The Virtual Power Plant

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1 Vattenfall Europe Wärme AG Puschkinallee Berlin, Germany T energiedienstleistung@vattenfall.de Vattenfall Europe New Energy Services GmbH Kapstadtring Hamburg, Germany T The Virtual Power Plant Wind power meets heat September 2011

2 Contents Introduction The Virtual Power Plant The intelligent integration of renewables 4 How the Virtual Power Plant works How heat is generated from wind power 6 A breath of fresh air for the heat market With our Virtual Power Plant, wind power becomes heat Building bridges The Virtual Power Plant enables the integration of more wind power 8 Heat market is taking off The secret of the Virtual Power Plant s success: heat 10 Green heat made simple Combination package: heat pump with green electricity for homeowners 12 The latest generation Virtual Power Plant: intelligent consumption and production 14 How do they work? The operating principle of heat pumps and combined heat and power units 15 Contact 16 Legal notice Responsible for the content: Vattenfall Europe Wärme AG Puschkinallee Berlin, Germany Editor: Wolf-Dieter Rühl Dear readers Growing cities with rising and evolving heating and cooling requirements are increasingly placing new demands on a reliable energy supply. Renewable energies play an ever greater role Dr. Frank May here, one which can be met by the use of efficient and decentralised supply solutions. With the Virtual Power Plant, the Business Unit Heat offers an innovative solution for climate-friendly heat supplies. The aim is to better integrate renewables in power and heat supplies and ensure a balancing of over- and undersupply in the power grid. We are convinced that our Virtual Power Plant creates room for renewable energies. Indeed, this is where the innovation lies: wind power is centrally controlled and used for decentralised heat supply. In view of wind power s so-called volatility, our aim is to meet the precisely foreseeable heat requirements of our customers for heating and hot water in a flexible and reliable way by making use of storage facilities. Flexibility and reliability are the two principles which we, as Europe s largest supplier of district heating, have mastered for decades. Herein lies the key to the development and further expansion of our Virtual Power Plant as the innovative union of generators and consumers. Dr. Frank May Vice President Heat Our Virtual Power Plant, which controls combined heat and power units as electricity generators and heat pumps as electricity consumers, is expected to keep on growing. This is also true of its potential for development. Up to 25,000 systems can be Hanno Balzer controlled simultaneously. There are therefore no limits to the growth of the Virtual Power Plant for the foreseeable future. Using the new technical plant standard, VHPReady, for heat pumps and combined heat and power units, we are making it possible for all system manufacturers to integrate decentralised systems in the Virtual Power Plant simply and affordably. Systems which meet the quality standards and the technical requirements of the VHPReady seal of quality can be connected to the Virtual Power Plant without any further installation work. We would be pleased to discuss the Virtual Power Plant with you. Hanno Balzer Head of Solutions BU Heat 2 The Virtual Power Plant The Virtual Power Plant 3

3 Problem and Solution The Virtual Power Plant The intelligent integration of renewable energies Germany, a republic of wind power. Over 21,000 propellers currently rotate to generate energy from the Alps to the North Sea, and since the connection of the Alpha Ventus wind farm in August 2009, even on the high seas. The potential output is currently around 27,000 megawatts (around six percent of German electricity requirements) and will continue to rise, as the German Federal Government sees in wind power the greatest potential for expansion. With its help, the government wants to achieve 80 percent of electricity generation from renewable energies by Experts are therefore expecting a tripling of wind energy capacity in Germany to Germany, a genuine wind power fairy tale? Regardless of how good for the environment and climate restructuring the energy mix is, it presents the entire energy system with great challenges. One of the biggest problems: the energy generated is unpredictable. The wind doesn t blow when we want it to. This volatility has drastic consequences: when it is calm, the required energy is not available, while on days with strong winds in many regions, not all of the energy can be fed into the grid because it is then in danger of collapsing (see pages 8 9). Electrical energy can still not be stored effectively and for long periods on a large scale. If the success story of renewable energies is to continue, solutions for issues relating to the control and storage of energy must be found quickly. Although the German Federal Government is supporting related research programmes, they are still in their infancy. There is the political will for electric cars, in particular, to act as decentralised energy stores: interlinked intelligently, millions of car batteries could form an enormous power store from which energy could then be siphoned off at times of high demand. But that is still largely a long way off. For one thing, with currently very high battery costs, it is likely to take a number of decades until millions of electric cars can actually contribute to solving the problems of storing electricity. Is there then no hope of getting an intelligent network of diverse technical systems for efficient energy use up and running? There certainly is: apart from electrical energy, there is one form of energy which can very well be stored on a large scale, effectively and tailored to need: heat. The Virtual Power Plant performs two tasks which were previously incompatible in a single