 years. Costs incurred by waste manage-
skilled personnel and the expertise to install and operate the ment as well as for future decommissioning of nuclear power
reactor. Experienced project managers and skilled welders are plants are included in financial and operational calculations.
needed during the construction phase and specialised engi-
neers and technicians are needed for operation and mainte-
nance.

ONE ENERGY SYSTEM | 79

NUCLEAR POWER
The Future of Nuclear Power
Energy systems of the future will require energy sources that
can produce large amounts of electricity without emitting
greenhouse gases. Nuclear power is an energy source that has
the potential to meet these requirements. European research
plays a key role in the field of nuclear technology and focuses
on, among other things, waste management optimisation and
fuel conservation. The framework for future nuclear power has
also been established through several international organisa-
tions and networks related to research and development.
Existing reactors are unable to use more than a small por-
tion of the available nuclear fuel. The resulting energy surplus
can only be captured if spent fuel is reprocessed and recycled
into the fuel cycle. Improving reactor design or providing better
options for reprocessing and reusing nuclear fuel would reduce
hazardous waste levels and result in better use of available ura-
nium resources.
A new generation of nuclear power
Nuclear reactor development is divided into generations. The
first reactor prototypes and nuclear facilities, Generation I,
were put into operation during the 1950s and were the first to
Nuclear power development phases
Generation I Generation II
Early Commercial
prototypes power
1950 1960 1970 1980 1990
Source: Argonne National Laboratory, U.S. Department of Energy, Nuclear Engineering Division
80 | SIX SOURCES OF ENERGY
be developed solely for energy (as opposed to nuclear weapon)
purposes. With the launch of Generation II, nuclear reactors were
developed to be used for commercial purposes on a wide front.
Generation III includes the modern reactors in operation today.
Generation III+ reactors, connecting modern technology with
the technology of tomorrow, are already under construction.
Future technological developments include Generation IV reac-
tors, expected to be put into operation in 20 to 30 years.
Development of Generation IV reactors
The Generation IV International Forum (GIF) was established in
the early 2000s to develop the requisite new technology. The
organisation represents governments from 13 countries. The GIF
has defined four objectives and criteria that must be met by Gen-
eration IV reactors: sustainability, economics, physical safety and
non-proliferation, and reactor and operational safety.14
The first criterion, sustainability, is aimed at creating a long-
term power generation that meets global environmental goals.
Nuclear waste will be minimised and managed to burden future
generations as little as possible. Under the second require-
ment, economics, the reactors live cycle must have a clear cost
Generation III Generation III+ Generation IV
Advanced light Evolutionary Revolutionary
water reactors designs designs
2000 2010 2020 2030 2040
 NUCLEAR POWER

advantage over other power generation methods while finan-

cial risks must not exceed those of other energy projects.
In terms of physical safety and non-proliferation, the systems
must demonstrate that they impede the theft or concealment
of weapons-grade materials and ensure protection against ter-
rorist attacks. The final criterion, reactor and operational safe-
ty, emphasises extremely high levels of operational safety and
reliability and the minimal probability of core damage.
The primary objectives of the new generation are to increase
fuel efficiency, reduce long-lived nuclear waste and facilitate
the reprocessing of high-level waste from existing reactors.
Part of the reactor concept designed by GIF will include not only
electricity generation but also the ability to use the heat pro-
duced to assist with other production; e.g., of hydrogen.

Fusion energy an energy source of the future?

Fusion energy is based on combining two light nuclei to form a
new, heavier nucleus. The fusion creates large amounts of energy
in the form of heat that can be used to produce electricity. Fusion
is, so to speak, the opposite of conventional nuclear power, fission,
which is based on splitting a
heavy nucleus into two light
The advantages of fusion nuclei. The sun is a natural
power are its potential to fusion reactor: all thermal and
generate exceptionally large luminous energy radiating
amounts of energy, powered from the sun is produced by
the fusion of light nuclei.
by inexpensive, ordinary
The advantages of fusion
materials, and the fact that it power are its potential to
leaves no hazardous waste generate exceptionally large
behind. amounts of energy, po-
wered by inexpensive, ordi-
nary materials, and the fact that it leaves no hazardous waste
behind. The disadvantage is that it requires extremely high tem-
peratures, which are difficult to control. Fusion power research
has been conducted since the 1950s and is steadily advancing,
but when and if fusion power will become commercially viable
remains unclear. Today, the ITER (International Thermonu-
clear Experimental Reactor) research project, a collaboration
between the EU, the US, Russia, India, Korea and China, super-
vises the development of fusion reactors. 15

ONE ENERGY SYSTEM | 81

NUCLEAR POWER

Vattenfall and Nuclear Power

Nuclear power plays a vital role in many European countries due to its economic attractiveness, security of
supply and low CO2 emissions. Vattenfall has played a major role in constructing Swedens nuclear power
plants, and is an owner of nuclear power in Germany. Vattenfall aims to maintain its current nuclear power
operations in Sweden and Germany and to keep its growth options open. Vattenfall is intensifying its efforts
to achieve impeccable safety and availability levels.

