How Siemens Gamesa Could Give Coal Plants a Second Life

Ten years ago, Siemens Wind Power, as it was then known, started playing around with a concept for a thermal energy storage system. Last year, the wind turbine manufacturer now known as Siemens Gamesa plugged a 30-megawatt/130-megawatt-hour demonstration system into the grid at Hamburg harbor.

By next year, it could be breathing new life into coal power plants that are currently scheduled for a date with a wrecking ball.

The Electric Thermal Energy Storage (ETES) technology uses fans to blow hot air into a chamber filled with volcanic rocks to temperatures of up to 800 degrees Celsius. The heat can be used to drive steam turbines for power or siphoned-off as heat or steam for end users.

With more than six months of performance under its belt in Hamburg, the company is now eyeing a full-size rollout using modular systems of 1-gigawatt-hour blocks. Ten potential customers are in talks with the firm, including a wind farm operator looking to sidestep curtailment rates that are approaching 60 percent and the owner of a recently commissioned coal plant looking to prolong its life.
Siemens Gamesa’s coal plant lifeline
There are lots of energy storage technology options available for load-shifting or arbitrage, but Hasan Özdem, head of technology management and projects for Siemens Gamesa, told GTM that ETES is the only system that can rejuvenate and rehabilitate conventional power assets.

This is not as niche a market as it might appear to be. According to Global Energy Monitor’s coal power plant tracker, the U.S. has commissioned 21.5 gigawatts of new coal-fired power capacity since 2006. South Korea has commissioned 19.7 gigawatts in the same period, and EU renewables heavyweight Germany has weighed in with 9.7 gigawatts. Germany has just approved a €45 billion ($49 billion) compensation package for the shutdown of its entire coal power fleet by 2038.

That means the narrative of renewables “killing” conventional power plants can be revised.

“It was wind and solar versus coal and gas power plants. What we are saying is no: ETES can give those conventional power plants a space in the energy future by turning them into green storage facilities.”

“As an engineer, it really concerns me because the only problem with conventional power is that they're polluting the environment; it's a very, very big negative. But if you take that away, this technology has been working very efficiently for decades. And the upfront costs of these assets are very, very high. Customers are looking for ways to keep them running for another 30 years, and ETES is their [only] choice so far. We have proven that we are the only technology to go beyond a PowerPoint presentation and actually be operational, as we are at Hamburg harbor.”

Özdem said the capex costs for ETES are substantially lower than more established storage alternatives and claims customers are more comfortable with the technology, partly because of the absence of certain temperamental chemicals and partly because of the simplicity.

ETES can slot into conventional power assets easily because it mirrors century-old thermal generation technology. “Except for the storage chamber, everything else is basically what people have been installing in conventional power plants for decades, if not a century — it’s just water-steam cycle, steam generators, steam turbines and pipes,” said Özdem.

A legacy thermal plant is by no means a prerequisite for ETES. They could be sited anywhere with a grid connection. Building them on-site or close to industrial users opens up a whole new customer base.
Industrial opportunity
Industrial customers that use heat and steam in their own processes, as well as the power, are another promising customer base for the system.

With increasing pressure to decarbonize, a solution that doesn’t require waiting for the development of a hydrogen value chain and accompanying infrastructure could prove attractive.

For many industrial sectors, there aren’t too many easy options to slash emissions. At the same time, the regulatory and policy pressure to do so is becoming more ambitious and less forgiving of these difficult-to-decarbonize sectors. The growing impetus for carbon taxes in Europe puts further pressure on industry to consider their low-carbon options, with Germany recently ramping up its carbon price. The scope of the German plan also incorporates some industrial emissions not covered by the EU’s cap-and-trade platform.

The EU’s proposed carbon border tax also shuts down the go-to loophole for some sectors. Applying the carbon tax at the border gate aims to prevent businesses from offshoring carbon emissions by outsourcing dirtier work beyond EU borders. ETES and other thermal storage options could also address what so far has been slow progress in decarbonizing heat, another sector garnering attention.