Europe can save $58 billion by deploying renewable energy

Siemens has analyzed the electrical power producing systems across Europe and identified considerable potential for optimization, especially in connection with plans to expand power generation from renewable energy sources.

If installations were built at the sites in Europe that offer the highest power yields, some $58 billion of investment in renewables could be saved by 2030. This figure already includes the associated extension of the power grid.

As a comparison: around $12.8 billion were invested in new solar and wind power generating installations in Germany in 2012.

In an ongoing study, Siemens is working in cooperation with the Technical University of Munich to examine energy systems worldwide with the aim of ascertaining their rate of resource use, reliability of supply, sustainability and cost-efficiency.

Based on the realization that billions are being wasted every year as a result of inefficiencies in worldwide energy systems and markets, the study intends to precisely identify and quantify these losses, and to propose solutions.

Siemens has spotlighted four main levers for optimizing energy systems worldwide that can be more or less effective depending on the regional characteristics of the power grids and the power plant fleet:

1. Local optimization of renewable power installations: This means exploiting regional power generation potentials to the full, and involves finding the best sites for solar installations, hydropower storage facilities and wind power farms, and expanding the grids to match.

2. Enhancing the efficiency of the power system as a whole: For instance, the average efficiency of coal-fired power plants in Europe is only 38 percent, whereas modern plants can reach up to 46 percent. Installing more efficient electrical equipment in industry and households would cut carbon dioxide emissions and costs even further.

3. Improvements in the power plant mix: Switching from coal fuel to gas-fired power plants would considerably reduce the volumes of carbon dioxide emitted by conventional power generation. This alone implies an annual carbon dioxide savings potential of 365 million tons in Europe. That is equivalent to half of all emissions in Germany.

4. More use of electric power for energy needs: Instead of generating power locally at low efficiency and burning oil and natural gas to heat buildings, power could be generated more efficiently in large-scale power plants, and high-efficiency electrical heating systems could be used in thermally insulated houses — at least in regions with broad-scale power grid coverage.

Energy systems around the world vary broadly owing to their regional conditions, and are constantly changing. Norway, for instance, thanks to its favorable topology, can rely almost exclusively on hydropower. At the same time it is a major producer of natural gas, most of which it exports. By contrast, very little of its abundant hydropower is presently exported via long-distance transmission lines, despite the great demand for imbalance (i.e. balancing) energy in many countries of Europe.

Looking to the future, Great Britain and Germany have opted for large-scale use of renewable energy resources for their power systems. The UK intends to expand its offshore wind power capacity to meet one quarter of its power demand by 2020, while in Germany wind power’s share is to rise to 15 percent by 2030. Germany wants to generate 80 percent of its power from renewable sources by 2050. Wide fluctuations in power generation due to changing weather conditions thus dictate that large-scale energy storage or high-capacity exchange arrangements with other countries are in place.

The United States is currently experiencing an unprecedented natural gas boom because the high-pace exploitation of non-conventional deposits is making local natural gas up to two-thirds cheaper than in Europe. Gas-fired power plants are thus set to play a major role in U.S. power generation in the future.

The U.S. may even be on its way to changing from one of the biggest importers to one of the biggest exporters of fossil fuels. In Asia, by contrast, due to the already high and still growing demand for energy and because of the region’s strong dependence on imports, natural gas is currently about five times as expensive as in the U.S

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