Vattenfalls nuclear power operations
Vattenfall owns ten nuclear reactors (one with a minority stake).
Seven of these are located in Sweden (four at Ringhals, three
at Forsmark), and three in Germany (Brunsbttel, Krmmel
and Brokdorf). Reactors 1 and 2 at Ringhals nuclear power
plant, south of Gothenburg in Sweden, were Vattenfalls first
two reactors and have been in operation since 1976 and 1975,
respectively. Since 2003, Vattenfall and other joint owners of
the Swedish nuclear power plants have made safety improve-
ments and life extension investments in the Swedish reactors.
These investment programmes are now approaching their con-
cluding phases.
The Krmmel nuclear power plant in Geesthacht, east of
Hamburg, is the largest of Vattenfalls reactors with an installed
capacity of nearly 1,350 MW. The reactor has been in operation
since 1984. The reactor at the Brunsbttel plant west of Ham-
burg is the smallest of Vattenfalls reactors in terms of installed
capacity.
Vattenfall is engaged in continuous safety efforts at all of its
power plants, and has invested several billion SEK to enhance
safety. Additional investments will be made to complete these
enhancements by 2015. Vattenfall owns the uranium used as
fuel, from point of extraction through the entire fuel cycle, and
can therefore impose comprehensive monitoring and control

Ringhals nuclear power plant in southwest Sweden.

82 | SIX SOURCES OF ENERGY

 NUCLEAR
INTRODUCTION
POWER

SUMMARY
g 509 8=09 2:  860;2;2<0 0709?
source with relatively low costs for fuel,
procedures. Vattenfall imposes strict CSR requirements on its uranium suppliers.16 operation and maintenance. Construct-
For a full list of Vattenfalls nuclear power plants, please see the production site ing a nuclear power plant is expensive and
at www.vattenfall.com/powerplants. time-consuming, but the useful life of a
power plant is very long, up to 60 years
Vattenfalls nuclear power operations going forward g 5098=0998<20::;/507590
Nuclear power is gaining support in Europe and, as one of Europes prominent scale electricity generation
nuclear operators, Vattenfall is in an advantageous position. Nuclear power pro-
g 509 8=09 062;: 58= 50<05: 81 2
duces a secure supply of electricity, is economically competitive and has low CO2 across the life cycle. Uranium mining inter-
emissions. Vattenfall therefore considers nuclear power to be a crucial part of the feres with nature, though damage to the
energy system of the future. landscape is repaired after mining is com-
Nuclear power is an important component in Vattenfalls efforts towards a pleted
carbon neutral operation, as well as the EUs 2020 goals to reduce climate impact.
g 5098=0987;:189985?09
Several countries, including France and Finland, are building new nuclear reactors cent of the EUs electricity generation, but
and in many other countries, including Sweden, the issue is being discussed. Vatten- the significance of nuclear powers role
fall welcomes an expansion of European nuclear power and the development of varies widely among European countries
tomorrows nuclear technology, and will keep its options for growth in the field of
g #0 587;096 670607; 81 928-
nuclear power open.
tive waste is a key issue in the planning of
new nuclear plants. Much of the hazardous
waste is handled in direct connection to
the plant, while the most hazardous por-
tions are isolated for several thousand
years in geological final disposal reposi-
tories. Waste management and power
plant demolition are included in financial
and operational calculations starting in
the waste planning phase
g 5098=092:2727:89;27980
and Vattenfall is one of the prominent
European nuclear operators. Vattenfall
welcomes an expansion of European
nuclear power and the development of
tomorrows nuclear technology. Stan-
dardisation of designs and harmonisation
of requirements imposed on the plants are
key factors to success
Footnotes Nuclear power g %;;07155 26: ;8 627;27 2;: 9907;
1
International Energy Agency (IEA), World Energy 11
You can read more about nuclear safety and nuclear
Outlook 2010 power in different countries on World Nuclear
nuclear power generation in Sweden and
2
You can read more about nuclear safety and nuclear Associations webpage, www.world-nuclear.org Germany and to keep its replacement and
power in different countries on World Nuclear 12
Ibid.
growth options open
Associations webpage, www.world-nuclear.org 13
Ibid.
3
World Nuclear Association, World Nuclear Power 14
You can read more about The Generation IV Inter-
Reactors (2010), www.world nuclear.org, national Forum on their webpage, www.gen-4.org
(November, 2010) 15
You can read more about nuclear safety and nuclear
4
IEA, op. cit. power in different countries on World Nuclear
5
World Nuclear Association, op. cit. Associations webpage, www.world-nuclear.org
6
IEA, op. cit. 16
You can read more Vattenfalls nuclear fuel
7
World Nuclear Association, op. cit. procurement on Vattenfalls webpage,
8
IEA, op. cit. www.vattenfall.com
9
World Nuclear Association, op. cit.
10
IEA Statistics, Electricity Generation 2010,
www.iea.org

ONE ENERGY SYSTEM | 83

WIND POWER
Wind power has no fuel costs and no emissions of CO2. Total cost per pro-
duced kilowatt hour is relatively high due to significant investment costs.
Wind power is the fastest growing energy source in Europe and plays a
key role in the achievement of the European Unions climate goals.

