Smart energy systems and the role of Power-to-Gas

Transcription

1 ENERGY Smart energy systems and the role of Power-to-Gas European Power-To-Gas Platform, second meeting 2016 Rob van Gerwen 1 SAFER, SMARTER, GREENER

2 Role of Power-to-Gas Smart Energy Systems and the Energy Transition Concluding remarks Flexibility Requirements in the Electricity Market The Energy Trilemma Relevant Actors 2

3 Smart Energy Systems and the Energy Transition 3

4 Energy transition: shift to sustainable economies by means of renewable energy, energy efficiency and sustainable development. Sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs Fossil Fuels Emissions Generation Consumption Infrastructure Local energy Example of multiple aspects of sustainability 4

5 Focus towards larger, supra-national power systems Supra-nationalisation cross-border energy exchange interconnection capacity in Europe: industries cooperate at transnational level important driver: large-scale integration of renewable energy systems (RES) needed: large volumes of back-up generation, in order to firm up fluctuating RES during situations with low wind and solar radiation 2050 Total Transmission Requirements Assuming 80% RES & 20% DR 5

6 Focus toward decentralization in the power system Decentralisation local energy (DG) new initiatives from small companies, citizens, and municipalities innovative business models 6

7 Changes about to happen locally in the coming decades Increased effort to save energy and to use energy more efficiently Installation of smart metering, and smart appliances (e.g. remote control and price based operations) End-users will partly generate their own energy (prosumers) Local balancing of demand and supply, use of energy storage Increase of electricity demand due to electric vehicles, heat pumps, and cooling New services like and new market rules Developments are starting at individual homes, and neighbourhoods, the next step is development of Eco Cities 7 7

8 Example stretched 100% RES scenario NL (yearly balance) 8

9 Example stretched 100% RES scenario NL (max. solar production) 9

10 The Energy Trilemma: affordable, reliable & sustainable energy system The past Affordability Electricity Refo rmin g Gas The past The future Reliability Sustainability 10

11 Role of Smart Energy Systems: Smart energy is regarded as an enabler of the energy transition Fe Cu Smart Markets Smart Grids 11

12 Summary Smart Energy & Energy Transition Energy Transition Increased generation by renewables From a centralized, one-directional energy system to a partly decentralized, two-directional system Electrification of the demand Smart markets New roles (aggregator, energy service companies) Capacity becomes more important than energy Challenge to mobilize load flexibility in the market (demand response) Smart grids Two-directional flow requires other ways of grid operation Tariff systems and reliability of solutions are important aspects 12

13 Flexibility requirements in the Electricity Market 13

14 Flexibility requirements in the electricity grid The electricity grid differs fundamentally from the gas grid in intrinsic storage capacity (no line pack). The electricity grid must be balanced almost instantaneously (milliseconds). There are markets and mechanism in place that work on different time scales to assure a reliable electricity supply. milliseconds seconds minutes 15-mins days weeks months years Power Quality aspects Primary reserves, frequency containment Secondary, tertiary reserves, frequency restoration Accommodating RES (solar-pv & wind, daily to seasonal to yearly fluctuations), national capacity market 14

15 Timing of markets (Exchanges) Forwards Via Exchange or OTC Several years until several days before delivery Duration: week until year Pay-as-bid Spot (Day Ahead) Exchange per bidding zone (APX, BelPex, EEX) 12:00 day-ahead of delivery Duration: single hours or multiple hours Pay-as-cleared Intraday Exchange (APX, BelPex, Elbas) Up to 5 min ahead of start of delivery Duration: single hours or multiple hours (block bids) Pay-as-bid Imbalance Real time (actually with hindsight) Block size: 15 min Pay-as-cleared 15

16 Short term balancing requirement in the electricity grid (FCR) (afrr) (mfrrsa) (mfrrda) Primary Reserve: 100% power after 30 seconds Regulating power (afrr): reaction time 30 seconds; ramp rate 7%/min Emergency power (mfrrda): 100% delivery within min after call Reserve power (mfrrsa): same as regulating reserve however dispatched manual starting next PTU or later 16

17 Relatively new development: capacity markets A number of Member States introduce or plan to introduce a capacity market as means to ensure firm capacity to maintain system reliability in a market with a high penetration of renewables Otherwise, peak prices may need to increase to unacceptable values to allow for investments in peak capacity ( missing money problem) Capacity markets provide in general a large potential for flexibility Must-run generation 17

18 Example Germany: net installed electricity generating capacity Germany is quit firmly walking on the Energy Transition road Installed capacity in 2016: Solar: 40 GW Wind: 46 GW Biomass & Hydro: 15 GW Conventional: 93 GW Source: Fraunhofer ISE 18

