The Transformation of our Generation Portfolio
RWE has invested £3.4 billion in the UK over the past three years, building new, low-carbon energy infrastructure and improving the environmental performance of our existing assets.
No one technology or fuel can be relied upon to adequately balance the triple challenge of radically reducing carbon emissions from our energy generation whilst maintaining security of supply at an affordable cost to the customer. At RWE, we believe that we can only achieve this through diversity.
RWE npower, along with our sister RWE companies in the UK, aims to build a diverse portfolio of power generation technologies in the UK and new investments build on this diversity, creating an efficient and low carbon range of generating assets across the country.
Gas
Gas is one of the most efficient generating technologies and its high degree of flexibility is crucial for maintaining a secure and constant supply of electricity. Modern gas-fired power stations have an important role to play in the future of energy in the UK by being the back-up for intermittent renewable generation, such as wind power.
We operate four modern combined cycle gas turbine (CCGT) power stations across the UK. In 2011, construction continued at our Pembroke Power Station in Wales. The state-of-the-art technology will produce electricity for 3.5 million households and with a generating capacity of 2,000MW, it will be one of the largest and most efficient gas-fired stations in Europe.
In 2011, the Environment Agency granted an Environmental Permit for the operation of Pembroke Power Station. Whilst determining our permit application, the Environment Agency considered a number of local opinions and concerns and engaged in consultation with environmental groups as part of the permitting process.
At Pembroke, as with any of our major developments, we have undertaken extensive work to ensure no significant environmental impact will arise as a result of the station’s operations. The Environment Agency was satisfied that we met the required measures and conditions, and the environmental permit was granted in November 2011. We will adhere to its strict limits and conditions and report on our adherence on a regular basis. Now the station is fully permitted, we have begun commissioning the plant and aim to be fully operational by the end of 2012.
Projects in Development: Willington
We are also progressing a development option for a potential new gas-fired power station at Willington, Derbyshire. If built, the new power station would sit on the site of an old coal-fired power station and would make a significant contribution to the UK's energy supply, whilst helping to cut CO2 emissions.
In 2011, we received planning consent to develop a 2,000MW new combined-cycle gas turbine (CCGT) gas-fired power station and up to 400MW of open-cycle gas turbine (OCGT) plant, which would be used to provide additional capacity at times of peak demand. A gas pipeline would need to be constructed to bring natural gas fuel to the site. Proposals for a new gas pipeline needed to operate the CCGT power station are currently being developed and a consent application for the pipeline will be submitted to the Infrastructure Planning Commission (IPC) during 2012.
Coal and Oil
We haven’t built a new coal or oil-fired plant in over 40 years and more efficient and cleaner technology has changed the role that these types of power stations play in the UK energy market. Coal-fired power stations run more often in winter than in the summer and oil fired-stations now fulfil a critical role in keeping the system balanced during times of peak demand, although they are occasionally used to run as baseload.
RWE npower currently operates two coal-fired power stations in the UK. As a result of our conversion of Tilbury Power Station to run on biomass and the closure of Didcot A under the LCPD, by the end of 2015 our power station in Aberthaw, Wales, will be the only coal-fired station in our portfolio.
The Large Combustion Plant Directive (LCPD) came into effect on 1 January 2008. It enforces strict environmental compliance, setting limits for the amount of sulphur dioxide (SO2), nitrogen oxides (NOx) and dust particulates that each coal or oil-fired plant can emit.
All our coal and oil-fired power stations in the UK have complied either by ‘opting in’ and meeting these limits, or ‘opting out’ and reducing their operating time and life span. Aberthaw Power Station is opted in and we have invested in new equipment to meet the new SO2 limits. In addition, a 3MW carbon capture pilot plant is under construction at the site, to test new technology to remove CO2 from the flue gases.
We’ve opted out our coal stations, Didcot A and Tilbury B and our oil-fired stations at Fawley and Littlebrook, meaning these four stations will close by the end of 2015 at the latest. During the course of 2011 Tilbury B was converted from a coal-fired station to run on 100% sustainable biomass for the rest of its life.
Nuclear Power
We believe that the UK’s energy challenges cannot be overcome without all low carbon technologies working together, including both renewable and nuclear power, to ensure that carbon targets are met and affordable and secure energy is supplied.
