Integrating Variable Renewable Energy. Andrew Conway 18 March 2015

Transcription

1 Integrating Variable Renewable Energy Andrew Conway 18 March 2015

2 AGENDA Definitions, scope & approach Challenges & context Frame-conditions integration measures Case studies Conclusions & recommendations 2

3 SCOPE & AIMS To assess the relative applicability and effectiveness of measures to integrate variable renewable energy Based on actual interventions to date across 9 jurisdictions Drawing out lessons for policy makers The focus of the study has been on measures that can be applied in market based jurisdictions 3

4 KEY DEFINITIONS Variable Renewable Energy (VRE) Renewables technologies that rely on fluctuations in short-term availability of resource, includes: Wind, Solar, Tidal, Hydro run-of-river and Wave Flexibility Ability of generator, load, or storage to vary power output or demand in a controlled manner VRE Integration Incorporation of VRE into a power system 4

5 CHALLENGES FOR POLICY MAKERS new policies will need to be implemented 1. Ensuring VRE deployment is system friendly, where possible. 2. Making the most of the current installed flexibility. 3. Encouraging investment in the required amount of flexibility. 4. Making the most of scarce grid resources. 5

6 CONTEXT jurisdictions have different challenges and opportunities depending on their context Source: Mott MacDonald and system operators 6

7 FRAME CONDITIONS* - measures for integrating VRE Dispatch & market sophistication Grid code Grid representation VRE incentives $ Interconnector management Regulator incentives System services Use of forecasting * The broad suit of regulations, market design and rules, operational codes and practices 7

8 UK Germany Dispatch sophistication and maturity 5 Grid code VRE incentives and dispatch 4 3 Dispatch sophistication and maturity 5 Grid code 1 Use of forecasting 0 Interconnector management System services market Regulator incentives on SO 1 Use of forecasting 0 Interconnector management System services market Grid representation Grid representation Start year Regulator incentives on SO VRE incentives and dispatch 4 Now Start year Now 8

9 VRE INCENTIVES..FiT, premium, tender or market..imbalance risk..curtailment compensation..require dispatch in market Increasing exposure to energy market can shape portfolio, distribution and operation 9

10 In Alberta wind gets market price only Developers moving north, where wind regime allows better match to demand (and prices) Source: Environment Canada, Alberta Environment and the US Climate Data Centre (left hand map); Albert Energy and Mott MacDonald (right hand map); EDC Associates 10

11 INTERCONNECTOR MANAGEMENT..long term agreements..explicit auctions..market coupling..balancing and reserve coordination Increasing exposure to energy market can shape portfolio, distribution and operation 11

12 PROCESS OF MARKET COUPLING IN EUROPE Source: European Market Coupling Company 12

13 Grid control cooperation agreements in Germany..Four TSOs in Germany..in 2007 begun collaborating on reserves..extended internationally in 2011 Collaboration results in reduced reserve requirement and cost Source: GE Energy 13

14 SYSTEM SERVICES..include demand & storage..allow VRE to participate..improve sophistication of markets..develop new products (inertia, ramping etc.)..[capacity market] Sophisticated system services market & products reward flexibility 14

15 ERCOT and Ireland plan system service reform Reforms will provide incentives for increased flexibility and allow for greater penetration of VRE Source: ERCOT and Mott MacDonald 15

16 DENMARK context Wind Solar Gas Coal Oil Biomass & waste Interconnection Variable Dispatch able 0% 50% 100% 150% 200% 250% 300% 350% Capacity as percent of peak demand (6.1 GW) 400% Source: Energinet.DK and Mott MacDonald Significant capacity is CHP Interconnection high, almost 100% of peak demand Wind at 79% of peak demand Source: Energinet.DK 16

17 DENMARK measures Dispatch sophistication and maturity 5 VRE incentives and 4 Grid code dispatch Regulator incentives Use of forecasting 0 on SO Interconnector management System services market Grid representation Start year Now 17

18 HOKKAIDO context Wind Coal Other Solar Nuclear Interconnection Gas Oil Storage Hydro Geothermal Variable Dispatch able 0% 20% 40% 60% 80% 100% 120% 140% 160% Capacity as percent of peak demand (5.7 GW) 180% Source: HEPCO and Mott MacDonald Vertically integrated Flexible capacity, but interconnection is relatively low Capacity well distributed Source: HEPCO 18

19 HOKKAIDO - measures Hokkaido is has a vertically integrated utility (HEPCO). This is a fundamentally different regulatory regime, for which our assessment is not applicable 19

20 CONTEXT DEFINES CHALLENGE AND CONSTRAINS APPLICABILITY OF MEASURES Source: Mott MacDonald 20

21 CONCLUSIONS (1/3)..Interconnected countries can pool flexible resource by coupling markets and cooperating on reserve/balancing..isolated countries need to make the most of internal flexibility..countries with low interconnection and internal flexibility have the greatest challenge 21

22 CONCLUSIONS (2/3)..dispatch sophistication can be improved, in combination with forecasting, to make the most of internal flexibility..exposing VRE to the market encourages system friendly deployment..moving to zonal of LMP makes the most of grid resource and provides locational investment signals 22

23 CONCLUSIONS (3/3)..grid code requirements for VRE are continuously developing; high wind ride through and synthetic inertia could be required in the future..system service products are being developed to incentivise inertia, fast frequency response and ramping capabilities 23

24 KEY RECOMMENDATIONS Consider deployment patterns early Build-in grid code measures sooner rather than later. Move to near real time re-dispatch supported by sophisticated forecasts Learn from others but do one s own studies to assess impacts Co-operate with other jurisdictions Market developments, including system service reform, for enhanced flexibility 24

25 IB contact: Guy Doyle, IB contact: Andrew Conway, Michael Paunescu 25

26 CASE STUDIES INSTALLED VRE covering a wide range of penetration level and mix of technologies Ontario Alberta California Hokkaido ERCOT Wind GB Island of Ireland Spain Denmark 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Germany Installed VRE capacity as percentage of peak demand Solar Source: Mott MacDonald and system operators,

27 CASE STUDIES INTERCONNCETION - a wide range of levels and type Synchronously independent Synchronously connected ERCOT GB Alberta Hokkaido Island of Ireland Spain Germany Ontario California 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Denmark* Interconnection as percentage of peak demand of interconnection Source: Mott MacDonald and system operators,

28 CASE STUDIES FLEXIBLE CAPACITY - Covering a wide range of conventional capacity mix Storage Nuclear Coal Hydro Oil Gas 180% 160% 140% 120% 100% 80% 60% 40% ERCOT Ontario Alberta Island of Ireland GB Hokkaido Germany California 0% Denmark* 20% Spain Installed dispatchable capacity as a percentage of peak demand Other Source: Mott MacDonald and system operators, 2014, showing net capacity 28

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