84 | SIX SOURCES OF ENERGY

ONE ENERGY SYSTEM | 85
WIND POWER

The Energy Triangle Wind Power

Climate and environment

All energy sources have environmental impact during their life cycles. Combustion of
energy sources, particularly fossil fuels, generates CO2 emissions and contributes to
global warming. In the long run, emissions from power production will need to be close
to zero if greenhouse gas levels in the atmosphere are to be stabilised.

Wind power is a renewable energy source that emits essentially no CO2 across
the life cycle. Wind turbines do have an impact on the landscape, which some
people may find disturbing.

Security of supply Competitiveness

Fuel shortages and unreliable electricity systems cause
societal and economic problems. Securing supply means
guaranteeing that primary energy is available, and that
delivered energy is reliable, essentially 100 per cent of the
time. This is a major political and technical challenge.
Energy is a fundamental input to economic activity, and thus
to human welfare and progress. The costs of producing
energy vary between different energy sources and technol-
ogies. A competitive energy mix will keep overall costs as low
as possible given the available resources.

Wind resources are renewable, and do not increase
import dependency. They can thus be securely deve-
loped. But wind power is dependent on available wind,
and excessively high wind speeds require tempo-
rary stops in electricity generation. New wind power
developments must therefore target areas with reli-
able and predictable winds.
Wind power has no fuel costs, though total cost per
produced kilowatt hour is high due to significant invest-
ment costs and the need for network capacity invest-
ments for new wind farms. Today, wind power is there-
fore largely dependent on support systems. Larger
investments are required for offshore wind farms than
for land-based ones. Technological development and
an increase in the price of CO2 emissions will make wind
power more cost-competitive.

86 | SIX SOURCES OF ENERGY


The History of Wind Power
Man has been using wind energy for thousands of years. For
a long time wind was harnessed with the help of sails, open-
ing new horizons by allowing boats to travel faster over longer
distances.
The first step towards the use of wind power as we know it
today was the use of windmills in the Middle Ages. Windmills came
to play a major role, particularly in terms of agriculture, in areas
that lacked the resources to use hydro power. Wind power also
played a crucial role as railways were built across the North
American continent during the 1800s. Steam engines needed a
continuous supply of water, and small wind turbines were used to
pump water into storage tanks from which water could then be
loaded into the locomotive.
The history of modern wind power dates back to the 1970s.
The 1973 oil crisis was a driving force for technological develop-
ment. Denmark was one of the European countries that decided
Evolution of wind turbine size over time
Airbus 320
wing span 34 m
Rotor diameter
Capacity
15 m 1.3 MW
0.5 MW 0.5 MW
1985 1990 1995
WIND POWER
early on to utilise wind power technology to reduce its depen-
dency on oil. Today, Denmark remains among the countries
where the share of electricity demand that is met by wind power
is the highest: in 2008 Danish-produced wind power comprised
19 per cent of the countrys electricity generation.1
Rapid development has been taking place since the 1980s.
Continual technology improvements (e.g., longer blades,
improved power electronics, better use of fibre-reinforced
plastics) have been carried out over time, aimed at capturing
as much energy as possible from the wind. Interconnected wind
farms became more prevalent, replacing the use of smaller
machines. In 1985, the typical turbine had a rotor diameter of
15 metres. Fifteen years later, the size had increased nearly ten-
fold, meaning a significant increase in capacity. Large commer-
cial turbines today have a capacity of 5 MW as compared to 0.5
MW in 1985.
7.0 MW
4.5 MW
5.0 MW
126 m
2.0 MW
112 m
2000 2005 2010
Source: European Wind Energy Association
ONE ENERGY SYSTEM | 87
WIND POWER

How Wind Power Works

Wind turbines today
A wind turbine converts wind energy (essentially, the kinetic
energy in the air) into electricity. Of course, wind power requires
favourable wind conditions. Wind drives the turbines blades
and hub, which make up the rotor. The turbines shaft is con-
nected to a generator inside the nacelle located in the upper
part of the tower. A gearbox, normally situated between the
rotor and generator, steps up the slow speed of the rotor to a
speed that suits the generator.
A yaw system between the nacelle and the tower automati-
cally keeps the turbine pointed into the wind. This allows the
utilisation of wind blowing from different directions by automa-
tically keeping the turbine turned into the wind. Turbine blades
are normally made of extremely durable fibreglass-reinforced
plastic and sometimes of carbon-reinforced fibres. Lightning
protection is also built into the blades.
Wind turbines have built-in, automatic control systems, but
they are also monitored from a manned control centre. If an

Offshore wind farm

Offshore wind turbines are connected through an internal grid to an offshore

Wind turbines
substation, where the voltage is increased to improve transmission over long
distances. From the offshore substation electricity is transmitted onshore
through a control centre and then to the grid.

