Renewing the possibilities
In June 2018, Wärtsilä’s Energy business made a powerful statement of intent: the future of the industry is to be 100-percent renewable. But how will this be realised? And how close might we already be?
Wärtsilä Energy’s Director of Sales and Marketing Matti Rautkivi is developing something of a reputation for his perspectives on renewable energy, having contributed to Time Magazine twice on the subject. In one such article, he even points to U.S. President Donald Trump as a potential climate hero – albeit an unwitting one perhaps.
No stranger to the bold statement, then. But Rautkivi is adamant that Wärtsilä’s vision for the future is certain to have a huge impact, both on the company’s solution offering, and the markets in which they are employed.
“With the technologies existing today, we can cost effectively reach a level of 90 percent renewables in electricity systems, but our ambitions go further beyond that. As a modern technology company, we need to focus on how we will go on to develop solutions for the gap that remains, in a world that now understands the necessity of pushing that last 10 percent of fossil fuels out of the system.”
It is evident that this long-awaited widespread understanding has finally arrived. According to Rautkivi, the crucial enabler of this sea change has been the massive drop in prices energy producers have seen in renewable energy production. In recent years, cost effectivity could even be said to have supplanted sustainability priorities in the decision-making processes, leading to orders for renewables-based plants.
Rautkivi explains the fundamental shift he has seen take place among Wärtsilä’s customer base. “Across the globe, it is really being seen that renewable energy makes sense,” he explains. “I’ve been meeting with customers on almost every continent during the last couple of months, and everybody understands that renewable energy is cheap.”
But of course, the rise in public awareness of climate change continues to be a factor: “At the same time, the importance of cutting emissions is always there in these conversations, and more strongly than ever. It’s very widely understood that this is the only way forward, but the fact that renewables actually lead to lower costs and a different kind of operating model is beginning to become clear too.”
The utilisation of Wärtsilä’s flexible-fuel engines to accommodate for the inherent variability in renewable energy production is not a new story, but this methodology now takes centre stage in the company’s Energy business. As Rautkivi details in several recent project cases (see below), the approach has been refined to the extent that both the emissions and cost-related reductions enabled by a modern renewables-based power plant, have reached something of a peak.
The gap between what is currently achievable and 100-percent renewables must be closed by innovations still as yet in their early stages of development. One strong move towards this was initiated at the close of 2018 by Wärtsilä in cooperation with Finland’s Lappeenranta University of Technology (LUT) and Nebraska Public Power District (NPPD).
“Everybody knows that 100 percent is a challenging target,” says Rautkivi, “but that’s ultimately where we need to be, not just as an industry, but as humankind in the broadest sense. So we’re looking to build the optimal pathways to help our customers play a role in achieving it. Replacing fossil-fuel generation with more renewables and more flexibility is the first step, and with the confidence and productive discussions that stem from this, we can begin the research and innovation work – and co-creation processes – needed to solve the rest of the equation.”
Denton Municipal Electric
Wärtsilä recently supplied a 225 MW Smart Power Generation plant to Denton Municipal Electric, the locally-owned utility for the City of Denton, Texas. The plant includes twelve eighteen-cylinder Wärtsilä 50SG engines operating on natural gas, representing an order of approximately EUR 100 million.
The community was already committed to progressing towards a green, low-emissions power system, and the role of Wärtsilä’s technology has been that of enabling the utility to achieve its initial goal of reaching 70 percent renewable energy production by early 2019.
Matti Rautkivi: “In Texas, the wind and solar conditions are excellent, and as a result, renewable energy is very inexpensive. The new plant replaces a coal facility with renewables and the supporting addition of Wärtsilä’s flexible gas engines.”
“Having achieved 70 percent renewables, the cost reduction for customers in Denton was 35 percent and the reduction in emissions reached 80 percent – although the utility is already targeting 88. Costs are still going down and the flexibility the system enables is proving to be of enormous benefit.”
“All in all, Denton is a perfect example of how new renewable power production is taking shape: the utility has the vision, understands the business case, and makes the correct decision. As a side note, having come online in the summer of 2018, this coincided with a hot summer in Texas – and therefore a very profitable one for the company. Naturally, both the City of Denton and Denton Municipal Electric now have their sights on a level beyond 70 percent renewables, and we’re more than happy to help them get there.”
AGL Energy Limited
As one can readily imagine, operating conditions for solar energy production in Australia are exceptionally good. With cheap solar power coming to the market, energy providers are investing heavily in renewables, and coal plants are on the way out. One such example is AGL Energy Limited, one of the country’s leading integrated energy companies, with a large portfolio of renewable sources – including the nation’s largest wind and solar farms.
The new 211 MW Smart Power Generation plant they have recently ordered from Wärtsilä comprises twelve Wärtsilä 50DF dual-fuel engines, and will provide the fast-starting capability required to respond rapidly to the fluctuations inherent to renewable generation. This project represents the first utility-scale reciprocating engine power plant in Australia’s National Electricity Market (NEM).
The new plant, to be known as the Barker Inlet Power Station, will be capable of reaching full output within minutes, and will provide reliability in all conditions. The Wärtsilä engines will run primarily on natural gas, but can be switched to liquid fuel if necessary.
Matti Rautkivi: “It’s important to note that cases like this one are not the result of carbon tax schemes or other incentives – what we are seeing is the profound impact of all the cost barriers to the adoption of renewables completely disappearing, and energy providers responding quickly to reap the benefits.
“Large renewable-energy investments in similar cases in Australia were compared, side by side with the relatively low-cost and straightforward project of extending the life of coal-based plants. Thanks largely to the cheap availability of solar power, it was established beyond any doubt, that renewables were the only sensible direction. Calculations showed that the customer will make savings of 20 to 24 percent with the current solution.”
Nebraska Public Power District (NPPD)
Finally, after the prior examples of projects that have made the first momentous steps on the journey, a look at one means by which the remaining distance to 100-percent renewables may be completed; a collaborative project between Wärtsilä, Finland’s Lappeenranta University of Technology (LUT) and Nebraska Public Power District (NPPD), the largest electricity utility in the state of Nebraska, USA.
In late 2018, the three organisations signed a Memorandum of Understanding to study the development of a business case for the use of alternative fuels using Wärtsilä generating sets. The aim is to achieve a technically and commercially viable solution that will allow NPPD to proceed with an industrial-scale pilot project producing energy from 100-percent renewable carbon-free sources. The fuels in question will include methanol, dimethyl ether (DME) and ammonia, synthesised from hydrogen, CO2 and nitrogen.
Matti Rautkivi: “This project is all about developing the future building blocks for the 100-percent renewables path. The idea of taking CO2 from the air and using it to produce fuel for your vessel, or for your power plant – or even for cars – it sounds like science fiction, but the possibility is closer than you might think.
“We are going to Nebraska to develop the industrial-scale production of synthetic fuels, simply because the conditions there are so good for it. There is hydrogen available, there is CO2 available, and – most importantly – we have a customer looking to exploit the as-yet unexplored potential. It is exciting that we are able to convince very established customers of the value of projects such as this. This clearly indicates that utilities now understand the urgency of the change that is currently needed, and that they are eager to collaborate.
“By demonstrating the results with test engines, we will establish the viability of converting hydrogen to methanol using CO2, and then burning that methanol as fuel to produce electricity. Solutions like this should have a major impact on future fuel choices for the global energy market, not to mention helping us to realise our strong ambitions regarding 100-percent renewables.”