Integrating Wind into the Chinese Power Sector: Development, Barriers and Solutions

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1 Integrating Wind into the Chinese Power Sector: Development, Barriers and Solutions Xinyu Chen Harvard China Project The Energy Policy Seminar Series Harvard Kennedy School March

2 Wind Power Development: Global Trend Added Capacity in % 21% 4% 52% 8% 13% Cumulative Capacity % 34% 3% 10% 17% 6% China US Germany India UK Others

3 Wind Power in China: Future Goal Carbon abatement 20% non-fossil sources in total energy 2030 (INDC) 60-65% reduction in Carbon intensity relative to GW by 2030 from Energy Research Institute Air Quality Improvement Strengthened control on primary PM, SO 2, No x in power sector Targets 200 GW installed Capacity by 2020 Renewable Energy Law Feed-in Tariff Dispatch Priority 100 GW in 2015 at 12 th Five Year Plan

4 Geographical Distribution

5 Peak Power Demand/ Installed Wind Capacity (GW) Geographical Distribution Current and future installed wind capacity (diameter) and peak power demand (height of circle center) of major provinces in China

6 Curtailment: A Major Barrier for Wind Power Development in China $ 1.6 billion loss Curtailed wind power accounted for 16% of total wind generation in 2011 National Energy Bureau has suspended further development of wind resources at onshore bases in 2016 where curtailment is larger than 20%

7 Challenge I: Imbalanced Geographical Distribution

8 Significantly High Local Wind Penetration Level According to State Grid, wind power penetration in some wind regions is approaching the highest levels in the world, comparable with Denmark and Spain. Max daily wind production ratio of total consumption The maximum daily wind production reached 94%, 31%, 33% and 32% of the corresponding daily consumption in Eastern Inner Mongolia (E.IM), Western Inner Mongolia (W.IM), Gansu, and Jilin respectively.

9 Challenge II: Inflexible Generation Mix Thermal power dominates in 3-north region: Flexible sources, such as hydropower, pumped storage, gas turbines, oil generators, are insufficient, leading to inadequate load-following and reserve provision. 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% North China Northeastern Northwestern Germany US Spain China China Coal Gas Nuclear Hydro Wind Solar China data end of 2013, other countries 2014.

10 Challenge III: Heat-driven Operation of Combined Heat and Power (CHP) Units Heat demand distribution The share of CHP in thermal units Limited Flexibility of CHP Northeast China 70% North China 50% National Average 25% Must-run units in heating season Possible range of power output decreases with the increase of heat demand Heat demand is predetermined by heating companies Typically range between 70%- 90% of the nameplate capacity in heating season.

11 Challenge IV: Rigid Regulatory Structure Deregulation (2003) Five generation groups Two grid companies

12 Challenge IV: Rigid Regulatory Structure National Dispatch Center(1) Annual/monthly inter-regional transmission plan and dispatch of major units (e.g. Three Gorges Dam) Regional(5) Annual/monthly inter-provincial transmission plan Provincial(26) Provincial energy balance and operational dispatch Municipal(309) County(1702)

13 Potential Cost Effective Solutions Interregional Transmission Coordination Integration with Heating System Electric Vehicles

14 Opportunities for Increasing Wind Integration and Reducing Emissions 1. Strategy of Coordinated Interregional Transmission: Northeastern region (2020) 2. Energy System Integration between Power and Heating Systems: Beijing-Tianjin-Tangshan ( Jing- Jin-Tang ) region (2015) Hourly simulation model considering characteristics of individual units Annual assessment of economics 3. Influence of EV Development on Wind Integration: Beijing area (2020)

15 Opportunities for Increasing Wind Integration and Reducing Emissions 1. Strategy of Coordinated Interregional Transmission: Northeastern region (2020) 2. Energy System Integration between Power and Heating Systems: Beijing-Tianjin-Tangshan ( Jing- Jin-Tang ) region (2015) Hourly simulation model considering characteristics of individual units Annual assessment of economics 3. Influence of EV Development on Wind Integration: Beijing area (2020)

16 How to Coordinate Interprovincial Transmission? EIM LN HLJ JL Four possible strategies in 2020 : A) BAU: to determine the interprovincial transmission on annual and monthly basis; B) Taking advantage of the interprovincial available transmission capacity, sharing reserve among different regions; C) Allowing daily scheduling of interprovincial transmission, but keep reserve requirement within the province; D) Optimizing both transmission and reserve on a regional grid.