Offshore substation

Control centre

88 | SIX SOURCES OF ENERGY


operational problem arises, the control system can identify it
immediately and send an error message to the control centre.
Regular inspections are carried out by specially trained staff
as part of ongoing operational and security work. These spe-
cialists make sure that all equipment is in top condition, repla-
cing various machine components as needed to ensure optimal
operation and generation.
Wind farms
Wind turbines are often situated in groups, or wind farms, either
on- or offshore. A large wind farm may consist of hundreds of
individual wind turbines, inter-
connected by a transmission
Extensive calculations are system.
performed when planning wind Extensive calculations are
farm locations. Parameters performed when planning wind
studied include wind efficiency farm locations. Parameters
studied include wind efficien-
at specific locations and above- cy at specific locations and
ground altitude. Factors such above-ground altitude. Factors
as bird life and distance to such as bird life and distance to
residential areas are also taken residential areas are also taken
into consideration.
into consideration.
In wind farms, turbines
are ideally spaced four to 10
rotor diameters apart, depending on the prevailing wind. This
minimises efficiency losses caused by turbine interference.
Wind power and electricity generation
Wind turbines can only produce electricity when the wind speed
is right. When there is light or no wind, turbines rest in standby
mode. When wind blows to a sufficient degree, approximately
4 m/s, the turbine starts operating automatically and feeds
electricity into the grid. It operates at full power when winds are
around 12 to 14 m/s. In strong winds (wind speeds in excess of
around 25 m/s) the loads are so great that the turbine is shut off
to prevent unnecessary wear and tear.
Wind turbines in a wind farm are connected through an inter-
nal grid that feeds the produced electricity to a transformer
station. The transformer station increases the electricitys vol-
tage (e.g., from the internal grids 30 kV to 130 kV for the regional
grid) and the electricity is then transported to a nearby regional
grid through a connection point. Individual turbines can also be
connected directly to local grids.
Special facilities are required for offshore wind farms. In
most cases, turbines feed produced electricity to an offshore
WIND POWER
transformer from which a cable connects the wind farm to the
onshore electricity grid.
On those occasions when the wind is not strong enough,
other types of energy are used as balancing power. Natural
gas is often used as balancing power in Germany and the UK.
In Sweden, balancing power is often synonymous with hydro
power. More water is drained from reservoirs when the wind is
weak. Similarly, water can be conserved when wind is strong.
Good wind position is a projects first step
In order for a wind farm to be profitable, it must have a good wind
position. Computer programmes that can calculate theoretical
wind energy based on terrain and above-ground altitude are
used to identify areas with good wind positions. After an area
has been identified, a thorough examination is made of the geo-
graphical surroundings, existing roads, electricity grids, prox-
imity to residences, acceptance among local residents, flora
and fauna and any restricted areas. Winning the acceptance
of nearby residents can sometimes be a major challenge when
planning the construction of a new wind farm.
Before deciding on a location for a wind farm, theoretical
wind energy calculations must be checked by measuring wind
at the location. Wind measurements are normally taken with
cup anemometers (wind gauges) mounted in a measuring mast.
The anemometer is placed at several different altitudes and
measurements are taken over a long period of time in order to
assess the sites wind characteristics.
Optimal geographic areas for wind power are often in coas-
tal and open landscape areas where winds are strong. Offshore
sites away from the coast are usually optimal in terms of wind
strength. At the same time, it is important that turbines are
located relatively close to roads and power lines so that they
can be serviced and so that cables can be installed to transport
the generated electricity.
ONE ENERGY SYSTEM | 89
 WIND POWER
WIND SPEED
At an average wind speed of seven m/s, a
wind turbine produces during approxi-
mately 90 per cent of the hours of the
year. This is equivalent to an output of
approximately 5 to 6 GWh of electricity
per year for a turbine with an effect of 2 to
2.5 MW. Translated into household elec-
tricity, it corresponds to the consumption
of approximately 1,000 households.
90 | SIX SOURCES OF ENERGY
Offshore construction presents special challenges
When constructing an offshore wind farm, turbines are assembled on land to the grea-
test extent possible. They are then transported offshore by special crane-equipped
installation vessels. The parts that are not assembled on land are assembled offshore:
the tower and its foundation followed by the nacelle with hub and rotor blades moun-
ted on the tower. The trend is towards building the entire turbine on land and trans-
porting it offshore with special vessels. It is important to ensure that the turbine opera-
tes throughout its entire useful life (approximately 20 years) without requiring the
replacement of too many parts. Compared to land-based wind farms, greater strain is
put on offshore equipment due to waves, salt water, ice and stronger winds. Mainte-
nance is also more difficult. However, the fact that average offshore wind speeds are
often higher offers greater electricity generation potential.
Another issue is offshore grid connection; turbines located far from the coast
present challenges in terms of laying electric cable on the seabed. Regulations on
who pays for the connecting lines also differ between European countries; the wind
power company is liable in Sweden, while the grid operator is liable in Denmark, the
UK and Germany.
Investment costs for offshore turbines are also many times higher than for land-
based wind power, since in most cases it is more expensive to draw power lines to
land. One technical limitation to offshore turbines is the difficulty of building them in
depths exceeding 40 metres. Preliminary location studies for offshore wind farms
are extensive and include an examination of the marine ecology. It has been demon-
strated that offshore turbines have come to serve as artificial reefs where molluscs
can grow and fish can spawn, a tangible positive effect. Other issues that must be
taken into consideration include possible impact on shipping lanes, the fisheries
industry and bird life.
 WIND POWER

