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10 JUNE 2020
© Wärtsilä 10.6.20202
AGENDA
Alexandre Eykerman Matti Rautkivi Patrik Farkas Giriraj Rathore
Director, Middle East
Energy Business, Wärtsilä
Director, Strategy &
Business Development
Energy Business, Wärtsilä
Market Development
Manager, Middle East
Energy Business, Wärtsilä
Senior Business
Development Manager
Energy Business, Wärtsilä
IntroductionGlobal Energy
Transition
Energy Storage
& Optimization
Middle East
Energy Trends
[email protected] [email protected] [email protected] [email protected]
© Wärtsilä© Wärtsilä 10.6.20203
DELIVERED 72 GW POWER PLANT CAPACITY IN 180 COUNTRIES
OVER 70 GLOBAL ENERGY STORAGE SYSTEMS INSTALLED
OUR EXPERTISE CENTRES SUPPORT NEARLY 250 POWER PLANTS GLOBALLY
Wärtsilä Energy Business leads the transition towards a 100% renewable energy future. We help our customers unlock the value of the energy transition by optimising their energy systems and future-proofing their assets.
Our offering comprises flexible power plant solutions, energy management systems, and storage, as well as lifecycle services that ensure increased efficiency and guaranteed performance. Wärtsilä has delivered 72 GW of power plant capacity in 180 countries around the world.
© Wärtsilä 10.6.20204
DELIVERED POWER PLANT CAPACITY72 GW IN 180 COUNTRIES AROUND THE WORLD
WÄRTSILÄ ENERGY BUSINESS
Utilities
IPP’s (Independent
Power Producers)
Industrials
Municipalities, co-ops,
Oil & Gas etc.
Americas,
output:
15.2 GW
Africa,
output:
7.4 GW
Europe,
output:
10 GW
Asia &
Middle East,
output:
38.9 GW
5430MW
5970MW
1150MW
2630MW
4010MW
1270MW
1710MW
3000MW
14 210MW
12 730MW
2080MW
9990MW
3330MW
1216MW
1070MW
1835MW
© Wärtsilä 10.6.20205
WÄRTSILÄ POWER PLANT FROM THE INSIDE
JORDAN, IPP3 (573 MW)
© Wärtsilä 10.10.2019
© Wärtsilä 10.6.20207
WÄRTSILÄ IN THE MIDDLE EAST
› Total capacity over 7,200 MW at 300+ installations
› Locally present service teams with central support from Dubai HQ
› Over 1,700 MW of Operation & Maintenance all over the region and increased O&M support from our Digital Expertise Centre in Dubai
Dubai Local HQ + 24/7 Remote
O&M Center + Workshop
200 + Employees
Jeddah250 Employees
1,9 GW of installed base
Lahore400 Employees
2,1 GW of installed base
Wärtsilä local office
Workshop
Branch / SPC
© Wärtsilä 10.6.20208
WÄRTSILÄ SUPPORTING YOU IN THE ENERGY TRANSITION
UNDERSTANDThe energy transition
unfolding and renewables
becoming the new baseload.
DESIGN & BUILD
Proper planning and smart
adaptation will be essential
for each country.
SERVE
The best solutions to accelerate
change through flexible power
plants, energy storage and
smart energy management
systems.
© Wärtsilä© Wärtsilä
GLOBALENERGY TRANSITION
10.6.20209
Matti Rautkivi
Director, Strategy & Business
Development, Energy Business, Wärtsilä
© Wärtsilä 10.6.202010
INCREASING COMPETITIVENESS OF RENEWABLES
Renewable energy generation cost since 2010
GLOBAL ENERGY TRENDS
Source: Bloomberg New Energy Outlook 2019
85% 49% 85%
© Wärtsilä 10.10.2019
Renewables are now cheapest new energy source across more than two-thirds of the world…
GLOBAL ENERGY TRENDS
...and by 2030 they undercut existing coal and gas almost everywhere.