19 Example Germany: electricity production in week 18, 2016 Negative prices 8 May 2016 (Sunday) Hardly any flexible gas-fired power available Besides solar-pv and wind also must-run biomass, nuclear and hydro power For now incidental peak, <100 hours/year Source: Agora Energiewende Source: Fraunhofer ISE 19

20 Need for a balanced market design? Balancing markets: flexibility to anticipate the unexpected. Energy market: most efficient generation is dispatched via market merit order. Energy Flexibility Capacity Capacity market: to ensure generation adequacy. 20

21 Relevant Actors 21

22 Roles and responsibilities in the existing market place 22

23 Services and solutions to optimise smart energy systems, i.e. market, infrastructure and end-use Electricity share of energy in Europe will grow from 20% in 2020 to 50% in Data will become main asset of DNOs/DSOs, and of other stakeholders such as aggregators. Aggregator will optimally combine commodity, capacity, and flexibility. Providing insight is one of the services to provide to all key players, including endusers. 23

24 Role of Power-To-Gas 24

25 Power-To-Gas as the connecting grid technology Electricity Hydrogen Methane Heat Cross-border ((STEG) National Power-to-Gas (HT methanation) Power-to-Gas (HT methanation) Regional/ decentral Fuel cell CHP (gas engine, gas turbine) Power-to-Heat (heat pump, electric boiler) (hybrid heat pump) Local Power-to-Heat (heat pump, electric boiler) (hybrid heat pump) 25

26 How does Power-To-Gas fit in the electricity market? Electricity grid Electrolysis (70%) Hydrogen 25% STEG Mobility, feedstock, grid Methanation (60%) (60%) Methane Mobility, feedstock, grid From electricity market perspective P2G2P can be seen as combined (heavy) consumer/producer Main advantages is capacity of long duration storage and high power conversion Main disadvantage is low round trip efficiency waste electricity In storage mode assets are used just part of the time challenging economics Competition: Short term: batteries Power-To-Heat Curtailment 26

27 Role of Power-to-Gas Roles Power-To-Gas is both producer and consumer. It will fit in these current market roles. The combination provides a role as flexibility service provider There will be competition in the flexibility market: demand response, battery storage, vehicle-to-grid, second-life batteries, curtailment, Power-To-Heat Markets Given the technical characteristics of Power-To-Gas(-To-Power), long term storage seems the unique selling point of this technology Depending on the Gas-To-Power technology it can provide services on all markets discussed before: FCR, balancing markets (FRF), capacity etc. The Power-To-Gas technology can provide services on most markets also, however, depends on characteristics of electrolysis, methanation and storage capacity. It provides ramp-down capacity but there is competition Especially in scenarios with high a renewable share and a further electrification of (heat)demand or scenarios with severe capacity constraints in the grid due to RES, accommodating high-res peaks, bridging low-res production gaps and bridging the winter peak will be a unique use of Power-To-Gas. 27

28 Concluding Remarks 28

29 Concluding remarks (1) 1. Reconsidering the roles and responsibilities of network operators in relation to hybrid energy infrastructure concepts. The current regulatory framework limits network operators and potential operators of hybrid concepts to actively pursue opportunities towards implementing concepts of infrastructural system integration. 2. Development of alternative tariff structures for hybrid energy infrastructure concepts Concepts like power-to-heat and power-to-gas require (large) capacity connections to the electricity grid. A mismatch between the tariff set-up and new system roles can a significant risk in the business of these concepts, preventing stakeholders and investors taking initiative. 3. Explore the value of feedstock infrastructures in providing flexibility to the electricity grid. Flexibility captured within (industrial) feedstock networks could be germinated and offered to the electricity infrastructure. For instance, the hydrogen network present in the Botlek area offers great energy capacity, both in terms of supply to as demand from the network. 29

30 Concluding remarks (2) 4. Impact assessment of the differences in regulatory set-ups of heat networks and other networks, regarding the impact on hybrid energy infrastructures. Providing flexibility using hybrid energy infrastructures requires the involvement of three actors: the operator of the electricity network, the operator of the energy conversion concept at the connection point between networks and the operator of the network of the other energy carrier (gas, heat, cold). Currently the regulator arrangements in these networks are different. 5. Risk assessment of electricity system stability in relation to the current trend of electrification of heat demand in extreme meteorological scenarios and assessment of the role of Power-To-Gas in this system. The current trend of electrification of the heat demand is driven by cost, efficiency and emission considerations. This trend will only be proven to be successful whenever the robustness of a full-electric heat demand sector is similar or better than the current levels of security of supply (currently delivered by the gas infrastructure and heat infrastructures). A multi commodity optimization is advisable. 30

31 Thank you for your attention Rob van Gerwen SAFER, SMARTER, GREENER 31