Wind Power in Europe

Strong growth
Wind power is the fastest growing source of energy in the EU. In
2009, installed capacity increased 23 per cent and accounted
for 39 per cent of total newly-installed electricity generation
capacity. In 2008, wind power produced 3.6 per cent of the EUs
total electricity generation.2
The largest share of new installations were land-based tur-
bines (over 9,500 MW of land-based wind power as compared to
nearly 600 MW offshore), though the rate of expansion for off-
shore was nearly twice that of land-based. The strong growth of
wind power is also distinctive in comparison with other energy
sources. Natural gas came second in terms of commissioned
new capacity, but was far behind wind power with just over
6,500 MW.3
In total, renewable energy constituted 62 per cent of all new
power generating capacity installed in 2009. This means that,
for the second consecutive year, renewable energy accounted
for the majority of all new installations. The strong growth in
wind power capacity is an important element in efforts to build
a sustainable energy system. The EUs goal is to increase the
share of renewable energy in the energy mix to 20 per cent and
to reduce CO2 emissions by 20 per cent over 1990 levels by the
year 2020.4 Wind power plays an important role in achieving
these targets.
Growth figures for the past 15 years also speak clearly.
Wind power has moved from a technology that attracted only
a few investors to one that attracts broad-based investments
throughout the EU. In 1995, total installed wind power capac-
ity was approximately 2,500 MW. Annual growth has been over
20 per cent since then, and total installed capacity was rough-
ly 75,000 MW by 2009. In a year with normal wind conditions,
these turbines produce approximately 200 TWh.5

Wind power in Europe - installed capacity over time

MW

80,000
74,767

70,000
64,719

60,000
56,517

50,000
48,031

40,000
40,500
34,372

30,000
24,491
23,098

20,000
3,476

17,315
3,476
3,476

10,000
12,887
3,476
2,497

0
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Source: European Wind Energy Association, Wind in power 2009 European statistics

ONE ENERGY SYSTEM | 91

WIND POWER

Support systems promote expansion of European

wind power
Each EU country has its own individual support system for
renewable energy. Regardless of how they are designed, the
support systems are meant to strengthen the competitiveness
of renewable energy sources and thus contribute to the ne-
cessary conversion of Europes energy system. Most European
countries, including Germany, Denmark and the Netherlands,
use feed-in tariffs under which producers of renewable elec-
tricity are guaranteed a fixed rate and have a guaranteed mar-
ket for the electricity produced. These contracts are long-term,
often as long as 15 to 25 years.
Sweden uses an electricity certificate system aimed at
increasing renewable electricity generation by 25 TWh over
2002 levels by 2020. Practically speaking, producers of rene-
wable electricity receive extra income through electricity cer-
tificates that are awarded in proportion to generation. Electri-
city suppliers buy certificates in proportion to how much they
sell (quota requirement). This creates demand for certificates,
and a market is formed where certificates are traded.

Germany and Spain lead the pack

Germany and Spain are Europes largest wind power countries
in terms of installed capacity, comprising one-third and one-
fourth of Europes wind power, respectively. These two coun-
tries are also leaders in terms of installed new capacity; Spain
led far and away in 2009, followed by Germany, Italy, France and
the UK. Smaller countries such as Sweden and Denmark also
had a high rate of expansion. Sweden accounted for five per
cent of newly-installed capacity, while Denmark accounted for
three per cent in 2009.
The picture changes, however, in terms of wind powers share
of the countries total electricity generation. Here, Denmark
emerges as one of Europes and the worlds leading wind power
countries. In 2008, 19 per cent of Denmarks electricity gen-
eration came from wind power; corresponding figures for Spain
and Germany were 10 and 6 per cent, respectively.6 The corre-
sponding figure for Sweden was just over one per cent.
In a global perspective, several of the largest wind power coun-
tries are found in Europe. The global leader, though, is the USA,
with an installed capacity of 35,159 MW in 2009, corresponding
to over 22 per cent of the worlds wind power capacity. Germany
comes second just ahead of China; both countries account for
roughly 16 per cent of global installed wind power capacity.7
As in Europe, wind powers global growth rate has been very
strong over the past 15 years. In 1995 there was a total of 7,644
MW installed capacity in the world.8 This figure increased to
159,213 MW by 2009.9

92 | SIX SOURCES OF ENERGY

 WIND POWER

Extensive authorisation process in European countries
To plan, obtain permissions for and build a wind farm is a long-
drawn-out process in most European countries. A project may
take anywhere from two to 10 years from initial planning to con-
struction start, depending mainly on issues related to obtain-
ing planning permissions. Planning is done in close dialogue and
consultation with local authorities, local residents, the gene-
ral public and other stakeholders. Consideration is taken of
the natural and cultural environment. The area where the tur-
bines will stand is thoroughly inspected and possible impact on
humans, animals and plants in the area is assessed.
The process of obtaining planning permission differs from
country to country. The terms and conditions for obtaining per-
mission can also be difficult to meet. In the Netherlands and
Sweden, there is a great degree of local authority over the plan-
ning process. In the Netherlands, municipalities need to actively
plan to set up a wind farm; if they are passive on the issue, they
are saying No for all practical purposes. In Sweden, munici-
palities have the authority to veto planned wind power projects
within their own borders.
In Denmark, which has seen dramatic wind power expan-
sion, local authorities are legally required to mark out areas for
setting up wind turbines. This has worked particularly well
in Denmark where municipalities have generally worked co-
operatively.

