Regional integration of power markets A priority for evolving power systems - experiences from Northern Europe OLADE Summit, 6-7 December in Buenos Aires, Argentina Christian Zinglersen, Head of the Clean Energy Ministerial Secretariat 1
Example of an Energy Trilemma delivered 2
A UNIQUE RENEWABLES STORY VRE share in annual electricity generation 2016-22 Denmark Ireland Spain Germany United Kingdom Italy Australia United States China India Brazil Japan PV share in 2016 Wind share in 2016 Additional PV share in 2022 Additional wind share in 2022 0% 10% 20% 30% 40% 50% 60% 70% 80% % of total generation 3 Source: IEA RE Market Report 2017
WITH LEVELS OF CURTAILMENT AN ISSUE FOR SOME BUT NOT ALL Wind penetration and curtailment in selected countries, 2012-2015 Wind penetration level in the energy mix (left axis) Curtailment rate (right axis) Key point: Curtailment levels are a good indicator for successful VRE integration growing curtailment signals shortfalls in power system flexibility 4 Source: IEA Renewables 2017
HOW ABOUT SECURITY OF SUPPLY THEN Outage minutes in Europe - very high security of supply in Denmark in period with increasing share of renewables Danish experiences on integration of large shares of wind power 5 Source: Energinet.dk October 20175
Sverige Norge Danmark u. PSO Finland Luxembourg Bulgarien Kroatien Romænien Slovenien Holland Polen Grækenland Estland Tjekkiet Frankrig Danmark Belgien Østrig Spanien Lithauen Ungarn Portugal EU28 Slovakiet Irland Letland Tyskland Malta Cypern Italien Storbritannien HOW ABOUT ELECTRICITY PRICES THEN 100 øre/kwh 80 60 40 20 0 Anm.: Den danske elpris uden PSO er beregnet ved at fratrække PSO-satsen for 2015 fra den danske elpris inkl. PSO og afgifter. For EU28 og Grækenland er priserne kun for første halvår 2015. Kilde: Eurostat. 6 Source: Energinet.dk
Those Danes must be really smart Or what? 7
THE ROLE OF REGIONAL INTEGRATION IS KEY 8 Source: Energinet.dk
MW REGIONAL INTEGRATION TAKES ADVANTAGE OF RESOURCE DIVERSITY Supply mix among the Nordic countries 40 000 35 000 30 000 25 000 20 000 15 000 10 000 5 000 Sun Wind Hydro Other thermal power Nuclear 0 Denmark Finland Norway Sweden The Nordics have a mix of conventional (coal, gas, nuclear) and weather dependent generation (hydro, wind). Integration gives access to a larger market and improves diversity of supply. 9
RESOURCE DIVERSITY BRINGING MORE OPTIONS OVER THE NEXT DECADE Even though some of the Nordic countries are dependent on imports, the overall picture is that interconnections are sufficient to address the import needs, and seen as a whole the total remaining capacity is also sufficient to cover peak demand. Source: Challenges and Opportunities for the Nordic Power System, the four Nordic TSO s, August 2016 10
THE DREAM MIX: HYDRO WITH RESERVOIR AND WIND POWER Wind power with 30% utilization 600 MW 1.6 GWh Hydro power and wind power together 1.800 MW Hydro power with 50% utilization 1.180 MW 9.5 GWh 900 MW 7.9 GWh Time Increase inflow with WIND - balance output with HYDRO 11 Source: Energinet.dk
So how does that look in practice 12
FLEXIBILITY IN THE ELECTRICITY SYSTEM - HOURLY DISPATCH ONE WEEK IN SEPTEMBER 2015 13 Source: Energinet.dk
EXAMPLE 1: 14
EXAMPLE 2: 15
EXAMPLE 3: 16
The bigger picture: Flexibility of the power system on the rise 17
TWh WE ARE BEING ELECTRIFIED (WELL, SORT OF) 40 000 30 000 20 000 Evolution of electricity demand in the three WEO scenarios Current Policies New Policies Sustainable Development 10 000 2000 2008 2016 2024 2032 2040 18 Source: IEA, World Energy Outlook 2017
THE CHALLENGE IS INCREASING: GLOBAL ELECTRICITY MIX CHANGES IN THE 2DS A shift reversal is needed with renewables providing over 60% of global electricity by 2050 or before 19
Level of VRE penetration THIS IMPACTS THE ENTIRE SYSTEM: ALL (COST EFFICIENT) FLEXIBILITY HANDS ON DECK Policy and market framework System-friendly VRE deployment Distributed resources integration Flexible resources planning & investments 24 /7 System services Generation time profile Grids Generation Storage Demand shaping Technology mix Location Integrated planning Actions targeting VRE System and market operation Actions targeting overall system Source: IEA (2016) Next generation Wind and Solar Power. From Cost to Value 20
AN EXAMPLE OF THIS APPLIED IN THE CASE OF A CEM CAMPAIGN Flexibility as an attractive attribute of future energy systems Power assets providing flexibility should be remunerated The role of market design becomes key. 21
SAME APPLIES FOR REGIONAL POWER INTEGRATION: POLICY AND REGULATION & COUNTRY-SPECIFIC PERSPECTIVES ARE KEY Effective regional integration requires political commitment, credible rules, coordination supported by: Enabling policies and regulations; Regional power system assessments; Regional roadmaps to guide investments in supply, grid, storage 22
REGIONAL INTEGRATION: A MATTER OF DEGREE If you want to go fast, go alone; if you want to go far, go together. Power system Power system Power system Power system Power system Unified power system Independent systems Coordinated systems Consolidated system Consolidated systems are best able to meet the technical requirements of decarbonisation, but require strong jurisdictional alignment. Coordinated systems require significant harmonisation, ideally supported by regional institutions. IEA (2017), Presentation at HAPUA-UNESCAP Workshop on 17-19 April 2017, Jakarta 23
All in all, a relevant theme for CEM9 in May! CEM9/MI-3 Energy Integration and Transition Copenhagen/Malmö the Öresund Region 23-24 May 2018 24
Thank you. For more information, please visit www.cleanenergyministerial.org 25