Lessons learnt from deregulation in Western Europe on the example of energy storage

Transcription

1 The Future Role of Energy Storage in South Eastern Europe Lessons learnt from deregulation in Western Europe on the example of energy storage Christian Egenhofer Associate Senior Research Fellow, Centre for European Policy Studies (CEPS) Visiting Professor, SciencesPo (Paris), College of Europe (Bruges & Natolin), Guido Carli University LUISS (Rome) Tirana International Hotel, Tirana, 21st and 22nd October 2014 Thinking ahead for Europe Centre for European Policy Studies (CEPS)

2 About CEPS 10/28/2014 2

3 Storage in Regulated markets (up to 1990) After liberalisation (1990 to 2009) After Renewable Energy boom (post 2009) More EU lessons EU agenda 10/28/2014 3

4 Storage in regulated market 10/28/

5 Storage is function of generation system e.g. Nuclear countries: to optimise nuclear power generation Options Storage: -Pumped storage (flexibility) Load shifting: -Special night tariffs (load shifting) -Night-storage heater -Night water heating - 28/10/2014 5

6 Other: -Lighting of motorways (Belgium) -Exports (France-Italy) - Interconnections Storage has implicit value (defined by regulator) 28/10/2014 6

7 Storage in a liberal market Functionality are the same Flexibility (stability and optimisation of generation assets) Storage has price: = explicit value (set by the market) 10/28/

8 Storage in a liberal market Competing Generator 1 Competing Generator 2 Subsidised Renewables Generator Storable electricity Generator Politicians Government Regulator Power Exchanges TSO DSO Large ind. customers Large ind. customers (with self-generation) Small ind. customers Commercials Households Demand response/load shedding: Large ind. customers Competing Electricity retailer Competing Electricity retailer Competing Electricity retailer 10/28/20 14 TSO = Transmission Systems Operator DSO = Distribution System Operator 8

9 Wholesale market price ( /MWh) Hour of the day Prices (Germany) 2008 Annual average ( /MWh) 65.7 Average, 11am ( /MWh) 93.3 Average, 03am ( /MWh)

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11 Figure 1. Impact on power prices in the Nordic region marginal cost /MWh Gas Turbines Coal Condensers Oil 20 /ton 10 /ton Back Pressure Nuclear Power Hydropower Demand Source: Vattenfall. TWh/year Capacity 5 /ton 10/28/

12 Storage after renewable boom Functionalities are the same Flexibility (stability and optimisation of generation assets) Storage has price = explicit value (decreases) 10/28/

13 Wholesale market price ( /MWh) Installed capacity Solar PV, DE (GW) 6 36 Wind, DE (GW) Hour of the day Prices (Germany) Annual average ( /MWh) Average, 11am ( /MWh) Average, 03am ( /MWh)

14 Pumped storage business model does not work any longer 28/10/

15 In closing: more EU lessons Energy = security & sovereignty energy policies are national EU energy policies are national -> Art. 194 II Lisbon Treaty - Germany: renewables - France: nuclear - Spain-France interconnector - Norway - Switzerland - 28/10/

16 In closing: more EU lessons (2) Market integration = loss of autonomy Cost reflective prices Full costs Payment Cross-border benefits Balancing costs/prices But possibility of marginal trade 28/10/

17 EU agenda Electricity market (design) Remuneration of generators Overcapacities Carbon price Integration or renewables (e.g. ancillary services, balancing etc.) Renewables support systems 28/10/

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