Wind power installed capacity in Europe (2009) Wind power share of total electricity generation (2008)

Poland 1% (725 MW)

Ireland 2% (1,260 MW) Other 5%

(3,675 MW)
Sweden 2% (1,560 MW)

Germany 34% %
(25,777 MW) 20
Netherlands 3%
(2,229 MW) 18

16
Denmark 5%
(3,535 MW) 14

12
Portugal 5%
(3,535 MW) 10

8
UK 5%
(4,051 MW) 6

2
France 6%
(4,492 MW) 0
n Denmark 19% n Netherlands 4% n Sweden 1%
n France 1% n Poland 1% n UK 2%
Italy 6% n Germany 6% n Spain 10% n Finland 0%
(4,850 MW)

Spain 26%
(19,149 MW)

Source: EWEA Annual Report 2009 Source: IEA Statistics, Electricity Generation, 2010

ONE ENERGY SYSTEM | 93

WIND POWER
The Future of Wind Power
Increasingly large wind farms in the future
Far-reaching technological development has taken place
since the first wind power stations were constructed in the late
1970s. Wind farms today are larger and produce more electri-
city. Above all, turbines are now 30 times larger and have a
capa-city of around 6 to 7 MW, though 2 to 5 MW turbines are
The Stor-Rotliden wind farm in northern Sweden.
94 | SIX SOURCES OF ENERGY
still most prevalent. It is estimated that the average wind farm
will have a turbine size of up to 10 MW by the year 2030.
One reason for the increase in turbine size is that more and
more wind power facilities are being built offshore. The argu-
ments supporting offshore location are higher wind speeds
with greater energy content and the fact that no land area

is used (lowering the risk of conflict with nearby residents or
other stakeholders). At the close of 2009, offshore wind power
accounted for less than three per cent of the EUs total wind
power inventory, though forecasts indicate that offshore wind
power will be greater than land-based by around 2030.
Future wind power research and development will focus on
things such as wind farm optimisation, increased reliability and
efficiency. There are also ambitions to reduce wind powers
dependence on maintenance and to make it easier to assemble.
Finally, extensive research is being conducted on future elec-
tricity grids, as increased wind power generation will place new
demands on functionality.
New demands on future electricity system smart grids
The electricity grids across Europe today are primarily adapted
to electricity from a few large power plants. They are one-way
grids, providing distribution networks with electricity. Future
energy systems will place new demands on the electricity sys-
tem. The increased number of intermittent energy sources, such
as wind power, electric vehicles and household-produced elec-
tricity, will increase the need for an intelligent, flexible and re-
liable electricity grid. And as offshore wind power is construc-
ted the need increases for a new, high-capacity grid, as well as
advanced networks dedica-
ted to collecting wind energy.
If grids arent constructed at a
The European Commission fast enough pace, the expan-
has initiated a research sion of offshore wind power
programme aimed at improving risks being delayed. The proc-
the technological performance ess of grid expansion vis--
vis offshore power is compli-
of turbines while improving
cated, however, and differs
economic conditions. The between European countries.
research programme comprises Until now, research on the
six billion EUR through 2020. future electricity system has
fallen under the smart grid
concept. The basic idea of a
new electricity grid is that smart management ensures that the
electricity system becomes more efficient, both economically
and technically. An IT-based control unit manages and makes
decisions based on data on generation, demand, use, etc., con-
tinuously retrieved from various parts of the electricity system.
The control unit collects huge amounts of data that can then be
used for more advanced consumption management. The data
can also be used to make more reliable forecasts and improve
planning.
WIND POWER
EU continues to invest in wind power
The EU has set a number of targets to be met by 2020. One of
these targets is that renewable energy will constitute 20 per
cent of all energy consumed within the EU by 2020. In a recent
EU Commission scenario, wind power is expected to account
for 14 per cent of electricity consumed within the EU by 2020.10
As an increasingly large share of the EUs electricity is derived
from wind power as opposed to fossil fuels, relative carbon
emissions are reduced.
The European Commission has initiated a research pro-
gramme aimed at improving the technological performance of
turbines while improving economic conditions. The research
programme comprises six billion EUR through 2020.11 In addi-
tion to increasing the share of renewable energy and lowering
CO2 emissions, the programme will create several thousand
new jobs within the wind power industry. At the same time, the
number of jobs in the fossil fuel sector will decrease as demand
falls.12 The wind power industry currently employs 192,000 peo-
ple within the EU.13
In 2008, the share of renewable electricity in the EU was
roughly 18 per cent, and wind power constituted four per cent
of the total electricity generation.14 Renewables accounted for
62 per cent of new electricity generation capacity installed in
the EU in 2009. With more than 74 GW of total installed wind
power capacity in 2009, the installations exceeded the 2010
target of 40 GW.15 According to the European Renewable Ener-
gy Council, renewables will account for 34 to 40 per cent of total
EU electricity generation by 2020.16
With its increasingly important role in Europes energy sup-
ply, wind power has a bright future. But it does face challenges.
One of these, described above, is to simplify the process for
obtaining planning permissions without sacrificing dialogue
with all interested parties. Another challenge is operational
security. A wind turbine has a useful life of approximately 20
years, and must produce electricity during most of this time to
be profitable. Availability (the amount of time a wind farm can
produce if winds are sufficient) is a key measure. For example,
the offshore Lillgrund wind farm off Swedens southern coast
produces electricity between 98 and 99 per cent of the time,
and thus has an availability of between 98 and 99 per cent.
Generation disturbances must also be kept at a minimum;
repairs or replacement of vital parts reduces availability and
directly impacts profitability. In many cases, a slightly smaller
turbine with long-proven technology may be a better choice
than one of the largest turbines on the market that hasnt yet
had as long an operating life.
ONE ENERGY SYSTEM | 95
WIND POWER

