EBOOK electrical energy generation in europe (jorge morales pedraza)

One of the books wasdedicated to the use of oil, natural gas, and coal for generation of electricity, and thesecond to the use of different renewable and nuclear energy sources for the s

The Current and Future Role of

Conventional Energy Sources in the Regional Generation of Electricity

Electrical Energy Generation in Europe

Jorge Morales Pedraza

Electrical Energy Generation

in Europe

The Current and Future Role

of Conventional Energy Sources

in the Regional Generation of Electricity

123

Austria

ISBN 978-3-319-08400-8 ISBN 978-3-319-08401-5 (eBook)

DOI 10.1007/978-3-319-08401-5

Library of Congress Control Number: 2014950679

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The preparation of a book has always been a complex and challenging task This isthe third book on energy matters that I have had the opportunity to prepare Thefirsttwo books were dedicated to the use of different energy sources for generation ofelectricity in Latin America and the Caribbean region One of the books wasdedicated to the use of oil, natural gas, and coal for generation of electricity, and thesecond to the use of different renewable and nuclear energy sources for the samepurpose This book is thefirst of two books dedicated to the use of conventional andnonconventional energy sources for the generation of electricity in the Europeanregion In this particular book, the role of oil, natural gas, and coal in the regionalgeneration of electricity is presented

Providing a stable and secure supply of energy is a great challenge for ernments seeking to achieve sustainable development goals, since the main energysources providing economic growth and social development are present in the Earthonly in specific locations and in limited quantities Energy is, undoubtedly, animportant element in the struggle of any country to alleviate poverty, promoteeconomic growth, and foster social development But as the world consumes moreand more energy, stress is placed on current level of energy reserves and theenvironment at national, regional, and international levels

gov-The world should work together to safeguard the environment without slowingsocioeconomic development Third World countries should look for adequatetechnological solutions in order to change present unsustainable patterns of con-sumption and production in developed countries and to seek the low-hanging fruitand the win–win solutions that provide the least costly ways of achieving sus-tainable development goals

The book hasfive chapters Chapter1gives the readers a general overview of thecurrent situation and the future role that could be played by oil, natural gas, and coal

in generation of electricity in the European region According to different expert’sopinions, the use of energy at world level will continue to increase gradually until

2030 According to studies made by the French Association of Oil Professionals, it

is expected that for 2030, the world energy demand will be double and it isprobably that could be triple for 2050 Until 2030, the primary energy demand at

v

world level is expected to increase annually at 1.7 %, which is somehow smallerthan the world growth of 2.1 % registered during the past three decades It is alsoexpected that 90 % of the increase in the world energy demand in the comingdecades will be satisfied with fossil fuels If this forecast is true, then around 15,

300 million tons of oil equivalent (112,500 million of barrels of oil) will be sumed at world level in 2030 Electricity production will account for 32 % of totalglobal fossil fuel use

con-In the specific case of Europe, fossil fuels such as oil, natural gas, and coal are byfar the largest sources of energy and are widely projected to dominate the Europeanenergy mix through to at least 2030 The European Commission’s Energy Roadmap

2050 identifies natural gas as a critical fuel for the transformation of the energysystem The substitution of coal and oil to natural gas in the short to medium termscould help to reduce emissions with existing technologies until at least 2030–2035

In Europe, the net growth in the past 11 years of natural gas power (118.2 GW),wind power (75.2 GW), and solar photovoltaic (26.4 GW) was at the expense offuel oil (down 13.2 GW), coal (down 9.5 GW) and nuclear energy (down 7.6 GW)

In the specific case of the EU power sector, countries continue to replace ageingfuel oil, coal, and nuclear power plants with modern technology, while at the sametime increasing its total installed capacity to meet the increasing energy demand inthe coming years

Chapter 2 provides readers with the latest information about the current andfuture role to be played by oil for generation of electricity in the European region.World use of petroleum and other liquid fuels is expected to grow from 85.7 millionbarrels per day in 2008 to 97.6 million barrels per day in 2020 and 112.2 millionbarrels per day in 2035; this represents an increase of 14.9 % with respect to 2008

It is important to highlight that most of the growth in liquid fuel use is in thetransportation sector, where, in the absence of significant technological advances,liquid fuels will continue to provide much of the energy consumed at least duringthe coming decades For the time being, liquid fuels remain an important energysource for transportation and industrial sector processes Despite rising fuel prices,the use of liquid fuels for transportation purposes is expected to increase by anaverage of 1.4 % per year or 46 % during the period 2008–2035 The transportationsector will account for 82 % of the total increase in liquid fuel use from 2008 to

2035, with the remaining portion of the growth attributable to the industrial sector.The use of liquid fuel is expected to decline in the other end-use sectors, particularlyfor electric power generation during the coming years

To meet the increase in world demand, liquid fuels production (including bothconventional and nonconventional liquid fuel supplies) should increase by a total of26.6 million barrels per day from 2008 to 2035 With the aim to meet this fore-seeable increase, OPEC countries will invest in incremental production capacity inorder to maintain a share of approximately 40 % of total world liquid fuels pro-duction through 2035, consistent with their share over the past 15 years Increasingvolumes of conventional liquids (crude oil and lease condensate, natural gas plantliquids, and refinery gain) from OPEC producers are expected to contribute 10.3million barrels per day to the total increase in world liquid fuels production during

the coming years, while conventional supplies from non-OPEC countries isexpected to add another 7.1 million barrels per day during the same period.The ten top crude oil exporters in 2012 exported 32,618,000 barrels per day.Within this group, there are only two European countries (Russia with 22.1 % andNorway with 5.2 % of the world total) The ten top importers of crude oil in 2012imported 30,462,000 barrels per day of crude oil Within this group, there are fourEuropean countries (Germany, Italy, France, and Spain).

Chapter3 provides readers the latest information on the world total natural gasproduction, consumption, import and export Natural gas continues to be the fuel ofchoice in many regions of the world, particularly in the electric power and industrialsectors The reason is in part because of its lower carbon intensity compared withcoal and oil, which makes it an attractive fuel source in countries where govern-ments are implementing policies to reduce greenhouse gas emissions, and alsobecause of its significant price discount relative to oil in many regions In addition,

it is an attractive alternative fuel for new power generation plants because of lowcapital costs and favorable thermal efficiencies In the IEO (2011), total worldnatural gas consumption for industrial uses is expected to increase by an average of1.7 % per year through 2035, and consumption in the electric power sector isexpected to grow by 2 % per year during the same period The industrial andelectric power sectors together account for 87 % of the total projected increase innatural gas consumption

There are enough reserves of natural gas to satisfy the foreseeable demandduring the coming decades According to EIA sources, the world’s total natural gasreserves in 2012 were estimated at 1,317,482 trillion m3(6,844.595 trillion cubicfeet) The world’s total natural gas consumption is expected to increase by 1.6 %per year on average, from 111 trillion cubic feet (3,919.965 billion m3) in 2008 to

169 trillion cubic feet (5,968.235 billion m3) in 2035; this represents an increase of52.2 % with respect to 2008 Increasing supplies of nonconventional natural gas,particularly in North America, but elsewhere as well, will help to keep globalmarkets well supplied

Chapter4provides readers the latest information on the world coal consumption,which is expected to increase by 50.3 %, from 139 quadrillion Btu in 2008 to

2009 quadrillion Btu in 2035; this represents an increase of 50.3 % In the case ofworld coal consumption, it is expected to increase at an average rate of 1.5 % peryear from 2008 to 2035, but the growth rates by region will be uneven, with totalcoal consumption in OECD countries remaining near 2008 levels and coal con-sumption in non-OECD countries increasing at a pace of 2.1 % per year As a result,increased use of coal in non-OECD countries accounts for nearly all the growth inworld coal consumption over the period

In 2008, coal accounted for 28 % of world energy consumption Of the total coalproduced worldwide in 2008, 60 % was shipped to electricity producers and 36 %

of industrial consumers, with most of the remainder going to consumers in theresidential and commercial sectors According to the IEO (2011), coal’s share oftotal world energy consumption is expected to remain relatively big throughout the

period 2010–2035, declining slightly from a peak of 29 % in 2010 to 27 % in 2015,where it is expected to remain through 2035.