Most competitive source of new bulk generation in 2014
Note: Reflective of the cheapest benchmark project for each technology and market
Most competitive source of new bulk generation in 2019
Source: Bloomberg New Energy Outlook 2019
© Wärtsilä 10.10.2019
ENERGY OUTLOOK: 50 BY 50
Annual gross capacity additions 2018-2040 (GW)Capacity mix 2018 (7.0 TW) Capacity mix 2040 (15.5 TW)
Source: Bloomberg New Energy Outlook 2019
Note: Other flexible capacity includes all possible technologies that are not running on baseload, excluding peaker gas, i.e. could be a combination of storage, interconnections, demand response etc.
Traditional
technologies 83%
New technologies
17%
29%
19%
5%
17%
8%
8%
5%
4%
0
100
200
300
400
500
600
700
2018 2020 2022 2024 2026 2028 2030 2032 2034 2036 2038 2040
Coal Gas NuclearHydro Wind SolarOther renewables Other Other flexible capacityPeaker gas
10%
11%
9%
19%
33%
7%6%
Traditional
technologies 43%
New technologies
57%
GLOBAL INSTALLED CAPACITY SHIFTS FROM 57% FOSSIL FUELS TODAY,
TO 2/3 RENEWABLES BY 2050
© Wärtsilä 10.6.202013
RAPID GROWTH FORECASTED FOR FLEXIBLE SOLUTIONS
0
20
40
60
80
100
120
140
160
2018 2020 2022 2024 2026 2028 2030 2032 2034 2036 2038 2040
Oil Gas Peaker gas Utility-scale batteries Small-scale batteries
0
20
40
60
80
100
120
140
160
2018 2020 2022 2024 2026 2028 2030 2032 2034 2036 2038 2040
Peaker gas Utility-scale batteries Small-scale batteries Pumped hydro
ANNUAL CAPACITY ADDITITIONS 2018-2040 (GW)
ANNUAL FLEXIBLE CAPACITY ADDITIONS 2018–2040 (GW)
Source: Bloomberg New Energy Outlook 2019
© Wärtsilä 10.10.2019
ENERGY TRENDS
Utility-scale battery additions (GW) 2018-2040
0
5
10
15
20
25
30
35
40
45
50
2018 2020 2022 2024 2026 2028 2030 2032 2034 2036 2038 2040
OthersMETAEuropeAmericasAPAC
0
50
100
150
200
250
300
350
400
2018 2020 2025 2030
Transformer
Developer margin
Developer overheads
EPC*
EMS
Balance of system
PCS
Battery rack
CAPEX for 20MW/80MWh AC fully installed
energy storage system
Real 2018 ($/kWh)
Source: Bloomberg New Energy Outlook 2019
122-FOLD GROWTH IN ENERGY STORAGE UNTIL 2040
MENA
© Wärtsilä 10.10.2019
A GLIMPSE INTO THE FUTURE
© Wärtsilä 10.10.2019
GERMANY, APRIL 2020
Visit Wartsila Energy Transition Lab: https://www.wartsila.com/energy/transition-lab
THE ECONOMY REACTED TO COVID-19, BUT THE
SUN AND WIND DID NOT
5 days in April, Germany had to pay up to
€80/MWh to export excess electricity
→ Norway and Austria with more flexible
generation fleets were paid to receive green
electricity.
Legacy systems generate legacy results.