Vattenfall and Wind Power

Wind power is the fastest growing energy source in Europe and plays a key role in the achievement of the
European Unions 20-20-20 targets. Vattenfall is Swedens largest wind power operator and Europes larg-
est offshore wind power operator. Vattenfall will continue to expand its offshore wind operations in North
Sea countries (UK, Germany, Netherlands) and its onshore operations in prioritised markets.

Vattenfalls wind power operations
Vattenfall is one of the largest wind power generators in Europe.
Vattenfall operates around 900 turbines in Sweden, Denmark,
Germany, Poland, the Netherlands, Belgium and the UK. Together,
these turbines generate approximately 2.2 TWh of electricity
annually.
Vattenfall is the proud owner of many of the worlds largest
offshore wind farms: Horns Rev off the west coast of Denmark,
Lillgrund in the resund Strait in Sweden, Kentish Flats and
Thanet just off the southeast coast of England, Egmond aan
Zee off the Dutch coast in the North Sea, and Alpha Ventus off
the coast of northwest Germany.
For a full list of Vattenfalls wind farms, please see the pro-
duction site at www.vattenfall.com/powerplants.
Vattenfalls wind power operations going forward
Vattenfall sees significant growth opportunities within wind
power, though profitability is dependent upon support systems.
In terms of offshore wind power, Vattenfall has a competitive
advantage and intends to grow further.
Vattenfall is investing to increase its electricity generation
from wind power. Between 2009 and 2011, Vattenfall has had
nine wind farms in six countries under construction. This rep-
resents an investment of 20 billion SEK in these facilities and

Thanet offshore wind farm off the coast of southeast England.

96 | SIX SOURCES OF ENERGY

 WIND POWER

SUMMARY
g &278=092:;01:;0:;98=279070=-
able energy source and plays a key role in
a near doubling of Vattenfalls wind power electricity generation to 4 TWh (the the attainment of the European Unions
amount needed to power 800,000 households). Vattenfall has also entered into a 20-20-20 targets
joint venture with Stadtwerke Mnchen (SWM) for construction of the Dan Tysk off-
g ; ?0907  27:;550 =27 8=09
shore wind farm in the North Sea, one of the worlds largest offshore wind power capacity produced 3.6 per cent of the elec-
projects. With a capacity of 288 MW and an output of approximately 1,320 GWh, the tricity consumed within the EU
wind farm will produce enough renewable power to supply electricity to more than
g &278=09:781058:;:#8;58:;
500,000 homes.
per produced kilowatt hour is relatively
Vattenfall is continuously exploring possibilities for on- and offshore wind power high due to significant investment costs
projects in several countries. In early 2010 Vattenfall and Scottish Power Renew- and the need for network capacity invest-
ables were awarded one of the zones in the British Round Three for expanding ments for new wind farms. Wind power is
offshore wind power. Vattenfalls zone has the potential to deliver 25 TWh on an therefore largely dependent on support
annual basis, equivalent to the consumption of four million households. The Thanet systems
wind farm, the worlds largest offshore wind farm, opened in September 2010 and g :050;922;?0709;2871986=278=09
increased the UKs wind power generation by 30 per cent. and other energy sources with fluctuating
generation increases, the need arises for
Smart grids an important tool for increasing the share of wind power in an intelligent, flexible and reliable network.
the energy mix Smart grid technology enhances possibili-
As electricity generation from wind power and other energy sources with fluctuat- ties to control and store electricity, making
ing generation increases, the need arises for an intelligent, flexible and reliable net- it an important tool for efficiently integra-
work. Todays European electricity networks were originally planned and construct- ting small- and large-scale power genera-
ed for centralised, large-scale electricity generation and distribution. Demands tion in European electricity networks
placed on electricity networks have changed, and these networks are no longer g &27 8=09 062;: 58= 50<05: 81 9/87
suitable for current and future energy systems. This fact, along with societal, ener- dioxide. Wind turbines do have an impact
gy usage and political trends, has resulted in the development of smart grid techno- on the landscape, which some people may
logy. Smart grids enhance possibilities to control and store electricity, making it an find disturbing
important tool for efficiently integrating small- and large-scale wind power genera- g %;;071552:87081;0/20:;=278=09
tion in European electricity networks. Vattenfall is conducting several smart grid generators and developers in Europe.
technology R&D projects aimed at ensuring secure and reliable network services, Vattenfall operates around 900 turbines
today and in the future. in Sweden, Denmark, Germany, Poland, the
Netherlands, Belgium and the UK
g %;;07155:00::2727;98=;889-
tunities within wind power. In terms of off-
shore wind, Vattenfall has a competitive
advantage and intends to expand further