Coal was the main energy source not only in Europe, but also worldwide untilthe 1960s Owing to advances in oil extraction, conversion, and application tech-nologies, coal then began to lose market share to oil The entry of natural gas andnuclear power into the energy market at the beginning of the 1970s put furtherpressure on the use of coal for generation of electricity As a result, despite therising energy demand, gross coal consumption in the EU-15 has been decliningsince 1970, while the share of coal in gross inland energy consumption has morethan halved, from more than 30 % to approximately 15 % In contrast, coal retained

a 25 % share in gross inland energy consumption globally over the period

1970–2000

However, in recent years there is renewed interest in the use of coal in the EU, aswell as in other countries within and outside the European region for differentpurposes, based on a wide perception that coal is an abundant, widely available,cheap, affordable, and reliable energy source

Chapter5includes a summary of the main issues includes in previous chapters

Jorge Morales Pedraza

During the preparation of the present book different professionals assisted me in thecompilation of relevant information regarding the current and future role of fossilfuels in generation of electricity in the European region My lovely daughter LisetteMorales Meoqui, M.Sc has been an extremely helpful assistant in collecting thenecessary information and reference materials used in the preparation of the book,

in addition of her current job as Head of Finance in the Austrianfirm Zeno TrackGmbH My dear son Jorge Morales Meoqui, now a Doctor in Economics, has beenalso extremely helpful in the revision of some of the initial materials used duringthe preparation of the book

Without any doubt, the present book is a reality thanks to the valuable support of

my lovely wife, Aurora Tamara Meoqui Puig, who had assumed other familyresponsibilities in order to give me the indispensable time and the adequate envi-ronment to write the book

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1 General Overview 1

1.1 Introduction 1

1.2 Liquid Fuels 4

1.2.1 Crude Oil 5

1.3 Natural Gas 8

1.4 Coal 15

1.5 Energy Dependency 20

1.6 Electricity Generation 21

1.6.1 Impact of the Economic and Financial Crisis in Generation of Electricity 26

1.6.2 The Use of Oil for Electricity Generation 30

1.6.3 The Use of Natural Gas for Electricity Generation 31

1.6.4 The Use of Coal for Electricity Generation 32

1.6.5 Market Concentration in the Liberalized Power Generation Markets in Europe 35

1.6.6 Electricity Generation Cost 36

1.6.7 The Situation of the Energy Sector in the European Region 40

1.7 Security of Supplies 42

1.8 Investment in Energy Infrastructure 43

1.9 Environmental Impact 46

1.10 Energy Efficiency 47

1.11 Energy Savings 48

1.12 Access to Modern Energy Technology 49

1.13 European Internal Energy Market 49

1.13.1 Integrating National Markets 51

1.14 New Initiatives 61

References 61

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2 The Role of Oil in the Regional Electricity Generation 65

