Emissions in electricity systems: Dealing with high penetration of intermittent resources and co-generation

Transcription

1 Emissions in electricity systems: Dealing with high penetration of intermittent resources and co-generation Morten Boje Blarke M.Sc. Eng. Ph.D. Sustainable Energy Planning Assist. Prof. Department of Development and Planning Aalborg University

2 Last lecture follow-up Activities covered by the Danish CO2 Allowances Act energy-generating plants > 20 MW input, including industrial / offshore plants refineries and coke ovens large the ferrous metals industry (ferrous metals processing) large cement, glass and ceramic (tiles) companies large pulp and paper companies Allocation of free allowances In some instances new installations may receive free allowances. These allowances are allocated according to key figures related to production capacity and require that allowances are available in the pool. Allowances are allocated according to a first come first served principle.

3 Group task from previous lecture 1. Calculate the economic and fiscal CO2 reduction costs for replacing oil boiler with air-water heat pump (plenary) 2. Group ideas for other measures (reduction cost and reduction potential) Identify ONE appealing domestic measure in energy or transport, that may reduce CO2 emissions Calculate economic, fiscal, and financial consequences. Calculate the economic and fiscal CO2 reduction costs. Calculate or estimate the implemented measure s annual reduction potential (tons CO2 per year) 3. Step diagramme on CO2 reductions and costs and discuss each group s measure

4 Intended learning objectives to know about important methodologies for evaluating the impact on CO2 emissions from various measures, e.g. as those used for preparing CDM projects. to understand how to assess the impact on CO2 emissions from measures in an energy system with high penetration levels of wind power and cogeneration. to analyze the potential impact on Danish CO2 emissions from particular changes in distributed energy supply.

5 Dealing with emission reductions in the electricity system Inside ETS: Projects at central or distributed co-generation plants, e.g. increased use of biomass or other fuels with lower CO2 contents Projects on oil refineries Electricity savings (since electricity generation is generally under ETS) Wind power projects Outside ETS: Local heat supply projects under the quota directive limit of 20 MW Industrial projects outside the quota directive categories Projects that reduce transportation sector GHG emissions Projects that reduce agricultural greenhouse gas emissions

6 What s the point? The value of CO2 reductions inside ETS for plant and society is that the direct CO2 savings translate into increased sales (less purchases) of CO2 allowances - eventually import hereof - but no real CO2 reductions! So why analyze potential emissions reductions in electricity generation? For stakeholders subject to the quota system to identify costeffective measures to meet their quota For society to limit foreign currency spending (national balance of payment) For society to address the consequences with respect to other objectives, like use of local resources, local employment, security of supply

7 And what about other emissions? Typically, atmospheric emissions of SO2 and NOx are similarly internalized as costs (and also actually restricted by domestic regulations and markets) using these ranges: DKK per kg DKK per kg

8 CO2 reduction costs (cost-effectiveness)? Existing electricity system (DKK 175/tCO2) versus Horns Rev 2 11 kw grid-connected small wind turbine for household

9 CDM method for assessing emissions in electricity systems STEP 1. Identify the relevant electricity system. STEP 4. Calculate the operating margin (OM) emission factor according to the selected method. STEP 6. Calculate the build margin (BM) emission factor according to the identified power units. STEP 7. Calculate the combined margin (CM) emissions factor.

10 STEP 1. Identify the relevant electricity system The system is connected by transmission lines to the project and may be national or international Power plants within the system can be dispatched without any significant transmission constraints Identifying significant transmission constraints: Differences in spot prices of more than 5 % between the systems during 60 % or more of the hours of the year Transmission line is operated at 90 % or more of its rated capacity during 90 % or more of the hours of the year For Denmark, we will ignore off-grid issues.

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12 DKK / MWh Electricity spot prices % 150% 100% 50% 0% DK-NO -50% -100% -150% -200%

13 DKK / MWh Electricity spot prices % 150% 100% 50% 0% DK-SE -50% -100% -150% -200%

14 DKK / MWh Electricity spot prices % 150% 100% 50% 0% DK-DE -50% -100% -150% -200%

15 90% Electricity Spot Prices Share of hours with min. 5 % difference 80% 74% 70% 60% 50% 40% 40% 30% 28% 20% 10% 0% DK-NO DK-SE DK-DE

16 200% Transmission Capacity Utilization % 160% 140% 120% 100% DK-NO 80% 60% 40% 20% 0%