power plant. There is one form of energy which can very well be stored effectively and on a large scale: heat. The energy company Vattenfall is taking advantage of this principle and has begun interconnecting power-consuming heat pumps and power-generating combined heat and power units in a major system: the Virtual Power Plant. The core idea: if it is possible to convert the electricity produced from renewable energy sources into heat and to use it, the amount of conventionally produced energy previously required for this purpose automatically falls. The wind and sun may supply environmentally-friendly energy, but they do so very erratically. The Virtual Power Plant balances this out and performs two tasks which were previously mutually exclusive in one power plant. It balances over- and undersupply in the power grid by producing heat with decentralised systems. When the wind and sun supply less power than expected, the combined heat and power units in the Virtual Power Plant generate the extra kilowatts required for grid stability (see pages 8 9) and produce heat which can be used immediately or stored in the buildings in which they are located. If there is an oversupply of energy as increasingly occurs it is the power-consuming heat pumps which are activated. Their heat can also be used straight away or stored for later. The heart of the Virtual Power Plant is the Vattenfall heat control room in Berlin, where in addition to the large district heating power plants the decentralised systems are also monitored, controlled and optimally run. Expansion up to the capability of a larger central power plant will be technically achievable in a short time. An electrical output of 200 megawatts and heat supplies for 200,000 housing units is already planned for (on wind power) The Virtual Power Plant The Virtual Power Plant 5

4 Overview Buildings with heat pumps Heat pumps have varying sizes and power ratings. So funktioniert das VIRTUELLE KRAFTWERK How the Virtual Power Plant works In a Virtual Power Plant, decentralised power generators such as combined heat and power units and energy consumers such as heat pumps are linked together as one unit and centrally controlled. This ensures an optimum balance in the power grid and creates room for renewable energies. While heating requirements are covered by decentralised generators, the power generated at the same time can be fed into the grid. Buildings with combined heat and power units Download the PDF: virtuelles-kraftwerk Combined heat and power units have varying sizes and power ratings. Central heat control room Centralised control of the systems spread across several locations is carried out at the heat control room. It is responsible for overall coordination of the interconnected systems. Vattenfall has decades of leading experience in the coordination of power flows, for example in the supply of district heating to 620,000 Berlin homes. Wireless communication with heat pumps and CHP units 1 Renewable energies The Virtual Power Plant can be controlled with great flexibility, and is guided by the share of wind energy in the grid. Particularly at times when large amounts of wind power are fed into the grid, heat pumps, especially, can be operated economically. 1 Heat pumps energy from the environment The heat source for a heat pump is ambient heat, such as is contained in the air. Using a cooling agent, it extracts its heat energy. By supplying electricity (e.g. from wind power), the cooling agent greatly compresses and reaches a high temperature, making it suitable for heating use. 2 3 Public power grid Berlin is supplied with power by the German and European integrated grid and by Vattenfall power plants. Small, decentralised systems such as combined heat and power units also feed the electricity generated into the grid. 3 2 Combined heat and power units the smart decentralised solution Combined heat and power (CHP) units are modular systems for generating electricity and heat. They are operated wherever heat is consumed. Gas-operated internal combustion engines are typically used to drive them. A CHP unit can predominantly produce electricity at grid peak load and buffer temporary excess heat in a heat tank. Power flow with high wind in grid 4 4 Power flow with low wind in grid Process steps with high wind in grid Process steps with low wind in grid Optimum grid utilisation Heat pump Heat tank Heat tank Combined heat and power unit Optimum grid utilisation 4 The grid load falls The heat generated The heat pumps The heat control The heat control The CHP units The heat generated Electricity production rises towards an towards an optimum can be stored in the use the excess room regulates room regulates produce electricity can be stored in level. The excess wind energy is put to economical use. heat tank for later use. wind power and generate heat from it. buildings with heat pumps via the wireless connection. buildings with combined heat and power units via the wireless connection. and heat. The electricity enters the grid and increases the grid load. the heat tank for later use. optimum level. The missing wind energy is substituted in an economical way. 6 The Virtual Power Plant The Virtual Power Plant 7

