Ancillary Services Market Organization in Germany

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1 Page 1 Ancillary Services Market Organization in Germany Dr. Bernhard Ernst bernhard.ernst@iwes.fraunhofer.de

2 Page 2 Ancillary Services Market Organization in Germany German Power System Ancillary Services Frequency Control in Germany / Grid Region Continental Europe Voltage Control Outlook: Capabilities of Renewables to Provide Ancillary Services

3 Page 3 Power System in Germany Facts & Figures 1/4 Area: 357,340 km² Population: 81 Mio. Gross electricity generation 2014: 614 TWh Share of Renewables 2016: > 33 % of demand Capacity Conventional Generation 2013: 91 GW Coal 29 GW, Lignite 23 GW, Nuclear 12 GW, Gas 27 GW Transmission Grid: 35,000 km (380 / 220 kv)

Source: BMWi, http://www.erneuerbare-energien.

4 Source: BMWi, Page 4 Power System in Germany Facts & Figures 2/4 Development of renewables in Germany Installed capacity [GW] Total 2016: GW Wind: 49.5 GW PV: 41.3 GW Biomass: 7.6 GW Hydro Wind offshore Wind onshore Biomass PV

Source: Bundesnetzagentur für Elektrizität, Gas, Telekommunikation, Post und Eisenbahnen, www.smard.

5 Source: Bundesnetzagentur für Elektrizität, Gas, Telekommunikation, Post und Eisenbahnen, Page 5 Power System in Germany Facts & Figures 3/4 German Power Generation, July 29-31, 2017 GW Time Biomass Hydro Wind offshore Wind onshore Solar PV Load

6 Page 6 Ancillary Services Market Organization in Germany German Power System Ancillary Services Frequency Control in Germany / Grid Region Continental Europe Voltage Control Outlook: Capabilities of Renewables to Provide Ancillary Services

7 Page 7 System Operation Characteristics and Services System Operation System Characteristics Ancillary Services Operational Services Inertia Frequency Control Voltage Control System Restoration System Coordination/ Dispatch Self-regulation Effects Frequency Containment Dynamic (Faultride-trough) Black Start Capability System Control Short Circuit Capacity Frequency Restoration Steady-state House Load Operation Data Acquisition Source: Fraunhofer IWES Reserve Replacement Grid Energizing Capability Compensation of Grid Losses

8 Ancillary Services Bilateral or Market Based Ancillary Services Frequency control Global service Frequency Control Frequency Containment Frequency Restoration Reserve Replacement Source: Fraunhofer IWES Voltage Control Dynamic (Fault-ridetrough) Steady-state System Restoration Black Start Capability House Load Operation Grid Energizing Capability Market can be created Voltage control Local service Bilateral agreements or grid code requirements Regulator approved prices Page 8

9 Page 9 Ancillary Services Market Organization in Germany German Power System Ancillary Services Frequency Control in Germany / Grid Region Continental Europe Voltage Control Outlook: Capabilities of Renewables to Provide Ancillary Services

10 Page 10 Dispatch of control reserve for real-time balancing Reserve power Frequency Inertia 5s 30s 5 min 15 min 1 hour FCR afrr mfrr BRP

11 Page 11 Reserve dimensioning Primary reserve (N-1 and N-2) The basic dimensioning criterion is the maximum expected instantaneous active power deviation (N-1): loss of the largest power plant; loss of a line section; loss of a bus bar; loss of the largest load at one connection point; loss of a HVDC interconnector. In larger systems like continental Europe (or all-india) with many units there is a larger probability of an additional loss before the system has recovered. Subsequent failures have to be considered (N-2). Probabilistic investigations resulted in a primary reserve of 2910 MW for continental Europe. Commonly known as sum of the two largest units, N-2 criterion, or 3 GW.