Footnotes Wind power

1
International Energy Association (IEA) Statistics, 9
World Wind Energy Association, op. cit.
Electricity Generation 2008, www.iea.org 10
European Commission, EU energy trends to 2030.
2
IEA World Energy Outlook 2010 11
European Commission (2009), SE C (2009) 1295
3
IEA Wind Energy Annual Report 2009 12
European Climate Foundation (2010), Roadmap
4
Read more about the EU Climate Change Policy on 2050, Technical Analysis
www.energy.eu 13
EWEA (2010), Wind Energy Factsheets
5
Read more about wind energy on European Renew- 14
IEA Statistics, op. cit.
able Energy Councils webpage. www.erec.org 15
European Commission (2010), www.europa.eu
6
IEA Statistics, op.cit. 16
European Renewable Energy Council, Renewable
7
World Wind Energy Association, www.wwindea.org Energy Technology Roadmap
8
U.S. Energy Information Administration,
www.eia.doe.gov

ONE ENERGY SYSTEM | 97

GLOSSARY

Word Definition

Biogas Biofuel formed through the decomposition of organic material

Biomass A renewable energy source composed of agricultural or forestry material from which energy is extracted,
usually through combustion
Carbon dioxide CO2 a colorless, non-flammable gaseous substance. Taken up by plants during photosynthesis. Along with water,
carbon dioxide is an end product of fossil fuel combustion
Carbon dioxide storage Storage of CO2 in geological formations to reduce emissions to the atmosphere
CCS Carbon Capture and Storage - technology for capturing CO2 from fossil-fired power plants, compressing it to a liquid and per-
manently storing it deep underground in order to reduce atmospheric emissions
CNG Compressed Natural Gas comprised primarily of methane and used as fuel in some cars and buses
Co-firing Simultaneous combustion of two different types of material. One of the advantages of co-firing is that it allows existing
power plants to burn a new type of fuel that may be less expensive or more environmentally friendly
Emissions trading In this context, a large-scale, market-based system used to control pollution by providing economic incentives for reducing
greenhouse gas emissions
Energy carrier System or substance used to transfer energy from one place to another
Energy crop A plant grown and used to make biofuels, or combusted for its energy content to generate electricity or heat
Energy mix The share of each energy source in, for example, a countrys energy consumption
EREC European Renewable Energy Council
Ethanol Biofuel produced by the fermentation of liquids from agricultural products
Fission A nuclear reaction in which the nucleus of an atom splits into smaller parts
Flue gas Gases formed during combustion. Often contain harmful residues
Fusion A process by which two or more atomic nuclei come together to form a single heavier nucleus
Geothermal energy Thermal energy stored in the Earth
Greenhouse gas A collective term for gases that affect the climate by preventing long-wave heat radiation from leaving Earth's atmosphere
IAEA International Atomic Energy Agency
IEA International Energy Agency
kW Kilowatt equal to 1,000 watts
kWh Kilowatt hours - measures the number of kilowatts consumed per hour
LNG Liquefied Natural Gas - natural gas that has been cooled to -162C and transformed into liquid
LPG Liquefied Petroleum Gas - a flammable mixture of hydrocarbon gases used as fuel in heating appliances and vehicles
MTOE Million tonnes of oil equivalent the amount of energy released by burning one million tonnes of crude oil. An energy unit which is
often used to compare the energy content of different energy sources
MW Megawatt equal to one million watts
MWh Megawatt hours measures the number of megawatts consumed per hour
OECD Organisation for Economic Co-operation and Development
Osmotic power A method of capturing the energy released when fresh water is mixed with salt water
Pellet Materials compressed into small balls or rods
Photosynthesis A process in which plants, algae and some bacteria convert carbon dioxide into e.g. oxygen, using the energy from sunlight
Power The rate at which work is performed or energy is converted
PPM Parts per million often used to measure the concentration of CO2 in the atmosphere
Saline aquifer Porous rock located deep underground, where carbon dioxide can be stored
Salt power Energy available from the difference in the salt concentration between sea water and fresh water
(same as osmotic power, above)
Smart Grids Term for the electricity networks of the future
TW Terawatt equal to one billion, or 1012, watts
TWh Terawatt hour measures the number of terawatts consumed per hour
W Watt measures the rate of energy conversion. 1 watt = 1 joule per second
Wh Watt hour measures the number of watts consumed per hour. An ordinary hotplate uses around a thousand watt hours,
or one kWh, per hour

98 | SIX SOURCES OF ENERGY

Vattenfall AB (publ)
SE-162 87 Stockholm, Sweden
Visitors: Sturegatan 10
Telephone: +46 8 739 50 00

For more information,

please visit www.vattenfall.com