Cost/Benefit Analysis of further Expansion of the Austrian Transmission Grid to enable further RES-E Integration

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INNOVATIVE GRID-IMPACTING TECHNOLOGIES ENABLING A CLEAN, EFFICIENT AND SECURE ELECTRICITY SYSTEM IN EUROPE Bettina Burgholzer Energy Economics Group (EEG) Vienna University of Technology 14 th IAEE

2 INNOVATIVE GRID-IMPACTING TECHNOLOGIES ENABLING A CLEAN, EFFICIENT AND SECURE ELECTRICITY SYSTEM IN EUROPE Bettina Burgholzer Energy Economics Group (EEG) Vienna University of Technology 14 th IAEE European Energy Conference Rome, 31 October 2014 Cost/Benefit Analysis of further Expansion of the Austrian Transmission Grid to enable further RES-E Integration The sole responsibility for the content of this presentation lies with the authors. It does not necessarily reflect the opinion of the European Union. Neither the EACI nor the European Commission are responsible for any use that may be made of the information contained therein.

3 2 Overview About the project Methodology of bottom-up model Austrian Case description Selected results of scenarios 2020: without/with expansion of Salzburg Transmission Power Line 2050: implementation of FACTS & DLR Conclusions

3 About the project Contract number: IEE/11/017 / SI2.

Duration: May 2012 - April 2015 Budget: EUR 1,958,528 GridTech is a project co-funded by the European Commission under the

4 3 About the project Contract number: IEE/11/017 / SI Full title: Impact Assessment of New Technologies to Foster RES-Electricity Integration into the European Transmission System Duration: May April 2015 Budget: EUR 1,958,528 GridTech is a project co-funded by the European Commission under the Intelligent Energy Europe Programme. GridTech s main goal: Conduct a fully integrated assessment of new grid-impacting technologies and their implementation into the European electricity system. EC contribution: EUR 1,468,896

5 4 Project objectives & structure Assess the non-technical barriers for transmission expansion and market compatible renewable electricity integration in Europe Develop a robust cost-benefit analysis methodology on investments Apply and verify the cost-benefit analysis methodology for investments in the transmission grid Achieve a common understanding among key actors and target groups on best practise criteria Transmission expansion: non-technical barriers Innovative technologies screening Pan-European study (top-down approach) RES integration: market issues Cost-benefit methodology Regional case studies (bottom-up approach) Deliver tailor-made recommendations and action plans Results and recommendations

6 5 Pan-European study EU30+ zonal model Top-down approach: Used tool: MTSIM, developed and analyses done by Ricerca sul Sistema Energetico - RSE S.p.A. Milano Target countries (bottom-up modelling)

7 6 Bottom-up methodology: Input/Output and Optimisation EDisOn (Electricity Dispatch Optimization): Linear Optimisation Problem (LOP) formulated in MATLAB and solved by Gurobi-Solver! (cp. (Burger et al., 2007), (Shahidehpour et al., 2002)) Target function: Minimisation of the total system costs Constraints: Demand Capacity Ramping Limits Reservoirs balance Spill of hydro and RES-E generation technologies DC power flow (PTDF-Matrix, cp. (Van den Bergh et al., 2014)) Input hourly based: Demand, Wind, PV, RoR and PHES inflow power plant data primary energy prices, CO 2 certificate prices and specific CO 2 emissions WP4: Exchanges and Prices Market Model Linear Optimisation Problem (LOP) minimisation of the total generation costs s.t. technical constraints Solving Model with Gurobi- Solver Output hourly based RoR, PHS and thermal production, Exchanges, Flows, Storage level, wholesale electricity prices, etc. CBA Calculation of benefits (welfare, CR, changes in fossil fuel needs and CO2 emissions)