2.1 General Overview 65

2.2 Reserves, Production, and Consumption of Crude Oil in Europe 70

2.3 Oil Pipelines 73

2.3.1 Oil Pipelines Within the EU 74

2.3.2 New Pipelines and Supply Routes for Oil 75

2.4 Oil Demand in the Transportation, Industrial, and Electricity Generation Sectors 78

2.5 Oil Price Evolution 79

2.6 The Participation of Oil in the Energy Balance in the European Region 80

2.7 Future Trends 82

2.8 Austria 83

2.8.1 Crude Oil Reserves 84

2.8.2 Production and Consumption of Oil 84

2.8.3 Import and Export of Oil 85

2.8.4 Electricity Generation and Consumption 85

2.8.5 Import and Export of Electricity 87

2.9 Belgium 88

2.9.1 Crude Oil Reserves 88

2.9.2 Production and Consumption of Oil 88

2.9.3 Export and Import of Oil 89

2.9.4 Electricity Generation and Consumption 90

2.9.5 Import and Export of Electricity 91

2.10 Bulgaria 91

2.10.1 Crude Oil Reserves 92

2.10.2 Production and Consumption of Oil 92

2.10.3 Import and Export of Oil 92

2.10.4 Electricity Generation and Consumption 94

2.11 Croatia 95

2.11.1 Crude Oil Reserves 96

2.11.2 Production and Consumption of Oil 96

2.11.3 Import and Export of Oil 96

2.11.4 Electricity Generation and Consumption 97

2.12 Czech Republic 98

2.12.1 Crude Oil Reserves 99

2.12.2 Production and Consumption of Oil 99

2.12.3 Import and Export of Oil 100

2.12.4 Electricity Generation and Consumption 101

2.12.5 Import and Export of Electricity 102

2.13 Denmark 103

2.13.1 Crude Oil Reserves 104

2.13.2 Production and Consumption of Oil 104

2.13.3 Import and Export of Oil 105

2.13.4 Electricity Generation and Consumption 106

2.13.5 Import and Export of Electricity 107

2.14 Finland 108

2.14.1 Crude Oil Reserves 109

2.14.2 Production and Consumption of Oil 109

2.14.3 Import and Export of Oil 110

2.14.4 Electricity Generation and Consumption 110

2.14.5 Export and Import of Electricity 112

2.15 France 113

2.15.1 Crude Oil Reserves 113

2.15.2 Production and Consumption of Oil 114

2.15.3 Import and Export of Oil 115

2.15.4 Electricity Generation and Consumption 115

2.15.5 Import and Export of Electricity 116

2.16 Germany 117

2.16.1 Crude Oil Reserves 118

2.16.2 Production and Consumption of Oil 118

2.16.3 Export and Import of Oil 119

2.16.4 Electricity Generation and Consumption 121

2.16.5 Export and Import of Electricity 123

2.17 Greece 124

2.17.1 Crude Oil Reserves 125

2.17.2 Production and Consumption of Oil 125

2.17.3 Export and Import of Oil 125

2.17.4 Electricity Generation and Consumption 126

2.17.5 Export and Import of Electricity 128

2.18 Hungary 128

2.18.1 Crude Oil Reserves 130

2.18.2 Production and Consumption of Oil 130

2.18.3 Export and Import of Oil 132

2.18.4 Electricity Generation and Consumption 132

2.18.5 Export and Import of Electricity 134

2.19 Italy 135

2.19.1 Crude Oil Reserves 136

2.19.2 Production and Consumption of Oil 137

2.19.3 Import and Export of Oil 138

2.19.4 Electricity Generation and Consumption 139

2.20 Norway 142

2.20.1 Crude Oil Reserves 142

2.20.2 Production and Consumption of Oil 143

2.20.3 Electricity Generation and Consumption 145

2.20.4 Export and Import of Electricity 146

2.21 Poland 146

2.21.1 Energy Policy 147

2.21.2 Crude Oil Reserves 148

2.21.3 Production and Consumption of Oil 148

2.21.4 Import and Export of Oil 149

2.21.5 Electricity Generation and Consumption 150

2.21.6 Import and Export of Electricity 151

2.22 Portugal 151

2.22.1 Crude Oil Reserves 152

2.22.2 Consumption of Oil 152

2.22.3 Import and Export of Oil 153

2.22.4 Electricity Generation and Consumption 154

2.22.5 Import and Export of Electricity 155

2.23 Romania 157

2.23.1 Crude Oil Reserves 158

2.23.2 Production and Consumption of Oil 158

2.23.3 Import and Export of Oil 160

2.23.4 Electricity Generation and Consumption 160

2.23.5 Import and Export of Electricity 162

2.24 Russian Federation (Russia) 163

2.24.1 The New Energy Strategy 163

2.24.2 Crude Oil Reserves 167

2.24.3 Crude Oil Fields 168

2.24.4 Production and Consumption of Oil 170

2.24.5 Export and Import of Oil 172

2.24.6 Electricity Generation and Consumption 174

2.25 Spain 179

2.25.1 Crude Oil Reserves 180

2.25.2 Production and Consumption of Oil 180

2.25.3 Import and Export of Oil 181

2.25.4 Electricity Generation and Consumption 182

2.25.5 Export and Import of Electricity 183

2.26 Slovenia 184

2.26.1 Crude Oil Reserves 185

2.26.2 Consumption of Oil 185

2.26.3 Electricity Generation and Consumption 186

2.26.4 Export and Import of Electricity 188

2.27 Sweden 188

2.27.1 Crude Oil Reserves 189

2.27.2 Production and Consumption of Oil 189

2.27.3 Import of Oil 190

2.27.4 Electricity Generation and Consumption 190

2.27.5 Import and Export of Electricity 191

2.28 The Netherlands 192

2.28.1 Energy Policy and Energy Efficiency 193

2.28.2 Crude Oil Reserves 194

2.28.3 Production and Consumption of Oil 194

2.28.4 Import and Export of Oil 196

2.28.5 Electricity Generation and Consumption 197

2.28.6 Import and Export of Electricity 198

2.29 United Kingdom 199

2.29.1 Crude Oil Reserves 200

2.29.2 Production and Consumption of Oil 200

2.29.3 Import and Export of Oil 202

2.29.4 Oil Fields 203

2.29.5 Investment in the Energy Sector 204

2.29.6 Electricity Generation and Consumption 204

2.29.7 Import and Export of Electricity 207

References 208

3 The Role of Natural Gas in the Regional Electricity Generation 211

3.1 General Overview 211

3.2 Natural Gas Reserves 215

3.3 Natural Gas Network 217

3.3.1 Natural Gas Pipelines Within the EU 221

3.3.2 New Pipelines and Supply Routes for Natural Gas 221

3.4 Increase in the Use of Natural Gas Within the European Region 224

3.5 Natural Gas Production 225

3.6 Natural Gas Consumption 227

3.6.1 Natural Gas Demand in the Industrial Sector 231

3.7 Natural Gas Trade 233

3.7.1 Import and Export of Natural Gas 235

3.8 Natural Gas Prices in Europe 237

3.9 Natural Gas Security 240

3.10 Unconventional Gas 240

3.10.1 Shale Gas 240

3.10.2 Tight Gas 243

3.10.3 Coalbed Methane 244

3.11 Liquefied Natural Gas 245

3.12 Investment in the Natural Gas Sector 246

3.13 Use of Natural Gas for Electricity Generation 248

3.14 Transparency 252

3.15 Long-Term Gas Transmission and Downstream Contracts 252

3.16 Access to Gas Storage Facilities 253

3.17 Environmental Impact 253

3.18 Future Trends 253

3.19 Austria 255

3.19.1 Natural Gas Reserves 256

3.19.2 Production and Consumption of Natural Gas 256

3.19.3 Import and Export of Natural Gas 257

3.19.4 Electricity Generation and Consumption 258

3.20 Belgium 258

3.20.1 Natural Gas Reserves 259

3.20.2 Production and Consumption of Natural Gas 259

3.20.3 Import and Export of Natural Gas 260

3.20.4 Electricity Generation 260

3.21 Croatia 262

3.21.1 Natural Gas Reserves 263

3.21.2 Production and Consumption of Natural Gas 263

3.21.3 Import and Export of Natural Gas 264

3.21.4 Electricity Generation 265

3.22 Czech Republic 266

3.22.1 Natural Gas Reserves 267

3.22.2 Production and Consumption of Natural Gas 268

3.22.3 Import and Export of Natural Gas 269

3.22.4 Electricity Generation 271

3.23 Denmark 272

3.23.1 Natural Gas Reserves 273

3.23.2 Shale Gas 273

3.23.3 Production and Consumption of Natural Gas 274

3.23.4 Export and Import of Natural Gas 275

3.23.5 Electricity Generation 276

3.24 Finland 277

3.24.1 Natural Gas Reserves 278

3.24.2 Production and Consumption of Natural Gas 278

3.24.3 Import of Natural Gas 279