17 Monthly Wind Curtailment Rate under Different Transmission Scenarios

18 Thermal and Wind Generation Changes Under Different Transmission Scenarios

19 Potential Cost Effective Solutions Interregional Transmission Coordination Integration with Heating System Electric Vehicles

20 Distribution of Heating Demand in China Geographical distribution of heating demand in 2010

21 The Framework of Integrated Power and Heat Energy System Power grid Thermal generator CHP Coal boiler Heat storage Electrical boiler Curtailed Wind Integration Wind Curtailed Wind Heat pump ETS Power demand Heating demand District heating Supply Heating network Demand

22 Opportunities for Increasing Wind Integration and Reducing Emissions The total annual power demand in this region is equivalent to all Nordic countries combined or half of the western interconnected in US. 2. Energy System Integration between Power and Heating Systems: Jin-Jing-Tang area (2015) One power system and 7 district heating systems Projected 23GW wind level Heating Options: Electric boiler (E-boiler): Half of heating capacity from electric boilers ($0.078 million/mw) Heat storage: Same capacity as electric boiler in each heating district ($0.037 million/mwh)

23 Integrated Power-Heat Optimization Model Heat demand Power demand Unit info Topology Heating zone configuration Input Integrated Energy Optimization Model Thermal unit CHP H-Storage Power Network Heating Network Wind Power E-boiler H-boiler Power balance Heat balance Hourly output Wind Curtailment Operational cost Revenue Emission Output The objective is to minimize the cost from both power and heating sector Applicable for multi-heating zone Constraints on network, ramping, units considered Models for CHP, Heat Storage embedded

24 Hourly Power Balance

25 Potential Cost Effective Solutions Interregional Transmission Coordination Integration with Heating System Electric Vehicles

26 Opportunities for Increasing Wind Integration and Reducing Emissions 1. Strategy of Coordinated Interregional Transmission: Northeastern region (2020) 2. Energy System Integration between Power and Heating Systems: Beijing-Tianjin-Tangshan (Jing- Jin-Tang, JJT) region (2015) 3. Influence of EV Development on Wind Integration: Beijing area (2020)

27 Wind Power vs Electric Vehicles? Electric Vehicles are found on average to emit more CO 2 and conventional pollutants than gasoline vehicles in China because of the coal-dominated power generation structure. Choices: A. Public Buses vs. Light Duty Vehicles? B. Fast Charging vs. Slow Charging?

28 The optimization framework (c) Aggregation and optimization Departure (home) Arrival work place Vehicles (a) Driving behavior Fleet (b) Aggregate control Aggregated constraints of individual vehicles into constraints of fleet

29 The impact of EV charging on wind integration 30k Public bus fast charging 1 million LDV fast charging Available wind With EV 1 million LDV slow charging Without EV

30 Environmental Impacts Main Findings: Electrification of 30k public buses in Beijing could reduce total NOx by another 10% Fast charging is less effective than slow charging in decreasing CO 2 and NO x emissions Coordinated slow charging would reduce the wind curtailment and thus emissions

31 Conclusions Steps that can be undertaken to increase grid integration of wind power in China: Greater coordination of interregional transmission and reserves Deployment of electric boilers and thermal storage in the heating sector Development of electric vehicles using slow charging systems that take advantage of wind in the off-peak power demand period

32 Acknowledgements Collaborators: Harvard University: Michael McElroy, Chris Nielsen, Xi Lu Huazhong University of Science and Technology: Shiwu Liao, Xingning Han Tsinghua University: Chongqing Kang, Zhiwei Xu Funders: Ash Center for Democratic Governance and Innovation, Harvard Kennedy School Kwok Gift to the Harvard China Fund

33 References CHEN Xinyu, Zhiwei Xu, Chris Nielsen, Michael McElroy, Plug-in electric vehicles: Opportunities to reduce emissions of CO 2 and conventional pollutants in China, Environmental Science & Technology, Under review. CHEN Xinyu, KANG Chongqing, Mark O Malley. Increasing the Flexibility of CHP with Heat Storage and an Electrical Boiler for Wind Power Integration in China: Modeling and Implications. IEEE transaction on Power Systems, (4), pp CHEN Xinyu, Xi Lu, Michael McElroy, Chris Nielsen, Chongqing Kang. Synergies of Wind Power and Electrified Space Heating: Case Study for Beijing, Environmental Science & Technology. 2014, 48 (3), pp Kang Chongqing, CHEN Xinyu, Qianyao Xu, et al. Balance of power: Towards a More Environmentally Friendly, Efficient, and Effective Integration of Energy Systems in China. IEEE power & energy magazine, September/October, 2013 CHEN Xinyu, Michael McElroy, et al. Integrated Energy Systems for Higher Wind Penetration in China: Barriers, Technical Solutions and Incentives. IEEE transaction on Power Systems. Preparing for submission.

34 Thanks!