Flexibility for Variable Renewable Energy Integration in the Nordic Energy System Danish & Nordic perspectives Klaus Skytte Head of Energy Economics and Regulation DTU Management Engineering Systems Analysis Division Klsk@dtu.dk FLEX e workshop 22 September 2015 Majvik Kirkkonummi
Agenda Motivation Nordic perspectives System integration Denmark as case - Energy Concept 2030 From technical to realisable flexibility potentials Challenges 2
Motivation Wind production share in DK-West The new electricity systems: From centralised and fossil-intensive systems to sustainable and integrated Increasing shares of variable renewable energies (VRE) Total support and integration costs expected to increase Trend to more market integration and need of more flexibility Technological and smart technologies exist. Need for REthinking the framework conditions to support these + bussines cases Market integration with electrification of gas, heat and transport sectors Wind power provided a world record Research 41.2% is needed of Danish for analysing electricity the effects of different regulatory framework conditions, both qualitatively and quantitatively consumption for first 6 months of 2014 Identify and assess regulatory and technical pathways The night of Friday, July 10 2015 wind towards coherent Nordic energy systems in 2050 based on produced strong interaction 140 per between cent of Denmark's different energy markets that electricity ensure resilience, consumption sustainability and efficiency. 3
Global vs Nordic energy-related CO 2 emissions IEA NETP senarios Carbon-neutral scenario (CNS): 85% reduction of (energy- and process related) CO 2 emissions by 2050 relative to 1990
Nordic electricity system 30 years ahead in terms of CO 2 intensity Nordic CO 2 emissions from electricity and heat generation
Nordic electricity generation in the Carbon- Neutral Scenario 63% RES-E 83% CO 2 free 72% RES-E 97% CO 2 free 78% RES-E 98% CO 2 free
6 GW Nordic wind capacity in 2010 40GW of Nordic wind capacity in 2050. Requiring 10 000 new onshore turbines, and 3 000 new offshore turbines We need to install 1GW a year to 2020 (2011 and 2012 were on track), and 1.4GW a year after that.
Key challenges Electricity system integration Infrastructure Biomass Supply Energy Efficiency CCS
System integration
Hypotheses - System integration There is a comparative advantage of combining different energy markets, both with respect to flexibility, but also with respect to synergy and economics. The Nordic power market is well functioning despite a few technical challenges. With the right coupling to the underlying national and local energy markets for heat, gas, and transport fuels, enough flexibility can be generated in a cost efficient way and so embrace a larger amount of VRE. Need for a holistic system approach to the Nordic Energy system with flexibility obtained across energy markets with respect to flexibility at the power markets. 10
Energy concept 2030 DK - Scenarios for system development towards a RE-based energy system DTU Management Engineering, Technical University Energy of Concept Denmark 2030 DK - towards a RE-based energy system
Denmark situated in a windpower area Electricity transmission Gas transmission
Energy strategy in Denmark Political targets: 2020: 50% of traditional electricity consumption covered by windpower (decision supported by 95% of parliament) 2035: All electricity and heat based on renewable energy (Obs. the previous governmental position) 2050: The total* energy supply based on renewable energy *Total energy system incl. transport, industry etc. Wind power provided a world record 41.2% of Danish electricity consumption for first 6 months of 2014 The night of Friday, July 10 2015 wind produced 140% of Denmark's electricity consumption
Energy concept 2030 Towards a competitive energy system based on renewables Energy ressources Energy system Energy services Today 2050 Today Wind Bio Bio+ H2 Fossil Bio Wind PV Fossil Power Fuel Gas Heat Heating Proces heat Electrical services (Light, cooling, it, proces etc.) Transport System development towards a fossil free system is analysed In wind scenario a sustainable amount of biomass is estimated as the national bio- and waste ressources Energy Concept 2030 DK - towards a RE-based energy system
RE-electricity ressources DK (potential and socio-economic cost of energy 2030 excl. integration)
A scenario example towards RE-based energy supply P2G HP HP Industry- HP EV/PHEV
Ressources and cost for fuels (2030 if all biomass is allocated to fuels) Today primary used for heat and CHP Fuels demand today would require more than 30 GW extra windpower if power-to-gas should deliver REgas prce (DKK/GJ) excl. cleaning and upgrade 200 180 160 140 120 100 80 60 40 20 0 Straw Waste mun. Marg. bio etc. Slurry etc. Energycrops Wood Electrolysis (power 2 gas) 2050 2035 0 50 100 150 200 250 300 350 400 450 500 Fuel production (PJ) Consumption of fuels (gas+liquids) 2013 Gasoil + CO2 (2035) Natural gas + CO2 (2035) A significant demand for fuels biomass is essential for producing high amount of fuels Energy Concept 2030 DK - towards a RE-based energy system