3.24.4 Electricity Generation 279

3.25 France 280

3.25.1 Natural Gas Reserves 280

3.25.2 Shale Gas 280

3.25.3 Production and Consumption of Natural Gas 281

3.25.4 Import and Export of Natural Gas 282

3.25.5 Electricity Generation 283

3.26 Germany 283

3.26.1 Natural Gas Reserves 284

3.26.2 Shale Gas 284

3.26.3 Production and Consumption of Natural Gas 285

3.26.4 Import and Export of Natural Gas 286

3.26.5 Electricity Generation 287

3.27 Greece 288

3.27.1 Natural Gas Reserves 289

3.27.2 Production and Consumption of Natural Gas 289

3.27.3 Import of Natural Gas 289

3.27.4 Electricity Generation 290

3.28 Hungary 291

3.28.1 Natural Gas Reserves 292

3.28.2 Tight Gas 292

3.28.3 Production and Consumption of Natural Gas 293

3.28.4 Import and Export of Natural Gas 294

3.28.5 Electricity Generation 295

3.29 Italy 296

3.29.1 Natural Gas Reserves 296

3.29.2 Production and Consumption of Natural Gas 296

3.29.3 Liquefied Natural Gas 297

3.29.4 Import and Export of Natural Gas 298

3.29.5 Electricity Generation 299

3.30 Norway 300

3.30.1 Natural Gas Reserves 301

3.30.2 Production and Consumption of Natural Gas 301

3.30.3 Export and Import of Natural Gas 302

3.30.4 Electricity Generation 304

3.31 The Netherlands 304

3.31.1 Natural Gas Reserves 305

3.31.2 Shale Gas 305

3.31.3 Production and Consumption of Natural Gas 306

3.31.4 Import and Export of Natural Gas 307

3.31.5 Gas Pipelines, LNG, and Other Storage Facilities 308

3.31.6 Electricity Generation 308

3.32 The Russian Federation (Russia) 309

3.32.1 Energy Savings 310

3.32.2 Natural Gas Reserves 311

3.32.3 Production and Consumption of Natural Gas 311

3.32.4 Gas Fields, Pipelines, and LNG Facilities 312

3.32.5 Import and Export of Natural Gas 316

3.32.6 Electricity Generation 318

3.33 Poland 319

3.33.1 Natural Gas Reserves 320

3.33.2 Production and Consumption of Natural Gas 320

3.33.3 Shale and Tight Gas 321

3.33.4 Natural Gas Fields and LNG Facilities 321

3.33.5 Import and Export of Natural Gas 323

3.34 Electricity Generation 324

3.35 Portugal 325

3.35.1 Integration of Natural Gas Market 327

3.35.2 Natural Gas Reserves 328

3.35.3 Consumption of Natural Gas 328

3.35.4 Import and Export of Natural Gas 329

3.35.5 Electricity Generation 330

3.36 Slovak Republic (Slovakia) 330

3.36.1 Natural Gas Reserves 331

3.36.2 Production and Consumption of Natural Gas 331

3.36.3 Import and Export of Natural Gas 333

3.36.4 Electricity Generation 334

3.37 Spain 334

3.37.1 Natural Gas Reserves 335

3.37.2 Production and Consumption of Natural Gas 335

3.37.3 Import and Export of Natural Gas 337

3.37.4 Electricity Generation 338

3.38 Sweden 339

3.38.1 Natural Gas Reserves 339

3.38.2 Shale Gas 339

3.38.3 Production and Consumption of Natural Gas 340

3.38.4 Import and Export of Natural Gas 340

3.38.5 Electricity Generation 341

3.39 United Kingdom 341

3.39.1 Natural Gas Reserves 342

3.39.2 Shale Gas 342

3.39.3 Production and Consumption of Natural Gas 344

3.39.4 Natural Gas Fields 345

3.39.5 Import and Export of Natural Gas and LNG 346

3.39.6 LNG Facilities 347

3.39.7 Electricity Generation 347

References 349

4 The Role of Coal in the Regional Electricity Generation 351

4.1 General Overview 351

4.2 World Coal Reserves 353

4.3 Low Coal Technologies 356

4.4 Coal Production 358

4.5 Increase in the Consumption of Coal 359

4.6 Import of Coal 362

4.7 Export of Coal 364

4.8 The CO2Emissions 365

4.9 Participation of Coal in Electricity Generation 367

4.10 Investment in the Coal Sector 371

4.11 Energy Efficiency 371

4.11.1 Energy Efficiency Measures Adopted in the South East Subregion 372

4.12 Perspective on the Use of Coal for Electricity Generation 373

4.13 Austria 375

4.13.1 Production, Consumption and Reserves of Coal 375

4.13.2 Import and Export of Coal 376

4.13.3 Electricity Generation 377

4.14 Belgium 378

4.14.1 Coal Reserves 379

4.14.2 Production and Consumption of Coal 379

4.14.3 Export and Import of Coal 380

4.14.4 Electricity Generation 381

4.15 Croatia 381

4.15.1 Coal Reserves 382

4.15.2 Production, Consumption, Export and Import of Coal 382

4.15.3 Electricity Generation 382

4.16 Czech Republic 382

4.16.1 Coal Reserves 384

4.16.2 Production and Consumption of Coal 384

4.16.3 Import and Export of Coal 386

4.16.4 Electricity Generation 386

4.17 Denmark 387

4.17.1 Coal Reserves 388

4.17.2 Production and Consumption of Coal 388

4.17.3 Import and Export of Coal 389

4.17.4 Electricity Generation 390

4.18 Finland 390

4.18.1 Coal Reserves 391

4.18.2 Production and Consumption of Coal 391

4.18.3 Import and Export of Coal 391

4.18.4 Electricity Generation 392

4.19 France 393

4.19.1 Coal Reserves 393

4.19.2 Production and Consumption of Coal 394

4.19.3 Import and Export of Coal 394

4.19.4 Electricity Generation 395

4.20 Germany 396

4.20.1 Production, Consumption and Reserves of Coal 396

4.20.2 Coal Mines 397

4.20.3 Import and Export of Coal 398

4.20.4 Electricity Generation 399

4.21 Greece 400

4.21.1 Production, Consumption and Reserves of Coal 401

4.21.2 Import and Export of Coal 402

4.21.3 Electricity Generation 403

4.22 Hungary 403

4.22.1 Coal Reserves 404

4.22.2 Production and Consumption of Coal 404

4.22.3 Import and Export of Coal 405

4.22.4 Electricity Generation 406

4.23 Italy 407

4.23.1 Production, Consumption and Reserves of Coal 407

4.23.2 Import and Export of Coal 408

4.23.3 Electricity Generation 409

4.24 Poland 409

4.24.1 Production, Consumption and Reserves of Coal 410

4.24.2 Import and Export of Coal 411

4.24.3 Investment in the Energy Sector 412

4.24.4 Electricity Generation 412

4.25 Russian Federation (Russia) 413

4.25.1 The New Coal Strategy 417

4.25.2 Production, Consumption and Reserves of Coal 418

4.25.3 Import and Export of Coal 421

4.25.4 Electricity Generation 424

4.26 The United Kingdom 425

4.26.1 Production, Consumption and Reserves of Coal 425

4.26.2 Import and Export of Coal 426

4.26.3 Electricity Generation 428

References 428

5 Conclusion 431

5.1 Liquid Fuels 432

5.1.1 Crude Oil 433

5.2 Natural Gas 436

5.3 Coal 440

References 446

About the Author

Jorge Morales PedrazaCurrently works as an Independent Consultant on national Affairs and possesses degrees on Mathematic and in Economic Sciences.Formerly, he was a Cuban Ambassador for more than 25 years In the 1980s,Morales Pedraza was appointed as Ambassador and Permanent Representative ofCuba to the International Atomic Energy Agency (IAEA) and in the 1990s gainedthe same title with the Organization for the Prohibition of Chemical Weapons(OPCW) In addition, he was Invited University Professor in Mathematics Scienceand an Invited Professor for International Relations in the Diplomatic Academy ofCuba Throughout the 1990s and into the 2000s Morales Pedraza worked for theIAEA as Senior Manager in the Director’s office Over the past years he wasinvolved in the preparation, as author and coauthor, of more than 60 articles pub-lished by international publishers houses, as well as 10 chapters for various booksfocusing on the peaceful uses of nuclear energy, renewable and conventional energy,the use of the radiation for sterilization of tissues, tissue banking,financial invest-ment, among other topics During this period he also authored 7 books and wasinvited editor for international journals Morales Pedraza is a member of the editorialteams of 5 specialized international journals

