Balancing Wind with Large Scale Hydro. Håkon Egeland, Vice-President, Statkraft Energy, Norway London 6 June 2011

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1 Balancing Wind with Large Scale Hydro Håkon Egeland, Vice-President, Statkraft Energy, Norway London 6 June 2011

2 Outline Short about Statkraft Some relevant experiences Expected development in the future North- European power system Possibilities and challenges for the Norwegian hydropower system

3 STATKRAFT in EUROPE today No. 1 No. 3 86% 98% WITHIN EUROPEAN FLEXIBLE ENERGY PRODUCTION I NORDIC ENERGY PRODUCTION RENEWABLE ENERGY FLEXIBLE ENERGY PRODUCTIION Nordic generation assets: Norway: Statkraft s hydropower capacity : MW Statkraft windpower 244 MW Gas power 210 MW Total capacity Norway : MW Max consumption Norway: MWh/h Sweden: Statkraft s hydropower capacity Wind power Finland: Statkraft s hydropower capacity side MW 9 MW 66 MW 149 hydropower plants in Norway 58 hydropower plants in Sweden 11 hydropower plants in Germany 4 hydropower plants in Finland 3 hydropower plant in Wales 4 gas power plants in Germany 1 gas power plant in Norway 3 wind farms in Norway

4 Experience: Wind power plant Smøla (155 MW) December 2009 Sold Elspot Bought BM Sold BM side 4 Sold 26,3 GWh in Spot market Sold 8,3 GWh in Balancing market (BM) Bought 10,1 GWh in BM Substantial short term variation Market operation challenging for owner

5 Average hourly planned production [MW] 1290 Experience: Norwegian Hydro power Ulla-Førre plant from 25. May to 1. June 2011 Planned production Spot price Spot pris [ /MWh] Page THIS IS A DUMMY TITLE Considerable flexibility in many plants Substantial potential for increased flexibility 30

6 Experience: Flexibility already needed Germany 2-5 October 2009 Wind Lignite Power price Nuclear Coal Gas 6 OED

7 Experience: New HVDC cable (SK 4) Selling balances services through cable New cable under construction 100 MW of 700 MW reserved for ancillary services for 5 years MW Primary reserves 10 out of 32 MW Secondary reserves 100 out of 140 MW Tertiary reserves High Potential Was important for making the project profitable 30 sec min. time Many skeptical to reserve cable capacity for ancillary services Page 7 THIS IS A DUMMY TITLE 30 sec min.

8 STRONG GROWTH IN FLUCTUATING ENERGY SOURCES Wind MW MW PV MW MW Germany Wind MW MW PV MW MW Page 8 Sources: EurObservEr,;European Commission EREC; EWEA, EPIA

9 Substantial need for increased flexibility Exampel: UK power system today and in 2030 (Poyry) Substantial increases in intermittency Need for regulation and flexibility to support this Can Norwegian Hydro power contribute? What are the challenges? 9

10 NORWEGIAN POSSIBILITIES Close to 50 % of the total hydro reservoirs in Europe 84 TWh Three alternatives: 1. Change the operation pattern in existing plants 2. Increase installed capacity 3. Build pumped hydro storage in connection with existing reservoirs Both increased capacity and pumped storage is possible

11 1 - Need interconnector capacity and regulatory approval Capacity planned but it takes time and is expensive Need regulatory approval Page 11 THIS IS A DUMMY TITLE

12 2 - Need market/buyer Which market/product would it be mot feasible no utilize hydro flexibility in? Expected prices, volumes and requirements for different products How to best utilize interconnectors Restrictions in hydro power operation and capacity Needed agreements and possible partnership What does it cost to get the hydro product to the market? Cost transporting power (grid tariffs etc.) Cost in hydro system by changes in operation and possible upgrades Possible restrictions Page 12 THIS IS A DUMMY TITLE

13 3 May require increased hydro power capacity Technical potensial - Southern Norway Pump Storage Plants (PSP) possibilities depend on limitations in the change of water level in upper and lower reservoirs and duration for pumping / generation. PSP Capacity (MW) Increased capacity Change in waterlevel duration pumping mode exisiting plants 24 hours 7 days 60 days (MW) ,5 m/hour ,1 m/hour ,01 m/hour Upper reservoir Lower reservoir PSP New capacity side 13 Fjord / Occean

14 /MWh MAIN CHALLENGES Political and regulatory issues National and EU regulations Transmission capacity and regulation Norwegian issues Environmental aspects Security of supply Public acceptance Commercial models Security for long term investments Market design issues Gjennomsnittlig prisstruktur over uken i Tyskland og Syd-Norge Average weekly price structure Germany and Norway, EXX NO

15 SUMMING UP Balancing large scale integration of fluctuating wind and solar power is likely to be a major challenge in Europe Further development of flexible hydropower could be a part of the solution To succeed, public acceptance in Norway and development of business models are crucial....and sufficient development of interconnections must be facilitated Page 15 THIS IS A DUMMY TITLE

16 Our internet site: Pump storage plant video: Page 16 THIS IS A DUMMY TITLE