5 Feeding in Wind Power The Virtual Power Plant promotes the use of carbonfree electricity for heating. Vattenfall is bringing wind power into the cities. Building bridges The Virtual Power Plant enables the integration of more wind power When stormy weather hits the coast, wind turbines boom. Thousands of rotors along the North Sea and Baltic Sea feed a vast amount of electricity into the grid. If too much power comes from the coast, the surplus must be immediately spent. To compensate, conventional power plants are shut down, pumpedstorage power plants are started up and, in a final step, wind turbines are rotated out of the wind. Drivers on the roads of northern Germany may then experience a confusing situation: despite the strong winds buffeting the cars, wind turbines along the road stand idle. Integrating the wind energy in the power grid is a constant challenge for network operators. This is a consequence of electricity s properties. Electrical energy cannot be stored in large quantities but is inextricably bound to lines. At all points of the power grid, the precise amount of electrical energy required at any one moment must be available at all times. The amount of electricity and demand for it must always balance each other out. If the two values differ too greatly, the stability of the grid is endangered, with power outages one possible consequence. In the European integrated power grid, electricity flows at a frequency of 50 hertz. If demand for power is considerably lower than the actual amount of power fed in, the frequency rises above 50 hertz. Conversely, if more power is used than fed in, the frequency drops. The margin of acceptable deviation is extremely tight: in normal operation, the frequency fluctuates by no more than 0.05 hertz. If larger fluctuations occur, electronic equipment and generation systems are in danger of being damaged. If the frequency falls below 47.5 hertz, resonance vibrations, for example, could even destroy generators in power plants. The success story of renewables is therefore shaking up the structure of energy supply in Germany. Ever increasing numbers of wind and solar installations are supplying ever more energy. This is increasingly pushing the transmission line and distribution networks to the limits of their capacity. Consequently, the number of days on which network operators had to take action to control in particular the wind energy fed in has been continuously rising in recent years. Since 2008, interventions to the power grid have been required statistically every second day. According to a report by the Federal Network Agency, around 74 million kilowatt hours of power generated from renewables were lost in This power could not be fed into the grid and remained unused. If a four-person household is assumed to use around 4,000 kilowatt hours annually, a city of 18,500 households or 74,000 people could be supplied with this lost energy percent of the interventions in the power grid related to wind turbines, primarily in the northern and north-eastern grid regions of Germany in which the majority of them are located. And the problem is threatening to intensify: the German Federal Government intends to increase the share of renewables in electricity production from a current 16 to 30 percent by This makes the intelligent control of power generation and consumption more necessary than ever. The Virtual Power Plant offers one solution. In times of strong winds and plenty of sunshine, it can use the surplus, cheap electricity to start up the connected heat pumps. They convert the temporary electricity oversupply into heat which can be stored for up to half a day. The Virtual Power Plant thus helps to use more carbon-free electricity. As a result, Vattenfall is bringing wind power into the cities. But even a Virtual Power Plant has its limitations. The current power grid was designed for selling electricity from a few central power plants to a multitude of customers which mainly live in densely populated areas or have their businesses there. However, electricity from renewables is mainly produced on open land. According to the grid study by the German Energy Agency (dena), at least 3,600 kilometres of new high-voltage lines would have to be constructed for this purpose, including the integration of offshore wind energy in the grid. More transmission lines create more room for wind power, for which the Virtual Power Plant is building a bridge to the heat market. Despite the costs expected for the expansion and conversion of the power networks in the years ahead, the further expansion of wind energy is urgently needed for lasting energy supplies. Among energy supply companies, Vattenfall is an authority in the generation of wind energy. In the last year, the company operated wind turbines across Europe with 620 megawatts of output on the mainland and a further 680 megawatts in the North Sea and Baltic Sea. The total of over 900 turbines on land and at sea generated 3.84 terawatt hours of electricity. (monitoring report 2010 development of the electricity and gas markets) (dena grid study II) 8 The Virtual Power Plant The Virtual Power Plant 9

6 The Importance of the Heat Market Target: by the end of 2013, 200,000 households will be supplied with heat via the Virtual Power Plant. Potential of the Vattenfall Virtual Power Plant I Expansion by end of ,000 housing units Commissioning October ,000 housing units Further expansion by end of ,000 housing units Potential of the Vattenfall Virtual Power Plant II Connected housing units 6, , , ,000 Systems (potential capacity) (25,000) 500 (25,000) 1,000 (25,000) Heat market is taking off The secret of the Virtual Power Plant s success: heat Electrical output 10 MW 50 MW 100 MW 200 MW Energy consumption of private households, % electricity consumption (73 bn kwhl) Of all the options, why is it the heat market which has the potential to store the surplus renewable energy produced and make practical use of it? In discussions relating to the storage capabilities of electricity from wind power and photovoltaic Total: 644 billion kilowatt hours 88.7 % heat consumption (571 bn kwhl) BMWi, correct as at 12/2008 installations, in the recent past it has usually been other solutions which have been debated: storing energy in electric cars, in compressed air caverns, its use in pumped-storage power plants or the production of hydrogen. The fact is that at over 50 percent, the heat market covers the largest share of energy consumption in Germany. The remainder is shared between the Traffic and Transport and Electricity sectors. In 2007, for