Inter-E-mail: jmorales47@hotmail.com or jmorales547@yahoo.com

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Energy constitutes the motive force of civilization and it determines, to a highdegree, the level of economic and social development of the countries Despite theincreased use of different types of energy sources, particularly renewable energysources, fossil fuels are, and will continue to be, the dominant type of energysource within the world energy mix for many countries However, it is important toknow that fossil fuel reserves are declining, particularly oil reserves, and thissituation would have a negative impact in the future economic and socialdevelopment of many countries from all regions The limited fossil fuel reserves,the negative impact on the environment due to the use of this type of energy sourcefor electricity generation, and the high price of oil, among other elements, isforcing many countries to look for other energy sources, like hydropower, wind,solar, geothermal, hydrogen, including in some cases nuclear energy, for thisspecific purpose Nevertheless, one thing is true: There is no other substitute foroil, coal, and natural gas for a stable and secure energy production, both now and

in the near future, and alternative ways of producing energy will play only a minorrole in the energy balance of many countries at least until the period 2035–2050.For this reason, the stable and reliable supply of oil, carbon, and natural gas is ofkey national interest to many States

According to International Energy Outlook 2010 (IEO 2010), the globaleconomic recession that began in 2008, and continued during 2011, 2012, and

2013, has had a profound impact on world energy demand in the near-term Totalworld market energy consumption contracted by 1.2 % in 2008 and around 2.2 %

in 2009, as manufacturing and consumer demand for goods and services declined.Although the recession appears to have softened in the past months in severalcountries, the pace of recovery has been uneven so far, with China and India

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leading, and Japan and the European Union (EU) member countries lagging Insome EU countries the crisis has deepened significantly.1

Liquid fuels remain the world’s largest energy source for the coming twodecades To satisfy the foreseeable increase in world liquid fuels expected demand,liquid fuels production should increase by 26 million barrels per day from 2007 to

2035, including the production of both conventional liquid fuel supplies (crude oiland lease condensate, natural gas liquids, and refinery gain) and unconventionalfuel supplies (biofuels, oil sands, extra-heavy oil, coal-to-liquids, gas-to-liquids,and shale gas) It is expected that sustained high world oil prices will allow for theeconomic development of unconventional energy resources and the use ofenhanced oil recovery technologies to increase production of conventional energyresources High world oil prices also incentivize the development of additionalenergy conventional resources through technically difficult, high-risk, and veryexpensive projects, including wells in ultra-deep water and the Arctic region.World production of unconventional liquid fuels, which totaled only 3.4 millionbarrels per day in 2007, should increase to 12.9 million barrels per day (around 3.7folds) in 2035, and is expected to account for 12 % of total world liquid fuel supply

in that year It is expected also that world liquid fuels consumption during theperiod 2007–2035 should increase from 86.1 million barrels per day in 2007 to110.6 million barrels per day in 2035; this represents an increase of 28.4 %

In the European region, the energy import dependency is rising Unless Europecan make domestic energy more competitive in the next 20–30 years, around 70 %

of the EU’s energy requirements, compared to 56 % today, will be met by energyimported products some of them from regions threatened by insecurity The futureenergy requirements of the different countries in the world are so high that, for thefirst time in humanity’s history, it is indispensable to consider all available types ofenergy sources and their proven reserves to plan the economic and social futuredevelopment of the countries At the same time, there is also a need to use theseenergy sources in the most economic and efficient possible manner in order tosustain that development, particularly for electricity generation, in order to reduce,

as much as possible, the emission of CO2to the atmosphere

The EU leads the world in power demand management, and in promoting newand renewable forms of energy for the generation of electricity If the EU backs up

a new energy policy with a common voice on energy issues, Europe can lead theglobal search for energy solutions in the coming decades However, EU must act

1 The economic situation of Greece, Spain, Portugal, and Italy, just to mention the most relevant cases, still are very dif ficult with a high decrease in their GDP, high rate of unemployment, and high public debt.

urgently because it takes many years to bring innovation on stream in the energysector, as well as to make productive the investments that are needed to update theenergy infrastructure in the region.

Keywords Energy
Europe
Oil
Carbon
Natural gas
Energy policy
Energystrategy
Electricity generation

• Nuclear energy: (fission and in the future fusion);

• Renewables: Hydro, solar, wind, geothermal, biomass, tidal/wave/ocean energy,and hydrogen

The mix of primary fuels used to generate electricity has changed a great dealover the past four decades on a worldwide basis Coal continues to be the fossil fuelmost widely used for electricity generation, except in the Latin America andCaribbean region However, electricity generation using natural-gas-fired powergeneration plants grew rapidly in the 1980s and 1990s, and is expected to continuegrowing in the next two decades The use of oil for electricity generation has beendeclining since the mid-1970s, when oil prices rose sharply, and this is alsoexpected to continue decreasing during the coming decades

1.1 Introduction

It is an unquestionable reality that energy production and, particularly, the tion of electricity and their sustained growth, constitute indispensable elements forthe economic and social progress of any country Undoubtedly, energy constitutesthe motive force of civilization and it determines, to a high degree, a country’s level

genera-of economic and social development To ensure adequate economic and socialgrowth of a country, it is indispensable that all available energy sources be used in alleconomic sectors in the most efficient and economic manner, particularly for thegeneration of electricity It is important to stress that the economy of any country isevaluated according to the development level of its energy infrastructure For thisreason, economic development is directly related to its energy infrastructure, adapted

to industrial development possibilities and the supply of different energy resources

© Springer International Publishing Switzerland 2015

J Morales Pedraza, Electrical Energy Generation in Europe,

DOI 10.1007/978-3-319-08401-5_1

1

Therefore, the growing price of energy resources and expensive infrastructure isbecoming the key issue while solving questions of economic development andintegration, and these factors may turn into one that influences the speed of economicgrowth of the country the most.

The attention of society to energy sector development is related to the need forwelfare growth as well as the aspiration to have a safe and ecologically harmonizedenvironment For this reason, the main task of the energy sector is a reliablegeneration of safe, ecologically clean, effective, and economically perspectiveenergy, particularly electricity This objective may be implemented by adopting anenergy sector management policy, by changing and defining management andoperational costs, and by assessing the impact of energy infrastructure on ecology.Therefore, the need emerges to estimate various aspects of electricity production,transmission, and distribution activity by more exhaustive methods, applyingenvironmental assessment, developing, and establishing ways that may becomehelpful in the decision-making process (Šliogerien and Krutinis2008)

According to the opinions of different experts, the use of energy at world levelwill continue to increase gradually until 2030 Then, the main question that needs to

be asked is the following: How much the foreseeable energy demand will increase

in the near future and how this demand is going to be met? According to studies bythe French Association of Oil Professionals, it is expected that for 2030 the worldenergy demand will be double and probably triple for 2050 Until 2030 the primaryenergy demand at world level is expected to increase annually at 1.7 %, which issomehow smaller than the world growth of 2.1 % registered during the past threedecades It is also expected that 90 % of the increase in the world energy demand inthe coming decades will be satisfied with fossil fuels If this forecast is true, thenaround 15,300 million tons of oil equivalent (112,500 million of barrels of oil) will

be consumed worldwide in 2030 Electricity production will account for 32 % ofthe total global fossil fuel use in that year For this reason, improving the efficiency1

at which electricity is produced is one of the most important ways of reducing theworld’s dependence on fossil fuels, thus helping both to combat climate change andimprove energy security

The different energy sources that humanity has in its hands now to satisfy itsenergy needs in the future are the following:

• Fossil Fuels: Oil (crude and nonconventional), natural gas (including shale gasand other nonnatural gas), and coal;

• Nuclear energy: (fission and in the future fusion);

• Renewables: Hydro, solar, wind, geothermal, biomass, tidal/wave/ocean energy,and hydrogen

1 The energy ef ficiency (E) of electricity production is defined as: E = (P + H × s)/I, where:

P = electricity production from electricity power plants and CHP plants; H = useful heat output from CHP plants; s = correction factor between heat and electricity, de fined as the reduction in electricity production per unit of heat extracted; and I = fuel input for electricity power plants and CHP plants.