Germany could have been the first
European country to achieve 100%
renewable energy generation
© Wärtsilä© Wärtsilä
MIDDLE EAST ENERGY LANDSCAPE
10.6.202017
Patrik Farkas
Market Development Manager,
Middle East, Energy Business, Wärtsilä
© Wärtsilä 10.6.202018
› Transformation: molecule-export based economies → higher value add economies
› Foundation of growth: low-cost & sustainable power supply
› Economic diversification through energy intensive industries
Hydrocarbon export enabled the steep economic growth of
the Middle East and still represents the backbone of GCC’s
economy
© Wärtsilä 10.6.202019
POWER-WATERPRODUCTION DECOUPLING
REPLACEMENT OF AGEINGFLEET
LOWEST COST VARIABLE RENEWABLE ENERGY
FISCALEFFICIENCY
© Wärtsilä
0
20
40
60
80
100
120
2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035
US
D/M
Wh
Solar PV LCOE forecast
Australia China Germany India Japan United Kingdom United States
10.6.202020
SOLAR PV LCOE OUTLOOK
Qatar: 17.45 USD/MWh
(800 MW in construction)
KSA: 18.4 USD/MWh (1470 MW signed)
UAE: 24.2 USD/MWh (1170 MW in operation)
Source: Bloomberg New Energy Outlook 2019
Bahrain: 39 USD/MWh (100 MW)
UAE: 13.5 USD/MWh
(1500 MW bid)
© Wärtsilä 10.6.202021
POWER-WATERPRODUCTION DECOUPLING
REPLACEMENT OF AGEINGFLEET
LOWEST COST VARIABLE RENEWABLE ENERGY
FISCALEFFICIENCY
© Wärtsilä
0
10000
20000
30000
40000
50000
60000
70000
80000
90000
30+ 20-30 10-20 up to10
MW
Fleet age
Age distribution of power plants in GCC by fuel
Oil Gas & LNG Cogen Steam Solar Wind
10.6.202022
43 GW
18.5 GW
61 GW GENERATION CAPACITY NEAR RETIREMENT AGE
Source: S&P Global - World Electric Power Plants Database, 2020 March
© Wärtsilä© Wärtsilä
CROSSROADS
10.6.202023
ECONOMIC DIVERSIFICATION
LOW COST RENEWABLES
WATER-POWER NEXUS
REPLACEMENT OF AGEING FLEET
OILECONOMICS
© Wärtsilä 10.6.202024
10 UNITS WITH LOWEST LCOE* ≠ LOWEST SYSTEM LCOE
*LCOE: levelized cost of electricity
Cost of
electricity
Value of balancing
and ancillary services
Leadership challenge: “World-class leader in lowest-cost sustainable electricity”
It should be noted that lower LCOE does not necessarily entail lower
system costs, if structural changes to increase system flexibility are
not adopted” – IRENA 2019”
© Wärtsilä© Wärtsilä
UTILITY 2.0
25
Giriraj Rathore
Senior Business Development Manager
Energy Business, Wärtsilä
Patrik Farkas
Market Development Manager,
Middle East, Energy Business, Wärtsilä
© Wärtsilä
EXAMPLE WEEK WITH 50% RENEWABLE SHARE
00:0
0
03:0
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Mon Tue Wed Thu Fri Sat Sun
Ge
ne
rati
on
GW
Solar PV Wind Wind+Solar Load Net Load
© Wärtsilä
LOAD & NET LOAD WITH 50% RENEWABLE SHARE
00:0
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Mon Tue Wed Thu Fri Sat Sun
Ge
ne
rati
on
GW
Load Net Load
Load = Consumption
Net Load =Electricity NOT generated
by wind and solarFrequent load changes
Fast ramp-up/down
Shut down & start
+ Increased reserve
requirements
LARGE POWER PLANTS (WITH A STEAM CYCLE) ARE NOT DESIGNED TO
OPERATE ALONG THE BLUE CURVE!
Part load operation
© Wärtsilä
DYNAMIC PROPERTIES & CONSTRAINS WILL BE MORE IMPORTANT
Part load efficiency
Minimum Stable Load
Start cost
Start-up time
Minimum up & down time
Cycling cost
Fuel consumption at start-up
© Wärtsilä 10.6.202029
MUSANDAM IPP, OMAN
120 MW
MODULAR
DESIGN10-20 MW unit size
HIGH
EFFICIENCYin high temperature
conditions
~47%
FAST
RAMPING2 minutes to full load
FUEL
FLEXIBILITY
© Wärtsilä 10.6.202030
A grid scale large energy storage, converts the energy from a grid-scale power network
into a storable form that can be converted back to electrical energy when needed.”