example, the total amount of energy used came to the enormous figure of approximately 2,400 terawatt hours and the heat market accounted for just under 1,300 terawatt hours of this. Private households use just under 90 percent of all the energy they require for heating and hot water the electricity for household appliances and lighting amounts to only around eleven percent. Heat is therefore the sleeping giant of climate protection which needs to be roused. One way of doing this is with improved building insulation and the installation of new and efficient heating systems. Only twelve percent of the approximately 18 million heating systems in Germany are less than ten years old and therefore count as state-of-the-art. On the other hand, the increased use of renewable energy sources lends itself to the generation of heat. Vattenfall also see great potential in the heat sector and is here drawing on its authority as Europe s largest district heating supplier. The principle of combined heat and electricity generation has been successful for decades in district heating. One of the secrets of the Virtual Power Plant s success lies in its ability to intelligently combine the heating requirements of hundreds of thousands of buildings in metropolises such as Berlin and Hamburg with power generation in an environmentally-friendly way. The experience and the technology deployed in the centralised control of major combined heat and power plants form the technical basis of the Virtual Power Plant. The central control room is equipped simultaneously to control up to 25,000 systems, irrespective of their respective locations. At the moment, there are therefore no limits to the growth of the power plant. (renewables special renewable heat) 10 The Virtual Power Plant The Virtual Power Plant 11

7 Customer Benefits Green heat made simple Combination package: heat pump with green electricity for homeowners In its initial phase, Vattenfall s Virtual Power Plant is initially connecting systems from three manufacturers involved as business partners in addition to the company s own systems. The heat pumps from Stiebel Eltron and the combined heat and power (CHP) units from SenerTec and SES Energiesysteme have already been installed on properties. In order quickly to incorporate new equipment in the Virtual Power Plant, Vattenfall has developed a standard all system manufacturers which want to enable their customers to join the system can use as a reference. VHPReady (Virtual Heat and Power) is the name of the technical standard for heat pumps and CHP units. Systems which meet the quality standards and the technical requirements of the VHPReady seal of quality can be connected to the Virtual Power Plant without any further installation work. In the light of extensive sharing of information between the heat control room and the separate systems, data security is top priority. Data communication between the control room and the systems is effected via a separate, secure wireless network. Furthermore, data communication is always only possible between the control room and the systems and not amongst the systems themselves. CHP units were previously only worthwhile for projects with high energy requirements. Thanks to rising demand, CHP units have now also become established for smaller needs. They can be retrofitted in old buildings, where for example exterior insulation is not possible. A mini CHP unit should be located in a sound-proofed enclosure and requires between three and nine square metres of space. Compared to the separate generation of electricity and heat, CHP units save up to 30 percent fuel and utilise around 90 percent of it. This may be both fossil fuel or renewables. Specialist planning and implementation, and above all the use of renewable energies saves CO 2 and therefore makes a key contribution to protecting the environment. Vattenfall has created a special package for homeowners: the energy supplier takes care of the installation of an efficient heat pump and provides its power supply from renewable energies along with it. Installation of the entirely carbon-free heat supply system is free of charge, the customer pays a base price for the supplied heat and a further payment based on consumption. The contract price is fixed at an agreed rate for at least two years, with contracts typically running for ten years. The total costs are different for each project, but never higher than with natural gas heating systems. Further benefits for the customer: Stable prices with professional energy management Improved security of supply with professional system operation Active contribution to climate protection through integration of renewable energies Transparency with clear documentation of generation and consumption Modern heat pumps generate some three to four times the energy from soil, water or air as they require for operation. Using the principle of combined heat and power, mini CHP units generate both electricity and heat. Problem-solver The benefit of connection to the Virtual Power Plant to the private or business customer is that he need not worry about whether his basement system is working correctly. In its own interest, Vattenfall never loses sight of whether the CHP units and heat pumps are operational or if there is a technical defect. The systems are monitored from the Vattenfall heat control room in Berlin. The system there immediately displays any malfunction. Any repairs required and the maintenance of the equipment is carried out by qualified local businesses. Photo: Stiebel Eltron 12 The Virtual Power Plant The Virtual Power Plant 13