The mix of primary fuels used to generate electricity has changed a great dealover the past four decades on a worldwide basis Coal continues to be the fossil fuelmost widely used for electricity generation, except in Latin America and theCaribbean region However, electricity generation using natural-gas-fired powergeneration plants grew rapidly in the 1980s and 1990s, and is expected to continuegrowing in the next two decades The use of oil for electricity generation has beendeclining since the mid-1970s, when oil prices rose sharply, and is also expected tocontinue decreasing during the coming decades.

High fossil fuel prices recorded between 2003 and 2012, combined with cerns about the environmental consequences of greenhouse gas emissions, haverenewed interest in the development of alternatives to fossil fuels, specifically ofdifferent renewable energy sources and also nuclear energy in several countries,2forgeneration of electricity The International Energy Outlook 2010 (IEO2010) ref-erence case indicated that “long-term prospects continue to improve the role ofrenewable energy sources for the generation of electricity, supported by govern-ment incentives and by high fossil fuel prices.” However, it is important to highlightthat this type of energy source will not satisfy the foreseeable increase in energydemand during the coming decades and other types of energy sources should beincluded in the energy mix in many countries

con-In the specific case of the European region, fossil fuels, such as oil, natural gas,and coal, are by far the largest sources of energy and are widely projected todominate the European energy mix through to at least 2030 The European Com-mission’s Energy Roadmap 2050 identifies natural gas as a critical fuel for thetransformation of the energy system The substitution of coal and oil with naturalgas in the short to medium term could help to reduce emissions with existingtechnologies until at least 2030–2035 (Pearson et al.2012) The net growth in thepast 11 years of natural gas power (118.2 GW), in addition to wind power(75.2 GW) and solar photovoltaic (26.4 GW), was at the expense of fuel oil (down13.2 GW), coal (down 9.5 GW), and nuclear energy (down 7.6 GW) In the specificcase of the EU power sector, countries continue to replace aging fuel oil, coal, andnuclear power plants with modern technology, while at the same time increasing itstotal installed capacity to meet the increasing energy demand in the coming years(EWEA2011)

2 The nuclear accident at the Fukushima Daiichi nuclear power plant occurred in Japan in March

2011 changed the perception of many countries about the use of this type of energy for electricity generation in the future Some EU countries canceled all plans to expand the use of nuclear energy for electricity generation or their plans for the introduction of this type of energy for this speci fic purpose.

Regarding the possible evolution of Europe’s energy mix during the period

2010–2040, it is important to highlight the following: Europe’s power mix changeddramatically over the past decades when almost half of Europe’s power came fromcoal and a quarter from fuel oil; back then natural gas was at the level that windenergy is today; less than 3 % of Europe’s power came from nuclear energy in

1971 In 2008, Europe generated about one-quarter of its electricity from naturalgas, just 3 % of fuel oil and about 20 % of renewable energy sources (EWEA

2011).3As regards the structure of electricity production in 2012, the production ofconventional thermal electricity decreased by 4.6 % in EU-27 and accounted for52.3 % of the total production; the production of electricity by nuclear power plantsdecreased by 2.7 % in EU-27 and accounted for 27.1 % of the total; the electricityproduction by hydro increased by 9 %, while the production by wind increased inEU-27 by 11.5 % and represented, respectively, 11.7 % and 6.4 % of the total;electricity production by other types of energy sources was 3 %

In many parts of the world, concerns about security of energy supplies and theenvironmental consequences of greenhouse gas emissions have spurred governmentpolicies that support a projected increase in renewable energy sources As a result,renewable energy sources are the fastest growing sources of electricity generationexpected to grow at 2.8 % per year from 2010 to 2040 After renewable generation,natural gas and nuclear power are the next fastest growing sources of generation,each expected to increase by 2.5 % per year Although coal-fired generation isexpected to increase by an annual average of only 1.8 % over the projection period,

it remains the largest source of world power generation through 2040 (see Fig.1.1).The outlook for coal, however, could be altered substantially by any future nationalpolicies or international agreements aimed at reducing or limiting the growth ofgreenhouse gas emissions (IEO2013)

The use of liquid fuels grows modestly or declines in all end-use sectors excepttransportation, where in the absence of significant technological advances liquidfuels continue to provide much of the energy consumed

In the opinion of the European Commission (EC) President, José ManuelBarroso, the region needs what he called“The Third Industrial Revolution: Oil and

3 In 2012, around 52.3 % of the electricity generated in the EU was produced using fossil fuels In

1999, the total electricity generated by fossil fuels was 1,567 billion kWh; in 2012, the electricity generation was a little bit higher than 3,050 billion kWh, an increase of 94.6 % respect to 1999.

other hydrocarbons are a limited resource, and our own internal reserves aredwindling Today Europe imports around 50 % of its energy needs By 2030, thatwill be nearer 70 %, if current energy policies continue to be applied At the sametime, with the rise of new economic giants like China and India, global demand forthese hydrocarbons is increasing (…).”

On the other hand, and according to IEO (2010), with world oil prices projected

to stay high, liquid fuels are the only energy source for power generation that doesnot grow on a worldwide basis Most nations are expected to respond to higher oilprices by reducing or eliminating their use for electricity generation, opting instead

to use more economical energy sources for this specific purpose such as ables, coal, and, in some countries, nuclear energy It is expected that the generation

renew-of electricity from liquid fuels will decrease from 0.9 trillion kWh in 2007 to0.8 trillion kWh in 2035; this represents a decrease of 11.2 % during that period

1.2.1 Crude Oil

As of December 2012, proven world crude oil reserves, as reported by EIA sources,were estimated at 1,525.957 billion barrels, which is 52.2 billion barrels (about3.5 %) higher than the estimate for 2011.4 In 2013, the proven world crude oil

Fig 1.1 World net electricity

generation by energy source,

2010 –2040 (Trillion kWh).

Source: IEO ( 2013 )

4 Crude oil is a complex mixture consisting of 200 or more different organic compounds, mostly alkanes (single bond hydrocarbons on the form CnH2n+2) and smaller fraction aromatics (six-ring molecules such as benzene C6H6) The oil and gas industry classi fies “crude” oil by were it was produced of its origin and often by its relative weight (API gravity or viscosity ( “light”, “inter- mediate ” or “heavy”); in addition it may also be referred to as “sweet” (it contains relatively little sulfur), or as “sour” (it contains substantial amounts of sulfur) and requires more refining in order

to meet current petroleum speci fications.

reserves were estimated at 1,637.9 billion barrels (IEO 2013); this represents anincrease of 7.3 % with respect to 2012.

