Europe s Coming Challenges in Meeting Decarbonisation Objectives

Transcription

1 Europe s Coming Challenges in Meeting Decarbonisation Objectives Geoffrey J. Blanford, Ph.D. EPRI-IEA Workshop on Challenges in Electric Sector Decarbonisation 28 September 215, Paris

2 EU electric sector will be driven by renewables Many questions remain: How far and how fast? What mix of wind and solar? What regional distribution? What technologies will balance the system? Implications for conventional capacity: How much currently installed fossil capacity is slack? What value will existing fleet provide in the future? What about new investments? Depends on national policies vs. EU-wide implementation 2

3 Power Sector Under the EU-ETS level 1 Million tons CO2 8 6 Base Year Power Generation Emissions (Modeled) 43% CCGT / GT Hard Coal Brown Coal History Cap 4 2 8% % 3

4 EU-REGEN Model of Electricity Investment/Dispatch Jointly developed by EPRI and Ifo Institute, Munich Intertemporal optimization through 25 Detailed representation of renewable profiles Great Britain Benelux N Germany S Scandinavia EE-NW EE- NE Iberia France Alpine Italy EE-SW EE-SE EE = Eastern Europe Net Transfer Capacities (ENTSO-E) > 4 GW 2-4 GW 1-2 GW < 1 GW Planned 4

5 Renewable Resource Distribution Wind (on-shore) Solar 1 W 1 E 2 E 3 E 1 W 1 E 2 E 3 E 7 N 7 N Class 1 Class 2 Class 3 Class 4 Class 5 Class 6 Class 1 Class 2 Class 3 Class 4 Class 5 Class 6 6 N 6 N 5 N 5 N 4 N 4 N Based on MERRA reanalysis hourly dataset from US NASA,

6 Regional System Adequacy (one definition) Market-clearing condition requires that supply equal demand in each segment/hour in each region: Non-Intermittent Dispatch Net Discharge from Storage VRE feed-in Net Imports = Load * (1 + loss) We include an additional constraint that local available nonintermittent capacity must be sufficient to meet peak load: Non-Intermittent Available Capacity Storage Discharge + = Peak * (1 + loss) Capacity 6

7 EU Generation Mix: 8% by 25 Policy TWh Least-cost emissions reductions: no additional national targets or subsidies CSP PV Wind Gas-CCS Gas/Oil Coal-CCS Hard Coal Brown Coal Nuclear Bio-CCS Bio+ CHP-Gas/Oil Hydro

8 EU Installed Capacity: 8% by 25 Policy GW CSP PV Wind Gas-CCS Gas/Oil Coal-CCS Hard Coal Brown Coal Nuclear Bio-CCS Bio+ CHP-Gas/Oil Hydro Peak Load Residual Peak 8

9 EU Fossil Capacity After initial adjustment, gas capacity does not retire early Some slack capacity in 215 doesn t cover fixed O&M 12 GW Hard coal is retired before lignite Retired Early Installed Includes industrial CHP, maintained throughout 9 Lignite Hard Coal CCGT Other Gas/Oil

10 EU Cumulative New Capacity Investments 14 GW CSP PV Wind (off-shore) Wind (on-shore) Nuclear Bio-CCS Biomass Gas-CCS GT CCGT Coal-CCS Hard Coal

11 Energy-Only Price Distribution in EU, Existing CCGT Hard Coal 8 New CCGT Brown Coal per MWh Dispatch Cost (including carbon price of 28/t) Range & average across regions/vintages % 2% 4% 6% 8% 1% 11

12 Net operating revenue from energy and capacity, 23 (EU Average) 14 Still deep in the money 12 1 Both sources cover investment and fixed costs per kw-year Capacity payments required to cover fixed O&M Capacity Energy Fixed O&M 2 Existing CCGT Hard Coal New CCGT Brown Coal 12

13 Conventional capacity under decarbonisation Coal/lignite plants will inevitably scale down production However, generation falls faster than installed capacity Some units retire early, many stay online Fewer hours, lower margins in energy market Capacity payments are crucial for managing this transition Natural gas capacity (both CCGT and GT) expand Hours for CCGT increase, even with rising renewable share Still, approximately half of new CCGT net operating revenue from capacity payments Nuclear declines overall, only grows in East CCS only plays role with 95% target, even then only with bioenergy or gas coal CCS is far out of the money 13

14 Important factors not modeled here = Ongoing research priorities Operational constraints Unit commitment, especially start-up and shut-down costs Voltage and frequency stabilisation, system inertia Interaction with demand side Changing end-use mix could significantly change load shape DSR may be a cost-effective contributor to capacity needs Coupling with other sectors Economics of CHP under carbon constraint Power to X technologies (e.g. hydrogen, heat) 14

15 EPRI Webinar on EU Electric Sector Scenarios November 215, TBC Explore other results and scenarios with EU-REGEN, e.g. Role of renewable technologies, national targets Transmission scenarios Regional details Storage Unit commitment constraints See EPRI staff for more information 15

16 Together Shaping the Future of Electricity 16

17 Extra Slides 17

18 Regional Generation Mix (TWh) (8% by 25) 8 8 Britain Scandinavia EE (North) Hydro CHP-Gas/Oil Bio+ Bio-CCS Nuclear Brown Coal Hard Coal Coal-CCS Gas/Oil Gas-CCS Wind PV CSP Energy for Load 18

19 Regional Generation Mix (TWh) (8% by 25) 8 8 France Germany Benelux/Alpine Hydro CHP-Gas/Oil Bio+ Bio-CCS Nuclear Brown Coal Hard Coal Coal-CCS Gas/Oil Gas-CCS Wind PV CSP Energy for Load 19

20 Regional Generation Mix (TWh) (8% by 25) 8 8 Iberia Italy EE (South) Hydro CHP-Gas/Oil Bio+ Bio-CCS Nuclear Brown Coal Hard Coal Coal-CCS Gas/Oil Gas-CCS Wind PV CSP Energy for Load 2

21 EU Fossil Capacity in 215: Over-subscribed? slack coal mainly in Scandinavia, Eastern Europe 22 GW slack gas/oil in Britain, Iberia, Italy 25 GW 32 GW Model solution in 215 finds some slack capacity: earnings don t cover fixed O&M 1 Installed GW 8 6 Covers Fixed O&M Covers Fixed O&M without RSA Constraint 4 2 Regional System Adequacy constraint implies higher capacity prices, less slack Lignite Hard Coal CCGT Other Gas/Oil 21

22 EU Average Full Load Hours by Technology Full Load Hours Solar PV Wind (on-shore) Bio-CCS Nuclear CCGT Hard Coal Brown Coal

23 New CCGT is much lower in the stack 8 New CCGT 7 Full Load Hours Existing CCGT Solar PV Wind (on-shore) Bio-CCS Nuclear CCGT Hard Coal Brown Coal

24 Efficient Role of Renewables in EU Wind in North is most valuable renewable resource Solar in South is competitive (with a carbon price) when costs are lower than: ~1 euro/kw for PV ~3 euro/kw for CSP (with 2.5x solar multiplier) Least-cost mix involves mainly on-shore wind in Britain, Scandinavia, France, and Baltic / North Sea coasts Wind and solar reach maximum generation share ~33% This mix could be superseded by national objectives 24