The conversion of the lignite plant “Ptolemaida 5” into a green energy thermal storage facility is emerging as a solution that is not only compatible with the Europe Green Deal and the country’s increased electricity storage needs but also economically competitive, according to a new comparative economic analysis prepared by enervis in collaboration with the Green Tank and Client Earth.
The Public Power Corporation’s (PPC) new lignite plant “Ptolemaida 5” is intended to be commissioned at the end of 2022 and burn lignite until 2028. While its future after 2028 remains unclear 1.5 years after the decision to phase out lignite, the skyrocketing prices for carbon dioxide (CO2) emission allowances are exacerbating the need to decide on the technology for the post-lignite life of Greece’s largest energy infrastructure investment.
Aiming to contribute creatively to the public debate on a thorny issue that has already cost at least € 1.4 billion and influenced the country’s energy policy for more than a decade, the Green Tank and the organization of environmental lawyers ClientEarth have partnered with enervis, a German company of energy consultants to comparatively evaluate the four most discussed technologies in relation to the future of Ptolemaida 5.
Specifically, the following technologies were examined:
a) the use of CO2 capture and storage technology (CCS) in combination with the continuation of the plant’s lignite operation,
b) the conversion of Ptolemaida 5 into a biomass combustion plant,
c) its replacement by a Combined Cycle Gas Turbine (CCGT) with fossil gas as a fuel, and
(d) its conversion into a thermal energy storage facility, utilizing the technology of molten salts, to store electricity derived from renewables in the form of heat.
For each technology, the effect of a number of parameters on the Levelized Cost of Electricity (LCOE) was assessed, and the four technologies were also comparatively evaluated in terms of their ability to maintain or create jobs. For the evolution of carbon prices, the already outdated scenario contained in the Greek National Energy and Climate Plan (NECP) was considered, as well as another scenario from the European Commission’s impact assessment on the new EU climate target, which, however, is far more conservative than analysts’ current forecasts for the evolution of CO2 prices in the current decade.
The CCS technology was proven to be the most expensive with an LCOE ranging between 122 €/MWh and 158 €/MWh and for a wide range of CO2 capture rates between 30% and 90%. The lowest LCOE values correspond to low CO2 capture levels of 30% and the low carbon price predictions contained in the current NECP.
Biomass combustion was shown to be economically competitive (LCOE lower than 80 €/MWh) only for low levels of biomass co-firing (10%) and in conjunction with the low carbon price scenario. For the most realistic scenario for the evolution of carbon prices or for the case of a full replacement of lignite by biomass, the LCOE exceeds 100 €/ΜWh.
Replacing lignite with fossil gas is the cheapest option (65 €/ΜWh) only for scenarios that combine gas supply prices lower than those provided in the NECP, low CO2 prices and a high number of operating hours (6000 hours per year). For higher fuel prices, the most ambitious of the two carbon price scenarios and 4000 operating hours per year, the LCOE exceeds 120 €/ΜWh.
The conversion of Ptolemaida 5 into a thermal energy storage facility using electricity derived from renewables renders the plant completely independent of the fluctuations in carbon prices or those of specific fuels such as gas or biomass, while at the same time, contributes towards covering Greece’s increased energy storage needs. The results of the analysis show that this solution is very competitive as it is characterized by an LCOE that ranges between 91 €/ΜWh and 106 €/ΜWh, with the most advantageous prices corresponding to high participation of photovoltaics of the order of 70% in the mixture of renewable electricity being stored.
In terms of jobs, the smallest number of employees (405) corresponds to the option of replacing Ptolemaida 5 with a CCGT plant, while the complete replacement of lignite by biomass is expected to lead to 1428 jobs. However, many of them will not be domestic as imports will most probably be required to supply such large quantities of biomass. On the other hand, the conversion of Ptolemaida 5 into an energy storage facility can lead to 1247 permanent jobs if we take into account the positions in the plant as well as those required for the operation and maintenance of the wind and PV plants providing the electricity to be stored.
“The crucial decision on the replacement technology which will be finally implemented in Ptolemaida 5 must escape the strategy of derogations and the shortsighted view of international climate and energy policy developments, which prevailed in the efforts to develop this lignite project during the last 10-15 years. It is absolutely essential that the long-term trends in the EU carbon market, fossil gas prices, as well as, the compatibility of the various options with the new EU-wide climate neutrality by 2050 target, are seriously taken into account“, said Nikos Mantzaris, Senior Policy Analyst for The Green Tank.
Note to editors
- You can read the full report in English titled «Techno-economic assessment of replacement options for Ptolemaida V»
- You can read a synopsis of the report’s main conclusions in Greek titled «Τέχνο-οικονομική αξιολόγηση εναλλακτικών λύσεων για την Πτολεμαΐδα 5»