Market models for storages in renewable energy networks

Transcription

1 Market models for storages in renewable energy networks Energy Storage 13th/14th March 2012, Düsseldorf Dipl.-Ing. Patrick Hochloff, Dr. Ing. Kurt Rohrig

2 Market models for storages in renewable energy networks Introduction Residential storages Distribution system storages Central storage plants Conclusion

3 Market models for storages in renewable energy networks Introduction Residential storages Distribution system storages Central storage plants Conclusion

4 Introduction Today s business concepts of energy storages (examples in Germany): Technology Integrated in Use Support Thermal storages Thermal storages Residential solar heat generation Decentral CHP (fossil and renewable fuels) Operating time extension Electricity market, operating time extension KfW-credits, investment grants KfW-credits, feedin tariff Small scale gas storages Small and large scale gas storages Pumped hydro storage Biogas power plants Electricity market KfW-credits, Feedin tariff Natural gas distribution system Natural gas market, strategic reserve Electric grid Electricity market Abatement of electric grid fees

5 Introduction Increasing need of flexible plants in combination with volatile RES power. Storages are flexible generators and can buffer surplus RES power. Today, stationary electrochemical and chemical storages are not profitable. Which different uses of storages can be provided with the same asset? Profitable business concepts in the near and mediumterm future? Requirements of the market model for future business concepts?

6 System voltage level Introduction Analysis for different storage dimensions and system levels Residential storages (electrochemical) Distribution system storages (electrochemical) Central storage plants (chemical) kw 6 12 hours 100 kw 100 MW 10 hours 3 days 100 MW 1 GW days weeks/months Capacity

7 Market models for storages in renewable energy networks Introduction Residential storages Distribution system storages Central storage plants Conclusion

8 Residential storages Which use cases could generate profits? Use case Stakeholder Motivation A) Self consumption of residential solar power generation Owner of residential solar plant Solar power is cheaper than retail power Payment of self consumed solar power B) Solar feed-in peak-shaving Owner of solar plant; Distribution system operator (DSO) (local utility) Overall peak-shaving or down regulation by DSO obligatory; Voltage increase during solar peaks in low-voltage grids C) Procurement costs peakshaving Utility (supply of end consumers) High peak prices espescially during high load and low RES power generation

9 Residential storages Multiple use possible? Use case A) Self consumption of residential solar power generation Time frame Charging Sunny day: any time during the day when generation exceeds the consumption B) Solar feed-in peak shaving Sunny day: midday When generation exceeds a defined level C) Procurement costs peakshaving Every day: night Sunny day: afternoon or any time with the lowest spot prices Time frame Discharging Sunny day: evening or any time when consumption exceeds generation any time Cloudy day: day Sunny day: evening or any time with the highest spot prices A and B-cycles synchronous. C-cycles added to or expand A and B-cycles. Who is investor and operator? Design of services offered to other parties?

10 Residential storages Market model attributes to support residential storages Use case Attribute Status (Germany) A) Self consumption B) Solar feed-in peak-shaving C) Procurement costs peakshaving Payments for self consumed solar power Solar power generating costs much below retail power prices Claim on feed-in tariffs or payments from DSO for stored energy in order to stabilize voltage Utility as primary or secondary user of residential storages (virtual power plant) + Implemented in German RES act + From 2012 with further feed-in tariff reductions + General claim on feed-in tariffs for stored energy + Financial compensation for down regulated energy (bottlenecks) - No compensation for overall power reduction on 70% unclear if storages allowed + Similar business concepts exist: i.e. residential heat pumps and micro CHP with heat storages, DSM

11 Market models for storages in renewable energy networks Introduction Residential storages Distribution system storages Central storage plants Conclusion

12 Distribution system storages Which use cases could generate profits? Use case Stakeholder Motivation C) Procurement peak shaving Utility High peak prices especially during high load and low RES generation D) Electricity market: spot market arbitrage, derivatives, system balance reserve E) Limiting wind and solar power feed-in RES plant operator or any electricity producer/trader Distribution system operator (DSO) Volatile RES power generation and steep gradients can cause high price differences Grid bottlenecks: Reduce or postpone net capacity expansion Increase utilization of grid capacity

13 Distribution system storages Example for limiting wind power feed-in.

14 Distribution system storages Multiple use possible? Use case C) Procurement peak shaving D) Electricity market Time frame Charging Hours and days during low prices Time frame Discharging Hours and days during high prices E) Limiting wind and solar power feed-in Windy and sunny days: hours and days during high level generation (not only peaks; peaks can be curtailed) Hours and days during low level generation Days with much volatile RES: E and C/D cycles are or can be synchronized Days with low volatile RES power generation: C/D cycles are additional Who is investor and operator? Design of offered services for other parties?

15 Distribution system storages Market model attributes to support storages in distribution grids Use case Attribute Status (Germany) C) Procurement peak shaving D) Electricity market E) Limiting wind and solar power feed-in Electricity market with regular and sufficiently high price spreads. Payments from DSO for charging storages during high RES power generation in order to avoid or reduce bottlenecks. - Current price differences are too small, also caused by solar power. - Extreme negative prices are avoided by enabling TSO to reduce market bid. + Higher shares of RES in the future can lead regularly to sufficient low market prices. + Business concept could be developed together with DSO. - Dependent on DSO: Market or regulated payments do not exist. - Alternative for obligatory grid expansion?

16 Market models for storages in renewable energy networks Introduction Residential storages Distribution system storages Central storage plants Conclusion

17 Central storage plants Which use cases could generate profits? Use case Stakeholder Motivation F) Electricity market: spot market arbitrage, derivatives, system balance reserve Power supply industry System back-up and replacement of thermal power plants shut down G) Voltage stabilization and other grid services H) Chemical energy carrier production Transmission system operator (TSO) Energy industry and depending industry (i.e.: power supply, chemicals, automotive, aviation, ) Replacement of thermal power plants shut down Increasing costs of energy resources, decreasing power generation costs of RES and decreasing conversion technology costs

18 Central storage plants Multiple use possible? Use case Time frame Charging/Discharging F) Electricity market Power generation: depending on prices /RES power supply G) Grid services Power generation: depending on grid status H) Chemical energy carrier production High utilization of assets continuous operation Interruptible power contracts or procurement costs peak-shaving are optional Uncoupling of charging and discharging (stakeholder asset operating time) Existing and new power plants and storage capacities with same fuel (i.e. heating oil, natural gas) either from fossil or renewable origin

19 Market models for storages in renewable energy networks Introduction Residential storages Distribution system storages Central storage plants Conclusion

20 Conclusion Residential storages can be profitable soon as solar feed-in tariffs will be reduced in rapid succession. The additional use in virtual power plants can raise the yearly utilization and incomes. Distribution system storages can only operate in electricity markets now. The current market prices do not suffice to finance innovative storage technologies. With payments from DSO/TSO for grid services storages could be profitable earlier. Payments on grid services are justified if investments for grid expansion can be reduced. A market or regulated payments do not exist. Central storage plants are separated assets with different stakeholders. The conversion of electric power to fuel will become profitable if fuel prices are most of the time sufficiently higher than power prices. Storage operators should be able to exploit as many as possible financial sources by offering services before a financial aid will be introduced.

21 Thank you for your attention. Contact: Fraunhofer-Institute for Wind Energy and Energy System Technology (IWES) Patrick Hochloff Königstor 59, Kassel, Germany Tel. +49 (0)