In 2009, RWE formed Horizon Nuclear Power, a joint venture with E.ON UK, to explore the possibility of building new nuclear power stations in the UK, given the right market conditions and final shareholder investment decisions.
Horizon acquired two proposed sites for development: the first at Wylfa, on the Isle of Anglesey in North Wales, and the second at Oldbury-on-Severn, in Gloucestershire. In 2010, under the Government’s Nuclear National Policy Statements, both of the proposed sites were listed as appropriate for development as nuclear stations.
However, since the formation of the joint venture a number of factors have changed and in March 2012, both RWE and E.ON conducted a strategic review of capital projects and made the decision not to progress with the development of new nuclear through Horizon.
Primarily, the global economic climate means that capital for large-scale projects is at a premium, particularly for projects such as new nuclear build, with very long lead times and payback periods.
The decision in Germany in 2011 to phase out nuclear power and introduce an accelerated decommissioning of nuclear plants has had a significant financial impact on both RWE and E.ON. RWE has adopted a number of measures, including divestments, efficiency enhancements, and also a leaner capital expenditure budget, resulting in the strategic review of forthcoming projects.
We still believe that new nuclear power has a key part to play in the move to a low-carbon economy and will have an important role in the future energy mix. We hope to find new investors in the Horizon project so that the development work already delivered and the positive support in local communities for the new nuclear sites can be continued.
Renewable Energy
The UK has a target to generate 15% of its energy from renewable sources by 2020. Our sister company, RWE Innogy, is one of Europe’s leading renewable energy companies, at the forefront of operating and developing new technologies across the UK and is well placed to make a major contribution to achieving this target.
In 2011, RWE npower renewables - the UK arm of RWE Innogy - generated a total of 1,581GWh of electricity from renewable sources in the UK.
RWE’s UK renewables portfolio
RWE npower renewables’ current operating portfolio consists of:
- 50 renewable energy projects throughout the UK, with capacity ranging from 0.1MW of hydro power in Cynwyd in Wales, to 92MW of wind power at Farr in Scotland;
- 511MW installed capacity of onshore wind power;
- 150MW installed capacity of offshore wind power;
- 69MW installed capacity of hydro power;
- In addition we own a 50% stake of the 504MW Greater Gabbard offshore wind farm.
The portfolio continues to grow, with 760MW of projects under construction, including Gwynt y Môr, one of the largest offshore wind farms under construction in Europe – due to be fully operational in 2014. The wind farm will provide enough energy for around 400,000 homes.
RWE npower: Tilbury Biomass
At RWE npower we are continually developing innovative, strategic options to further improve our generation portfolio. In 2011, our Tilbury B Power Station was converted from a coal-fired power station to run on 100% biomass fuel, using sustainably sourced renewable wood pellets. The new capacity of the station following the conversion is 750MWe. It will supply enough energy to power over 1.5million homes over the remainder of its lifetime under the LCPD.
The conversion of Tilbury to run on sustainable biomass will have a big impact on the UK’s ability to meet its climate change targets. It will deliver 10% of the UK’s total renewable energy output – and, as a flexible technology, it will be able to deliver generation on demand. The station will continue to run on biomass until the end of 2015 or when the remainder of its permitted 20,000 hours of operation under the LCPD have been used.
The sustainability of wood pellets sourced for Tilbury will be independently assured under accredited schemes, such as the Green Gold Label sustainable biomass programme. This is an independently certified system for sustainable biomass and covers the entire lifecycle of biomass, from production, to processing, transport and delivery. The strict sustainability standards apply across the supply chain. Throughout the conversion we have also undertaken a programme of discussion with key stakeholders to ensure that our management of sustainability issues is of the highest quality.
The green house gas emissions savings will be at least 70% compared to using coal, with significantly lower SO2 and NOx. The conversion from coal to biomass at our Tilbury Power Station will also provide an excellent opportunity to allow more detailed study of the use of this low carbon fuel on a large scale, as well as allowing the formation of fledgling supply chain.
We are continuing to develop a range of options for the future of the Tilbury site after 2015, including the potential development of biomass options for the site.
