4.4.3.1 Plant efficiency and fuel switching

Reductions in CO₂ emissions can be gained by improving the efficiency of existing power generation plants by employing more advanced technologies using the same amount of fuel. For example, a 27% reduction in emissions (gCO₂/kWh) is possible by replacing a 35% efficient coal-fired steam turbine with a 48% efficient plant using advanced steam, pulverized-coal technology (Table 4.9). Replacing a natural gas single-cycle turbine with a combined cycle (CCGT) of similar output capacity would help reduce CO₂ emissions per unit of output by around 36%.

Table 4.9: Reduction in CO₂ emission coefficient by fuel substitution and energy conversion efficiency in electricity generation.

Source: Danish Energy Authority, 2005.

Switching from coal to gas increases the efficiency of the power plant because of higher operating temperatures, and when used together with the more efficient combined-cycle results in even higher efficiencies (IEA, 2006a). Emission savings (gCO₂-eq/kWh) were calculated before and after each substitution option (based on IPCC 1996 emission factors). The baseline scenario (IEA, 2004a) assumed a 5% CO₂ reduction from fossil-fuel mix changes (coal to gas, oil to gas etc.) and a further 7% reduction in the Alternative Policy scenario from fuel switching in end uses (see Chapters 6 and 7). By 2030, natural gas CCGT plants displacing coal, new advanced steam coal plants displacing less-efficient designs, and the introduction of new coal IGCC plants to replace traditional steam plants could provide a potential between 0.5 and 1.4 GtCO₂ depending on the timing and sequence of economics and policy measures (IEA, 2006a). IEA analysis also showed that up to 50 GW of stationary gas-fired fuel cells could be operating by 2030, growing to around 3% of all power generation capacity by 2050 and giving about 0.5 Gt CO₂ emissions reduction (IEA, 2006j). This potential is uncertain, however, as it relies on appropriate fuel-cell development and is not included here.

By 2030, a proportion of old heat and power plants will have been replaced with more modern plants having higher energy efficiencies. New plants will also have been built to meet the growing world demand. It is assumed that after 2010 only the most efficient plant designs available will be built, though this is unlikely and will therefore increase future CO₂ emissions above the potential reductions. The coal that could be displaced by gas and the additional gas power generation required is assessed by region (Table 4.10). A plant life time of 50 years; a 2%-per-year replacement rate in all regions starting in 2010; 20% of existing coal plants replaced by 2030 and 50% of all new-build thermal plants fuelled by gas, are among the most relevant assumptions. The cost of fuel switching partly depends on the difference between coal and gas prices. For example if mitigation costs below 20 US$/tCO₂-eq avoided, this would imply a relatively small price gap between coal and gas, although since fuel switching to a significant degree would affect natural gas prices, actual future costs are difficult to estimate with accuracy. Generation costs are assumed to be 40–55 US$/MWh for coal-fired and 40–60 US$/MWh for gas-fired power plants.

Table 4.10: Potential GHG emission reductions by 2030 from coal-to-gas fuel switching and improved efficiency of existing plant.