CEER workshop on Wind integration Marcel Cailliau Chairman of TF Integration of RES EURELECTRIC Brussels, 11 February 2010
RES & Market: 1 world or 2 different worlds? CEER (p.31): It is no longer practical to consider renewables and electricity markets as 2 separate topics: it is essential to consider their interaction and to promote the integration of renewable in the wholesale market EURELECTRIC would like to complete this statement: integration of RES in the wholesale market can only be successful if the wholesale market is integrated: we should hurry up with implementation of the EU target models, especially Day-Ahead, Intraday and Balancing
Prices: up or down? Market price Demand curve Market price Bidding prices Demand curve Bidding prices Baseload Medium load Peak Renewable If peak plant only runs a couple of hours, instead of 8 hours, its marginal cost will be higher (start up costs)
Oversupply leading to very low prices Low Demand curve Low Demand curve Bidding prices Bidding prices High RES with guaranteed dispatch (price = - ) (depending on the subsidy scheme) Not technically feasible (Pmin) : medium generator will dump energy at negative price if this is cheaper than stop and start again! High RES with guaranteed dispatch (price = - ) (depending on the subsidy scheme Baseload Medium load Peak Renewable
Must run peak plant for ancillary services (price = - ) Additional oversupply due to need for flexibility (ancillaries = must run) Low Demand curve Low Demand curve Bidding price Bidding price High RES with guaranteed dispatch (price = -, depending on the subsidy scheme) Lack of flex plants requires peak plants as must run, and even further dump of energy from baseload plant once its Pmin is reached (if cheaper than stop and start again)! High RES with guaranteed dispatch (price = -,(depending on the subsidy scheme)
Back-up capacity needs LOAD FACTOR DURATION CURVE OF WIND GENERATION - 2008 (Germany and Spain) 0,9 0,8 Germany Spain 0,7 0,6 55,2% Load factor 0,5 0,4 0,3 0,2 Average 21,74% 0,1 3,9% 0 1 331 661 991 1321 1651 1981 2311 2641 2971 3301 3631 3961 4291 4621 4951 5281 5611 5941 6271 6601 6931 7261 7591 7921 8251 8581 5% of time (438 hours) Only 3.9% installed wind capacity has same (95%) firmness/availability as conventional plants Close to 45% of installed wind capacity has a level of firmness lesser than 5% and need permanent backup Between 3.9% and 55.2% of installed wind capacity needs backup on intermittent basis it will be necessary to invest in backup capacity hours 95% of time (8.345 hours)
Flexibility needs Wind generation Germany (QH basis): Day Ahead forecast, real time, forecast error 25.000,0 20.000,0 15.000,0 W10.000,0 M 5.000,0 0,0 21.11.2009, 00:00-5.000,0 21.11.2009, 12:00 22.11.2009, 00:00 22.11.2009, 12:00 23.11.2009, 00:00 23.11.2009, 12:00 24.11.2009, 00:00 24.11.2009, 12:00 Between day ahead and real time, there are still huge differences, that only can be solved via more availability of flexible plants Day Ahead Forecast, EEX data (MW) Real time wind (BDEW data) (MW) DA forecast error (MW) ButMORE Flexibilitywill have to be provided amongst other by: -Gasprocurement, gas storage as well as grid access -Electricitystorage solutions -Demandside management
Generation investments Backup and flexibility needs will require conventional generation investments (peak plants, hydro, storage) However, RES plants will push out conventional plants of the merit order, important load duration reductions already experienced, putting investments at higher risk. Generators will invest when market prices give the right ROI : EURELECTRIC believes the market will perform adequately subject the right regulatory framework is in place. Therefore: Energy only market design: Caps and Floors to be avoided as they distort the incentives for investment in peak plants and storage facilities Evaluation if, how, and on what regional scale capacity investment incentives might be implemented
Market integration: the software solution Bringing flexibility together through Europe requires the appropriate market design PCG target models are in our view the right way forward: now progress on the roadmaps needed Speeding up the implementation of the target model, in particular Day-Ahead, Intraday and Balancing is paramount for the integration of the market and for the integration of RES which will require much more flexibility throughout Europe
Grid investments: the hardware solution Wind plants connected in the middle of the sea to several markets create an additional dimension to the regulatory overview that was not foreseen in the 3 rd package published in the same year as the RES directive! Regulatory models and incentives whereby one TSO invests and other TSOs (benefiting market) contribute have to be introduced A North Sea grid is not enough, also a massive Continental expansion and reinforcement has to be planned high expectations on the ENTSO- E TYNDP
EURELECTRIC Conference Building a Secure & Sustainable Electricity Future: How Can Market Integration Contribute? 17 March 2010 Hôtel Renaissance, Brussels Speakers from: DG TREN, ERGEG, ENTSO-E, EuroPEX, EFET, IFIEC, EWEA, Poyry Consulting, IESE, etc. Key Topics: Integration of Renewables: how to cope with wind intermittency? Grid Investments: what role for the 10Year Network Development Plan? Regional Markets: how to balance top-down and bottom-up integration? 11