8 In a Virtual Power Plant, decentralised power generators such as combined heat and power Technology units and energy consumers such as heat pumps are linked together as one unit and centrally controlled. This ensures an optimum balance in the power grid and creates room for renewable energies. While heating requirements are covered by decentralised generators, the power generated at the same time can be fed into the grid. Buildings with combined heat and power units Combined heat and power units have varying sizes and power ratings. The latest generation Central heat control room Centralised control of the systems spread Vattenfall has decades of leading experience in across Virtual several locations Power Plant: is carried intelligent out at the consumption the coordination and production of power flows, for example in the heat control room. It is responsible for overall supply of district heating to 620,000 Berlin homes. coordination of the interconnected systems. Renewable energies In the last two years, energy supply companies have emerged which describe the linking of many uniform decentralised combined heat and power units as a Virtual Power Plant. These suppliers install a system for their customers, agree with them the supply of natural gas as fuel and take responsibility for feeding in electricity and maintenance. The combined heat and power unit remains the property of the supplier. The Virtual Power Plant can be controlled with great flexibility, and is guided by the share of wind energy in the grid. Particularly at times The systems then usually operate when heat is locally required. At the same time, they feed the electricity not used locally into the grid irrespective of whether it is required at that moment or if there is an oversupply: not an optimum state of affairs for grid management. Public power grid Berlin is supplied with power by the German and European integrated grid and by Vattenfall power plants. Small, decentralised systems such By contrast, Vattenfall s Virtual Power Plant is guided by the share of wind energy in the grid. Its major advantage lies in the linkage of combined heat and power units and heat pumps as a flexibly controllable Wireless communication with heat pumps and CHP units system. It is the first power plant that is able, during heat production, to generate electricity with the combined heat and power units and also selectively use renewable electricity via the heat pumps. when large amounts of wind power are fed into the grid, heat pumps, especially, can be operated economically. While other energy supply companies only serve units from one specific manufacturer, Vattenfall is providing access to the Virtual Power Plant to operators of all CHP units and heat pumps. This is primarily relevant to owners of larger properties such as hotels and shopping centres. For property owners considering the purchase of a new system, Vattenfall, together with the manufacturers Stiebel Eltron (heat pumps) and both SenerTec and SES Energiesysteme (CHP units), has a suitable range on offer. The mature communications technology electricity via the digital generated wireless network into in the principle grid. means that any system in the world can be connected. as combined heat and power units also feed the 1 How do they work? The workings of heat pumps A heat pump operates on the same principle as a refrigerator just the other way around. It receives its energy from the air or soil. As a heating system, a heat pump is ideal for a well-insulated new building. The heat pump draws its heat energy from the respective medium geothermal energy and the air are the most frequently used. These are conveyed to the heat pump using a cooling agent. The cooling agent evaporates at even low temperatures and becomes gaseous, so that it can be compressed. This compression concentrates the heat energy it contains and increases the temperature of the pressurised cooling agent used. With the help of a heat exchanger, the heat is extracted and then the pressure lowered. The cooling agent thereby drops in temperature, returns to the circulation system and can absorb heat.... and combined heat and power units A combined heat and power unit consists of a stationary motor which produces both electrical current and heat. The heat does not escape unused but is utilised for heating and domestic hot water. In this way, the majority of the energy required is generated on-site in an environmentally-friendly and efficient way. With the linking of electricity and heat generation, these systems 3 operate highly efficiently and fuel utilisation of up to 90 percent is possible up to three times better than with conventional power plants. So that the small power plants genuinely pay off, the highest number of operating 2 hours must be reached, normally at least 4,000 hours a year. Private households only attain these figures with very high and Ambient heat Air Water In order to deliver natural heat, the pump must be operated with electricity. Modern heat pumps generate some three to four times the energy from soil, water or air as is fed into them. The key unit of measure is the annual performance factor (APF). An APF of four means that the heat pump requires one kilowatt hour of electricity to extract four kilowatt hours of heat energy from the environment. The higher the annual performance factor, the greater the efficiency of the heat pump. Exhaust gas Combined heat and power units the smart decentralised solution Hot water Combined heat and power (CHP) units Electricity are modular systems for generating electricity and heat. They are operated wherever heat is consumed. Gas-operated internal combustion engines are typically used to practically constant heat requirements. The mini drive them. A CHP unit can predominantly power plants for the basement are therefore primarily suitable for electricity buildings divided at grid into peak flats and load larger and produce buffer commercial temporary properties excess such as shopping heat in centres. a heat tank. Combined heat and power units are operated with either gas or biomethane. Power flow with low wind in grid 14 The Virtual Power Plant The Virtual Power Plant 15 4