Danish case (Energy Concept 2030) - Summing up The vision is to make the total energy system independent of fossil fuels, and to make it competitive with a fossil reference A high degree of electrification and much more wind- and solar will be essential. A high integration with heat- and gas-system is mandatory to get flexibility and energy efficiency. Biomass to be used for CHP and boiler is the short term solution. The long term solution is to use biomass for fuel production (thermal gasification, anearob gasification) The integration of residues (fertilizer, char etc.) from RE-fuel production is a key activity in a sustainable use of biomass Energy Concept 2030 DK - towards a RE-based energy system
Why increase transmission grid capacity? Motivation for closer grid integration Potential for green generation surplus in the Nordics Nordic hydro power can act as a very efficient battery Geographic smoothing effects for variable generation Resource sharing across regions for back-up and ancillary services
Flexibility in transmission Example: Economic and climate effects of increased integration of the Nordic and German electricity systems Hourly modelling: Ex. Germany
Regulatory framework challenges Market integration and flexibility From passive to active dynamic generation / market actors Act to negative prices at the spot market (day-ahead) Case: Change in market design from 2009: negative prices at NordPool Close down of wind turbines in hours with neg prices = saved costs Active at the balancing markets Close down of wind = down regulation Case Denmark: New wind turbines gets a Feed In Premium in certain full load hours (depending on size). When down-regulation, the not "used" full load hour with support can be used later. Case Denmark: Some existing off-shore tenders have no incitements for WTs to be active in down-regulation. One (Anholt) doesn't receive FIT when negative prices. 21
Managing Negative Spot Prices Case: Sund & Bælt wind farm 16. March 2014 22
Managing Negative balancing Prices Case: Down ward regulation 9 August 2014 23
Last year with active participation of wind turbines in ancillary service Activations where negative regulating prices are below - 50 DKK/MWh. 25 times 51 hours 24
From technical to realisable potentials 16 14 Barriers 12 10 8 6 4 Transport Gas Heat Electricity 2 0 Technical potentials Available potentials 25
Flexibility potentials /MW incl. present barriers / regulatory setup 1 Remove barriers without barriers 2 add incentives MW with additional incentives 26
Future Challenges The primary challenge Identify and assess regulatory and technical pathways towards coherent Nordic energy systems in 2050 based on strong interaction between different energy markets that ensure resilience, sustainability and efficiency. The secondary challenges are to: a) Estimate the potentials and costs of flexibility in the Nordic power market created by the coupling of and increased interaction between different energy markets (electricity, heat, gas and transportation). Estimate the need for flexibility in the future Nordic power market. b) Identify and eliminate regulatory and technological barriers to intensified market interaction. Level playing fields for all flexibility options c) Develop coherent regulatory frameworks and market designs that facilitate energy market couplings that are optimal for the Nordic conditions in an EU context. Regulatory REthinking. Make RE market ready & Make markets RE ready Future market designs and business cases d) Adapt a high-resolution Nordic energy market model covering heat, power and transport for quantification of the impacts of different market couplings, regulatory frameworks and market designs. Estimate the cost and benefits of a coherent energy system framework. 27
Flex4RES Flexibility for Variable Renewable Energy Integration in the Nordic Energy System Nordic Energy Research Flagship project September 2015 - March 2019
Thank you for your interest Klaus Skytte Head of Energy Economics and Regulation System Analysis Division DTU Management Engineering Technical University of Denmark klsk@dtu.dk, http://www.sys.man.dtu.dk/
Last year with active participation of wind turbines in Day Ahead market. Hour s 30 Protection against negative spot prices 17. august 2014. Day Ahead trading resulted in negative spot prices Wind production was expected at high level Wind production considerable lower than expected Wind turbines were used actively and did not stop at all.