12 Reserve dimensioning Secondary and total reserve Error type Determination Secondary reserve Load noise Empirically determined distribution based on time series of vertical net load X X Total reserve Forecast errors Empirically determined distribution based on actual reserve activations corrected for power plant outages X Schedule steps Stochastic ramping model for the sum of schedule steps with foreign TSOs X X Power plant outages Stochastic distribution based on convolution of historic outages of all power plants > 100 MW X X Hour steps Empirically determined distribution of the difference between 15-min. and 1-h mean value of the forecast error X Source: Consentec Page 12

13 Reserve dimensioning Secondary and total reserve Frequency distribution of load forecast error 5,0% Frequency 4,0% 3,0% 2,0% 1,0% 0,0% Power [MW] 5,0% Frequency Convolution Frequency distribution of power plant outages 100,0% 80,0% 60,0% 40,0% 20,0% 0,0% Power [MW] ,0% Frequency 3,0% 2,0% 1,0% 0,0% Power [MW] Frequency distribution of total demand of reserve Page 13

14 Total Reserve Capacity Page 14 Reserve dimensioning Secondary and total reserve 5,0% 4,0% Reserve Capacity is not sufficient for 0.1% of the times (app. 9 hours a year) Frequency 3,0% 2,0% 1,0% 0,0% Power [MW]

15 Source: BMWi, Page 15 Reserve dimensioning Actual values in Germany afrr positive affr negative mfrr pos. mfrr neg.

16 Page 16 Reserve product specification Primary control reserve (FCR) Secondary control reserve (afrr) Tertiary control reserve (mfrr) Auction time Weekly (on Tuesdays for the next week) Weekly (On Wednesdays for the next week) Daily (10:00 for next day and following weekend or holidays) Product time period One calendar week Peak (Monday to Friday from 8:00 till 20:00) or off-peak(monday to Friday from 0:00 till 8:00 and 20:00 till 24:00 as well as weekends and national holidays from 0:00 till 24:00) of one calendar week 4 h (6 time slices per day) Product type Positive and negative reserve in one product Positive and negative reserve separated Positive and negative reserve separated Product size 1 MW symmetrical positive and negative reserve 5 MW 5 MW Product increment 1 MW 1 MW 1 MW Compensation Capacity price Capacity and energy price Capacity and energy price

17 Market design - Influencing factors on market liquidity Influence on demand Tendency Influence on supply Tendency Extension of control zones reducing Reducing duration for offered services, allowing pooling of units, reducing minimal offered power increasing Increased balancing activities using intra-day markets reducing Allowing for new providers, e.g. decentralized generators (including power-to-heat or backup generators) increasing Growing installed capacity of renewables, absolute effect of forecast failure rises increasing More power plants operating in partial load, reducing minimal load of power plants increasing Optimizing of feed-in forecast of renewables reducing Increased grid/ line contingencies and lagged grid extension on transmission level reducing Source: Consentec Page 17

18 Page 18 Ancillary Services Market Organization in Germany German Power System Ancillary Services Frequency Control in Germany / Grid Region Continental Europe Voltage Control Outlook: Capabilities of Renewables to Provide Ancillary Services

19 Page 19 Voltage Control - Objectives Voltage profile management and reactive power dispatch (steady state): The aim is to keep the voltage profile close to the desired profile and within the tolerance band margins with time frame of minutes to hours. Maintaining voltage stability (dynamic): The aim is to prevent a voltage collapse event or limit its depth and extension in case of an incident (line fault, loss of generation unit).

20 Voltage Control Market requirements Reactive power should be supplied close to the point of demand. The demand for reactive power is relatively low compared to the demand for active power. Possible market size is limited. The need for reactive power and the need to diversify reactive power sources grows with the increased penetration of renewables. Voltage support induces costs for generators but can help system operators to manage their network in the most efficient way. If the number of service providers is large enough, voltage support could be tendered. Page 20

21 Page 21 Ancillary Services Market Organization in Germany German Power System Ancillary Services Frequency Control in Germany / Grid Region Continental Europe Voltage Control Outlook: Capabilities of Renewables to Provide Ancillary Services

Capabilities of Renewables Legend FCR: frequency containment reserve FRR: frequency restoration reserve RR: replacement reserve FFR: fast frequency

22 Capabilities of Renewables Legend FCR: frequency containment reserve FRR: frequency restoration reserve RR: replacement reserve FFR: fast frequency response RM: ramping margin SSVC: steady state voltage control FRCI: fast reactive current injection Source: REserviceS project GSS: grid support services Page 22

23 Page 23 Conclusions Ancillary Services are market based where possible Some services are regulated (e.g. voltage control) Growth of variable generation influence amount and specifications of services Variable generation can provide ancillary services (and need to)

24 Page 24 Questions? Dr. Bernhard Ernst

Description of load-frequency control concept and market for control reserves

Description of load-frequency control concept and market for control reserves Study commissioned by the German TSOs (ordered by 50Hertz Transmission GmbH) 27 February 2014 Consentec GmbH Grüner Weg 1 52070