According to the Oil and Gas Journal, 51 % of the world’s proven crude oilreserves are located in the Middle East Just under less than 79 % of the world’sproven crude oil reserves are concentrated in eight countries, of which only Canada(with oil sands included) and Russia are not OPEC members

In 2013, the largest increase in crude oil reserves by far was attributed toVenezuela, as the country now reports its Orinoco belt extra-heavy oil in its totals(Radler 2010) The largest decreases in regional proven crude oil reserves wereattributed to Europe, including notable declines for Norway, Denmark, and theUnited Kingdom (UK), which in combination saw a 14 % decline (1,485 billionbarrels) in their proven crude oil reserves from 2010 to 2011 (Table1.1).World use of petroleum and other liquid fuels is expected to grow from

87 million barrels per day in 2010 to 97 million barrels per day in 2020 and 115million barrels per day in 2040 All the growth in liquids use is expected to be in thetransportation and industrial sectors In the transportation sector, in particular, liquid

Table 1.1 List of top 20

countries with the highest

proven crude oil reserves in

fuels will continue to provide most of the energy consumed Although advances innon-liquids-based transportation technologies are anticipated, they are not enough

to offset the rising demand for transportation services worldwide Despite rising fuelprices, use of liquids for transportation is expected to increase by an average of1.1 % per year, or 38 % overall, from 2010 to 2040 The transportation sector isexpected to account for 63 % of the total increase in liquid fuel use from 2010 to

2040, and the remainder is attributed to the industrial sector, where the chemicalsindustry continues to consume large quantities of petroleum throughout the pro-jection The use of liquids is expected to decline in the other end-use sectors and,particularly, for electric power generation (IEA 2013)

To meet the foreseeable increase in world demand, liquid fuels production(including conventional and non-conventional liquid fuel supplies) should increase

by a total of 26.6 million barrels per day from 2008 to 2035 It is important to notethat OPEC countries will invest in incremental production capacity in order tomaintain a share of approximately 40 % of total world liquid fuels productionthrough 2035, consistent with their share over the past 15 years Increasing volumes

of conventional liquids (crude oil and lease condensate, natural gas plant liquids,and refinery gain) from OPEC producers should contribute 10.3 million barrels perday to the total increase in world liquid fuels production, and conventional suppliesfrom non-OPEC countries add another 7.1 million barrels per day

Non-conventional resources5(including oil sands, extra-heavy oil, biofuels, to-liquids, gas-to-liquids, and shale gas) from all sources are expected to grow onaverage by 4.6 % per year over the period 2008–2035 Sustained high oil prices willallow unconventional resources to become economically competitive, particularlywhen geopolitical or other constraints limit access to prospective conventionalresources World production of unconventional liquid fuels, which totaled only3.9 million barrels per day in 2008, is expected to increase to 13.1 million barrels perday, an increase of 236 %, and is expected to account for 12 % of total world liquidfuels supply in 2035

coal-According to Table1.2, the ten top crude oil producers in 2012 produced 2,650million of tons of crude oil, representing 64 % of the world total production Withinthis group there is only one country that belongs to the European region (Russia)with 12.6 % of the world total production of crude oil The ten top crude oilexporters in 2011 exported 1,408 million tons, representing 71 % of the world totalexports Within this group, there is only one European country (Russia with 12.5 %

of the world total) The ten top importers of crude oil in 2011 imported1,571 million tons of crude oil, representing 75.6 % of the world total imports.Within this group, there are four European countries (Germany, Italy, France, andthe Netherlands)

5 According to some experts ’ opinions, these sources may eventually more than triple the potential reserves of hydrocarbon fuels Beyond that, there are even more exotic sources, such as methane hydrates, that some experts claim can double available resources once more.

1.3 Natural Gas

The natural gas used by consumers is composed almost entirely of methane.However, natural gas found at the wellhead, though still composed primarily ofmethane, is not pure.6Raw natural gas comes from three types of wells: oil wells,gas wells, and condensate wells Natural gas that comes from oil wells is typicallytermed “associated gas.” This gas can exist separately from oil in the formation

Table 1.2 Producers, net exporters, and net importers of crude oil*

world total

Net exporters

Rest of

the world

* Includes crude oil, NGL, feedstocks, additives and other hydrocarbons Source: IEA (2013)

6 While the ethane, propane, butane, and pentanes must be removed from natural gas, this does not mean that they are all waste products In fact, associated hydrocarbons, known as natural gas liquids (NGL), can be very valuable byproducts of natural gas processing NGLs include ethane, propane, butane, iso-butane, and natural gasoline These are sold separately and have a variety of different uses such as raw materials for oil re fineries or petrochemical plants, as sources of energy, and for enhancing oil recovery in oil wells Condensates are also useful as diluents for heavy crude oil.

(free gas), or dissolved in the crude oil (dissolved gas) Natural gas from gas andcondensate wells in which there is little or no crude oil, is termed“non-associatedgas.” Raw gas is processed into various products or fractions:

• Natural gas in its marketable form has been processed for a specific composition

of hydrocarbons, sour and acid components, etc., and energy content Content istypically 90 % methane, with 10 % of other light alkenes;

• Natural gas liquids (NGL) is a processed purified product consisting of ethane,propane, butane, or some higher alkenes separately, or in a blend It is primarily

a raw material for the petrochemical industry and is often processed from thecondensate;

• Liquefied petroleum gas (LPG) refers to propane or butane or a mixture of thesethat has been compressed to liquid at room temperature LPG isfilled in bottlesfor consumer domestic use as fuel, and is also used as aerosol propellant (inspray cans) and refrigerant (e.g., in air conditioners) Energy to volume ratio is

74 % of gasoline;

• Liquefied natural gas (LNG) is natural gas that is refrigerated and liquefied atbelow −162 °C, for storage and transport It is stored at close to atmosphericpressure, typically less than 125 kPa As a liquid, LNG takes up 1/600 of thevolume of the gas at room temperature Energy to volume ratio is 66 % ofgasoline After transport and storage it is reheated/vaporized and compressed forpipeline transport;

• Compressed natural gas (CNG) is natural gas that is compressed to less than 1 %

of volume at atmospheric pressure Unlike higher alkenes, methane cannot bekept liquid by high pressure at normal ambient temperatures because of a lowcritical temperature CNG is used as a less costly alternative to LNG for lowercapacity and medium distance transport Methane for vehicle fuel is also stored

as CNG Energy to volume ratio is typically 25 % of gasoline

In the case of natural gas, there are enough reserves to satisfy the foreseeabledemand during the coming decades According to EIA 2013 report (see Table1.3), theworld’s total natural gas reserves in 2013 were estimated at 239,894.8 trillion m3

(6,793 trillion cubic feet).7According to EIA sources, worldwide natural gas demandgrew by 1.71 billion m3per day from 2000 to 2007, nearly 25 % during the wholeperiod or 3.6 % as average per year The EIA also projects global natural gas demand

in the coming years to grow over 9.7 billion m3, representing an increase of 14.8 %,and projects a further growth in demand around 11.2 billion m3per day by 2025; thisrepresents a further increase of 16.1 % (see Fig.1.2) World natural gas consumption

is expected to increase by 64 % from 113 trillion cubic feet (3,990.6 billion m3) in

2010 to 185 trillion cubic feet (6,533.275 billion m3) in 2040 Although the globalrecession resulted in an estimated decline of 3.6 trillion cubic feet (127.134 trillion

m3) in natural gas use in 2009, robust demand returned in 2010 with an increase of

7 One cubic feet is 35.315 m3.

7.7 trillion cubic feet (271.93 trillion m3), or 4 % higher than demand in 2008, beforethe downturn (IEA 2013).