17 200% Transmission Capacity Utilization % 160% 140% 120% 100% DK-SE 80% 60% 40% 20% 0%

18 200% Transmission Capacity Utilization % 160% 140% 120% 100% DK-DE 80% 60% 40% 20% 0%

19 100% Transmission Capacity Utilization - Share of hours with min. 90 % utilization 90% 80% 70% 60% 50% 40% 44% 46% 30% 31% 20% 10% 0% DK-NO DK-SE DK-DE

20 Break

21 So... if we really want to model the Nordic Energy System (with interfaces to EPE) Balmorel and Wilmar (Hans Ravn and others, Ramløse EDB, balmorel.com, wilmar.risoe.dk) Ramses (Sigurd Lauge Pedersen, Danish Energy Authority) Models the production of electricity and district heating as well as Nordic area electricity prices based on plant and fuel data. Mars (Energinet.dk) Divides the region into price areas and models price dependent bids on an hourly basis. The model is mainly focused on simulating the dominant producers exercise of market power using game theory. The Interconnection Model (also known as the EMP Model) Interconnection model used for studies related to the Nordic electricity system. The model was used to determine the usefulness of a Great Belt power connection. The model simulates the Nordic electricity market and calculates expected prices, consumption, exchange and economic costs to producers and consumers. Interconnection strength of the model is the description of the Nordic hydropower production and variation in rainfall over time. The model describing both yearly variation of rainfall and the variation year to year. The model is maintained by Fingrid, Svenska Kraftnät, Statnett, and Energinet.dk in unison. The model developed by SINTEF in Norway and performed commercially by Powell IT. Sivael Simulates the Danish power system on an hourly level, e.g. under advanced plant data and startup.

22 STEP 4. Calculate the OM emission factor Simple OM, Simple Adjusted OM, Dispatch analysis OM, or Average OM

23 Dispatch model according to lowest marginal operating costs

24 Dispatch model identifies OM emissions

25 Exports should not be subtracted. Imports: Same country a) 0 tco2/mwh Another country a) 0 t CO2/MWh, or b) The OM emission rate of the exporting grid

26 The situation Only OM is coal fired power plants Wind turbines and cogenerators are must-run (non-dispatchable) Marginal short-term operating costs of coal fired power plants (Nordjyllandsværket, Skærbækværket, Studstrupværket, Esbjergværket, Enstedværket, Fynsværket) establishes a market price threshold under which the OM emission factor is zero In other systems (Nordic area, like East Denmark), you may also have other dispatchable units, like natural gas fired power plants (Avedøreværket)

27 Plenary model We will assume that other Nordic dispatchable units are nuclear and hydro (CO2 neutral) In fact, there will be natural gas fired power plants, for to simplify Projected marginal short-term operating costs of coal fired power plants (Nordjyllandsværket, Skærbækværket, Studstrupværket, Esbjergværket, Enstedværket, Fynsværket) Simplified common assumptions: η = 40 %, 20 year lifetime, no O&M) Projected annual electricity prices Calculate OM emission factor for every year

28 Break

29 STEP 6. Calculate the BM emission factor The build margin is the emission factor that refers to the group of prospective power plants whose construction and future operation would be affected by the proposed CDM project activity. a) The set of five power units that have been built most recently, or b) The set of recent power capacity additions in the electricity system that comprise 20% of the system generation (in MWh) West Denmark: All dispatchable plants are 10+ years old, 100 % over capacity (incl. wind), no new conventional plants planned for If this approach does not reasonably reflect the power plants that would likely be built in the absence of the project activity, submit alternative proposals for consideration by the CDM Executive Board.

30 STEP 6. Calculate the BM emission factor In our case: 0

31 STEP 7. Calculate the CM emission factor In our case:

32 Group task 1. Calculate the levelized economic production costs (DKK/MWh) (all costs, incl. grid connection, are included) for: a) Horns Rev 2: 209 DKK 3,5 billion 3,820 full-load h b) 11 kw Gaia: 11 DKK 0,5 million 2,102 full-load h Simplified common assumptions: i := 6%, 20 year lifetime, no O&M) 2. Using hourly profiles, for each year in the planning period ( ), calculate spot market price minus production cost 3. Calculate OM CO2 emission reductions 4. Calculate the CO2 reduction costs

33 DKK per ton CO2 kr CO2 Reduction Cost kr kr kr kr kr kr kr 500 kr 0 kr -80 kr -500 Gaia Horns Rev