8 7 Economic outputs How to model? FACTS Sensitivity analyses Flexibility DLR NTC=f(Temperature) HVDC Point to point How to measure? Increase of the overall welfare Increase of the overall welfare Increase of the overall welfare Should we combine flexibility and controllability to one economic output? Security of supply Not Supplied Energy (NSE) NSE (VoLL=Value of Lost Load) How to model security of supply / not supplied energy? And how to measure? Controllability FACTS, HVDC NSE, Spillage, Congestion rent (Price differences between the nodes of a transmission line) x (load flow) Million per year Congestion losses Redispatch costs Redispatch costs Social welfare producer and consumer surplus Price, demand, production costs Million per year Fossil fuel need Calculation of the need of fossil fuel Primary energy demand of the different kinds of thermal power plants (generation/(lowercalorificvalue*eff)) CO 2 -Emission Calculation of the total CO 2 emission of each CO 2 -emissions per year country and per node (Million tons of CO 2 ) RES curtailment Energy in excess Energy remunerated (e.g. at market prices / feed-in tariff)

% 14th IAEE European Energy Conference 8 Modelling FACTS & DLR Parameters: DLR R H α max = 30 Decision Variable: α lpst,h Constraints: phase angle 140 120 100 80 Temperature Source: presentation at

9 % 14th IAEE European Energy Conference 8 Modelling FACTS & DLR Parameters: DLR R H α max = 30 Decision Variable: α lpst,h Constraints: phase angle Temperature Source: presentation at RWTH Aachen (Puffer, 2010). DLR Wind Wind Util < % < % < % Source: dena-netzstudie II, with hours Complex conductance Incidence

9 Austrian Case description 24 nodes: 17 correlate with the main substations within Austria and 7 neighbouring ones 35 transmission power lines (TPL):

2030 2050 HVAC line Carinthia DLR and FACTS HVDC line (e.g.

10 9 Austrian Case description 24 nodes: 17 correlate with the main substations within Austria and 7 neighbouring ones 35 transmission power lines (TPL): All parallel transmission power lines between the nodes are taken together to one representative transmission power line. Grid Technology Focus 2020 HVAC line Salzburg HVAC line Carinthia DLR and FACTS HVDC line (e.g. Brenner) DLR and FACTS Storage (PHS) 1030 * CH 380 kv 220 kv 110 kv DE2 VBG 2600 Switzerland * TIR_w Germany TIR_e * DE1 Italy IT 518 SBG_s OTIR 550 * interaction with Pan-European study by RSE OOE_w SBG_n KTN_w STMK_w 389 OOE_e KTN_e 298 SI * Czech Republic 2518 STMK * Source: Austrian Power Grid, Masterplan STMK_s Slovenia 5400 NOE W CZ NOE_n 5400 * NOE_s HU Hungary Source: own illustration.

11 EUR/MWh 14th IAEE European Energy Conference 10 Selected results: wo/w TPL expansion 2020 (2020A) without expansion (2020B) with expansion CO 2 certificate price 10 EUR/ton CO 2 (2020A) (2020B) (2020A) Salzburg TPL (GWh) - 0,05 0,10 0,15 0,20 0,25 0,30 0,35 0,02 Load factor of TPLs > 70 % (cumulated number of hours) RES curtailment 0,33 Total demand: TWh (2020B) 0,01 0,30 Total installed Capacity: 31 GW, of which are Wind: PV: RoR: PHS: 3.2 GW 1.2 GW 5.6 GW 10.2 GW wo/w Salzburg expansion: Not Supplied Energy (NSE): 0 MWh Peak Price duration curve mean (2020A): 34,97 / mean (2020B): 34, time (hours) (2020A) (2020B)

11 Selected results: wo/w TPL expansion 2020 (2020A) (2020B) Load factor of

Export/Import AT-DE (2020A) without expansion (2020B) with expansion CO 2

67 TWh Export from AT Import to AT Export from AT Load factor of PHS Import

12 11 Selected results: wo/w TPL expansion 2020 (2020A) (2020B) Load factor of TPL Salzburg vs. Export/Import AT-DE (2020A) without expansion (2020B) with expansion CO 2 certificate price 10 EUR/ton CO 2 Total demand: TWh Export from AT Import to AT Export from AT Load factor of TPL Salzburg vs. PHS Import to AT Total installed Capacity: 31 GW, of which are Wind: 3.2 GW PV: 1.2 GW RoR: 5.6 GW PHS: 10.2 GW wo/w Salzburg expansion: Not Supplied Energy (NSE): 0 MWh