Natural gas continues to be the fuel of choice for the electric power andindustrial sectors in many of the world’s regions, in part because of its lower carbonintensity compared with coal and oil, which makes it an attractive fuel source incountries where governments are implementing policies to reduce greenhouse gasemissions In addition, it is an attractive alternative fuel for new power generationplants because of relatively low capital costs and the favorable heat rates for naturalgas generation The industrial and electric power sectors together account for 77 %

of the total projected world increase in natural gas consumption In 2011, theparticipation of natural gas in the EU energy mix reached 23.4 % and in thegeneration of electricity 37.4 %

According to Table1.3, the major world natural gas reserves are located in Russia(24.9 % of the total), followed by Iran (15.5 %) and Qatar (13.1 %) Among the

Table 1.3 Natural gas

reserves by country January

20 top countries with the highest natural gas reserves there are only two Europeancountries: Russia and Norway.

Natural gas consumption in OECD Europe is expected to grow by 0.7 % peryear on average, from 19.8 trillion cubic feet (699,237 trillion m3) in 2010 to24.5 trillion cubic feet (865,2175 trillion m3) in 2040, the lowest growth rate overthe period, both in the OECD region and in the world The decline in demand forenergy from coal and liquids results in an increase in the natural gas share of OECDEurope’s total energy consumption, from about 25 % in 2010 to 27 % in 2040.More than half of OECD Europe’s 4.7 trillion cubic feet (165,9805 trillion m3) ofgrowth in total natural gas consumption from 2010 to 2040 is expected to comefrom the electric power sector at 2.7 trillion cubic feet (95.35 trillion m3) Althoughthe amount of natural gas consumed for electric power production is expected toincrease by an average of only 0.4 % per year from 2010 to 2020, it is expected

to increase by 1.7 % per year from 2020 to 2040, as economies recover from theglobal recession that began in 2008

Many governments in OECD Europe have made commitments to reducegreenhouse gas emissions to 20 % below 1990 levels by 2020 and have endorsedthe objective of lowering emissions to between 80 % and 95 % below 1990 levels

by 2050 (European Commission2013)

Natural gas potentially has two roles to play in reducing carbon dioxide sions in OECD Europe’s electric power sector: as a replacement fuel for morecarbon-intensive coal-fired generation and as a backup for intermittent generationfrom renewable energy sources Although there are many incentives for usingnatural gas more heavily in the electric power sector, growth has been hampered by

emis-Fig 1.2 World ’s natural gas demand projection during the period 2015–2025 Source: EIA International Energy Outlook ( 2010 )

a lack of progress in regulatory reforms in OECD Europe that would make naturalgas more competitive in electric power markets Such reforms would includemeasures to increase spot trading and make natural gas markets moreflexible bymaking it easier for market participants to purchase and transmit gas supplies.Presumably, the impact of such reforms, as well as the increased use of natural gas

to reduce carbon dioxide emissions from electric power generation, would occur forthe most part after 2025 Additionally, recent actions by some European govern-ments to reduce their reliance on nuclear power in the wake of Japan’s FukushimaDaiichi nuclear disaster will provide an additional boost to both natural gas andrenewable energy use in electricity generation According to IEO (2013), “anincrease of 1.7 % per year in natural gas consumption for power generation from

2020 to 2040 is higher than for any other energy source used in the sector”.Many governments in OECD Europe have made commitments to reducegreenhouse gas emissions and to promote the development of clean energy forelectricity generation during the coming decades Because natural gas is less car-bon-intensive than either coal or oil, it is a more environmentally attractive optionfor electricity generation under this circumstance, and thus is likely to remain animportant fuel for Europe’s electric power sector development in the long term.The countries of non-OECD Europe and Eurasia currently rely on natural gas formore than 50 % of their primary energy needs, the larger share in the IEO (2011)reference case Russia is the world’s second largest consumer of natural gas afterthe United States, with demand totaling 593.292 trillion m3(16.8 trillion cubic feet)

in 2008, representing 55 % of Russia’s total energy consumption It is expected thatRussia’s natural gas consumption will grow at a modest average rate of 0.1 % peryear from 2008 to 2035 In other countries of non-OECD Europe and Eurasia, it isexpected that natural gas consumption will grow by 0.4 % annually over the period

2008–2035, from 289.583 trillion m3 (8.2 trillion cubic feet) in 2008 to321.367 trillion m3(9.1 trillion cubic feet) in 2035

It is important to highlight that natural gas is the largest component of severalother European countries’ primary energy consumption The industrial sectorremains the region’s largest consumer of natural gas, with a share of approximately

40 % of total natural gas consumption throughout the period 2008–2035 However,

in the long term, rising prices for both domestically produced and imported naturalgas are likely to moderate the region’s growth in natural gas demand

From Fig.1.3, the following can be stated: The primary production of naturalgas in the EU during the period 2005–2012 decreased from 190,651.8 thousandtons of oil equivalent in 2005 to 133,148.5 thousand tons of oil equivalent in 2012;this represents a decrease of 30.2 %

The main European natural gas producers in 2012 were Russia with 19.1 % ofthe world total, followed by Norway with 3.3 % and the Netherlands with 2.3 %.The main European natural gas exporters in 2012 were Russia with 22.3 % of theworld total, followed by Norway with 13.1 % and the Netherlands with 4.1 %.The main European natural gas importers in 2012 were Germany with 8.4 % of theworld total, followed by Italy with 8.2 %, France with 5.2 %, and Ukraine with3.9 % (Table1.4)

According to Table1.5, UK is the country with the highest inland consumption

of natural gas for generation of electricity with 994.40 GWh per year, followed byGermany with 853.71 GWh per year, Italy with 791.5 GWh per year, and Francewith 494.74 GWh per year The EU countries with the highest production of naturalgas for generation of electricity are the Netherlands with 738.90 GWh per year,followed by the UK with 598.57 GWh per year, and Germany with 112.74 GWhper year

Primary production of natural gas in the EU-28 (Thousands of tons oil equivalent)

Fig 1.3 Primary production of natural gas in the EU-28 Source: Eurostat data base

Table 1.4 Producers, net exporters, and net importers of natural gas in 2012

world total

Net exporters Bcm Net importers Bcm

United States 681 19.8 Russian

People ’s

Republic of

China

Net export and net imports include pipeline gas and LNG Source: IEA (2013)