ENERGY STORAGE FOR THE GRID
BATTERY ENERGY STORAGE
1. Fast response to match supply and demand.
2. Makes the system more flexible.
3. Improves capacity utilization of thermal power units.
4. Reduced CAPEX & OPEX.
5. Contribution to ancillary services.
”Storage is a powerful asset that adds flexibility and reliability to the grid.
© Wärtsilä 10.6.202031
ENERGY STORAGE USE CASES – RENEWABLE INTEGRATION
-400.0
-200.0
0.0
200.0
400.0
600.0
800.0
1000.0
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30
kW
Minutes
PV Ramp Rate Control with ESS
PV Output Grid Dispatch ESS Power
Net GridGeneration
ESS Dispatch
ESS Charge
PV Production
PV Ramp Down
PV Ramp Up
-400.0
-200.0
0.0
200.0
400.0
600.0
800.0
1000.0
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
kW
Hours
PV Smoothing with ESS
PV Output Grid Dispatch ESS Power
Net Grid Generation
ESS Charging
ESS Dispatch
PV Production
-600.0
-400.0
-200.0
0.0
200.0
400.0
600.0
800.0
1000.0
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
kW
Hours
PV Firming with ESS
PV Output Grid Dispatch ESS Power
PV Production
Net Grid Generation
ESS Charging
ESS Dispatch
-400.0
-200.0
0.0
200.0
400.0
600.0
800.0
1000.0
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
kW
Hours
Energy Shifting with ESS
PV Output Grid Dispatch ESS Power
PV productionESS Energy Shift
ESS Charging
ESS Dispatch
Net Grid Generation
ESS Application Description ESS Sizing
Frequency Response Corrects over and under frequency 15-30 minutes
Ramp Rate Control Mitigates ramping at generation source 30-45 minutes
Renewables Smoothing Maintains approximate solar curve 1 hour +
Renewables Firming Creates firm committed load shape 2 hours +
Renewables Shifting Shifts solar to evening hours with or w/o commit 4 hours +
Renewables FirmingRamp Rate Control Renewables Smoothing Renewables ShiftingFrequency Response
ENERGY STORAGE SOLVES MULTIPLE PROBLEMS FOR UTILITIES
© Wärtsilä 10.6.202032
1. Data driven: It should be
able to gather granular data
and process it for further
optimization.
2. It should have the capability
to handle multiple assets,
while being technology
agnostic.
3. It should be scalable to
manage increased asset
portfolio.
Optimized
flexible
generation?
Thermal
generation
Wind
Solar
Energy
Storage
ENERGY MANAGEMENT SYSTEM – THE CRITICAL LINK
Energy
management
system
An effective EMS should have
the following capabilities:
© Wärtsilä 10.6.202033
GEMS SOLUTION SUITE
ENERGY STORAGE AND OPTIMIZATION
› GEMS is the leading energy
system management platform
› A suite of proprietary software
products for building, monitoring
and intelligently operating power
plants and energy resources
› Optimizes all generation assets
› Secure, flexible, and scalable
› Deployed in 70+ projects around
the world
© Wärtsilä 10.6.202034
ENABLING 100% RENEWABLES FOR THE ISLAND OF GRACIOSA
OPTIMIZATION, INTEGRATION AND GRID CONTROL USING GEMS
Transforming and enabling a “renewables as baseload” grid with
energy storage, wind, solar and engines.
Hybrid renewable power
plant enables 1MW of PV
Solar, 4.5MW Wind and
6MW/3.2MWh battery
energy storage solution.
Integrates renewable
energy sources while
simultaneously
optimizing multiple
generating assets.
PPA based on fuel
savings. GEMS optimizes
multiple assets to eliminate
dependence on 17,000
litres of diesel per month.
Delivers both economic
and environmental
benefits.
© Wärtsilä 10.6.202035
REPRESENTATIVE DEPLOYMENTS
ENERGY STORAGE REFERENCES
I”I”I”
I” I”
20MW Frequency regulation 20MW Capacity + RA 2 x 50MW/50MWh Grid balancing
2MW Grid deferral CA, USA 70MW/70MWh
Renewables integration10MW Solar + Storage
© Wärtsilä 10.6.202036
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