13 GWh/h Congestion Rent (1.000 EUR) Nodal Prices (EUR/MWh) With Salzburg expansion GWh/h Congestion Rent (1.000 EUR) Nodal Prices (EUR/MWh) Without Salzburg expansion 14th IAEE European Energy Conference 12 Selected results: wo/w TPL expansion annual CR: EUR mean price: SBG n EUR/MWh, SBG s EUR/MWh SBG n SBG s T 0.5 NPV CR = 1 + i t CR t, CBA: t=1 NPV(CR) InvestmentCost > 1 A nodal pricing approach within a control zone would not give enough incentives to invest in extending the TPL in Salzburg utilization of TPL hours 2 annual CR: EUR mean price: SBG n EUR/MWh, SBG s EUR/MWh SBG n SBG s regulated grid tariffs are still necessary utilization of TPL hours

14 -2% 1% 0% 2% 8% 14th IAEE European Energy Conference 13 Selected results: with FACTS & DLR in 2050 (2050A) reference scenario (2050B) with FACTS & DLR Assumptions: Every TPL can be adjusted by phase shifters ( 30 ) Dynamic Line Rating (DLR) based on wind intensity and temperature CO 2 certificate price: 100 EUR/ton CO 2 Total demand: 90.7 TWh Total installed Capacity: 53 GW, of which are Wind: 7 GW PV: 18 GW RoR: 6.7 GW PHS: 14 GW Total generation costs for Austria can be reduced by 28% (663 Mio. EUR) CO 2 emissions can be reduced by 3% (127 kt CO 2 ) (2050A) (2050B) (GWh) % 6% 4% 2% 0% -2% -4% RES generation 45 hydro generation 57 turb generation RES curtailment pump consumption 116 Wind curtailment PV curtailment RoR curtailment thermal generation Difference B-A 1% 0% 2% 8% -2% Curtailment: Wind -89%, PV -58%, RoR -61%

15 14 Conclusions for the time horizon 2020 & 2030 TPL expansion (from 220kV to 380kV) in Salzburg and in Carinthia is very important for closing the Austrian 380 kv circle Significant for national and European RES integration (connection of wind in the east and PHS in the west) for the time horizon 2050 FACTS and DLR can reduce RES curtailment significantly for Cost/Benefit Analysis Congestion Rent (CR) as a revenue for CBA approach only makes sense if it is an expansion of a cross-border connection regulated grid tariffs are still necessary in the future, especially within a control zone

16 15 For more information about the project, please visit: Thank you! Photo credits: ABB, Siemens, Verbund, TenneT, OE, WIP

17 16 References M. Burger, B. Graeber, and G. Schindlmayr, Managing energy risk: An integrated view on power and other energy markets. Chichester, England, Hoboken, NJ: John Wiley & Sons, M. Shahidehpour, H. Yamin, and Z. Li, Market operations in electric power systems: Forecasting, scheduling, and risk management. [New York]: Institute of Electrical and Electronics Engineers, Wiley-Interscience, K. Van den Bergh, E. Delarue, and W. D'haeseleer, DC power flow in unit commitment models. TME Working Paper - Energy and Environment, R. Puffer, dena-netzstudie II, Integration erneuerbarer Energien in die deutsche Stromversorgung im Zeitraum mit Ausblick 2025,

18 17 Appendix: Grid-impacting technologies Onshore and offshore wind energy Large-scale solar technologies: Concentrated Solar Power (CSP) and Photovoltaic (PV) Electricity generation technologies, with a focus on variable RES-E Pumped Hydro Energy Storage Compressed Air Energy Storage Bulk energy storage technologies Demand Response Technologies/ Measures and electric vehicles HVDC - High Voltage Direct Current, both VSC (Voltage Source Converter)- based and CSC (Current Source Converter)-based FACTS - Flexible Alternating Current Transmission System PST - Phase Shifting Transformers WAMS - Wide Area Monitoring System DLR/RTTR - Dynamic Line Rating/Real- Time Thermal Rating-based devices Transmission technologies directed at improvements in network control and flexible electricity system operation

Cost/Benefit analysis of further expansion of the Austrian transmission grid to enable further Integration of renewable electricity generation (RES-E)

Bettina Burgholzer Energy Economics Group (EEG) Vienna University of Technology AAEE Student Chapter Vienna, 26 th March 2015 Cost/Benefit analysis of further expansion of the Austrian transmission grid