TRANSFORMING THE POWER SYSTEMS OF THE HELLENIC NON INTERCONNECTED ISLANDS (Prospects and Challenges of the System Operator-HEDNO )

TRANSFORMING THE POWER SYSTEMS OF THE HELLENIC NON INTERCONNECTED ISLANDS (Prospects and Challenges of the System Operator-HEDNO ) Professor Nikolaos Chatziargyriou Chairman & CEO at HEDNO Eirini Stavropoulou Director of ISLANDS NETWORK OPERATION DEPARTMENT Professor Stavros Papathanasiou National Technical University of Athens

ABOUT US Turnover: 125 M (2015) Total Assets 582 M (2015) Av. Annual Investment 250 M HEDNO 7 th largest Electricity Distribution Corporation in EU 7,4 M Customers 6,5K Employees Average Electricity Consumption 42.300 GWh/year 236K Km Total Network Length (Earth s Girth x6) 2

OUR MISSION OUR MISSION IS TO ENSURE : the proper Operation, Maintenance and Development of the Distribution Network all over the country the proper Operation and Management of the Non- Interconnected Islands (NII s) Electrical Systems access of Producers and Suppliers to the NII s Electrical Systems and proper Operation of the Market in terms of transparency and impartiality 3

NII STRUCTURE Host 15% of the Greek population and account for almost 14% of the total national annual electricity consumption (~42,300 GWh/year) 60 Islands 32 Electrical Systems (ES) - 11 ES consisting of 39 interconnected islands - 21 ES consisting of autonomous islands - 31 Isolated Microgrids - 1 Small Isolated System (Crete) Categorized by Average Peak Demand (APD) [last 5 years] Large (APD > 100MW): 2 ES Medium (5MW < APD 100MW): 12 ES Small (APD 5MW): 18 ES 7

IN OPERATION AT NII (483 MW) (1845 MW) 20,73% 79,27% RES Thermal 8

HEDNO S ROLE AT NII Market Operator HEDNO ESO of NII Manager and Operator of NII s Energy Control Centers Distribution System Operator ESO: Electrical System Operator Transmission System Operator 9

GOALS HEDNO s major goals in the NIIs Adaptation to the upcoming challenges of HEDNO s role as NII s Electrical System Operator (ESO). Adapting an economic and an environmental approach of operation and management of NIIPS, in a manner that guarantees the secure operation of the systems ESO s future role At the moment, the electricity sector is going through major changes. The electricity grid is currently transformed from a traditional, one-directional system to a bi-directional, decentralized smart grid with active customers. The new model of electricity systems introduces increased complexity and redefines the role for HEDNO as NII s Electrical System Operator HEDNO as NII s ESO is required to adapt to the increased needs of such electrical systems. 11

GOALS HEDNO s major goals in the NIIs ESO s future role Adaptation to the upcoming challenges of HEDNO s role as NII s Electrical System Operator (ESO). Adapting an economic and an environmental approach of operation and management of NIIPS, in a manner that guarantees the secure operation of the systems...before Power plant Transmission Distribution Demand-side participation 12

GOALS HEDNO s major goals in the NIIs ESO s future role Adaptation to the upcoming challenges of HEDNO s role as NII s Electrical System Operator (ESO). Adapting an economic and an environmental approach of operation and management of NIIPS, in a manner that guarantees the secure operation of the systems after Wind integration CHP connection Power plant Transmission Distribution PV integration Demand-side participation Active Network Management Energy Storage EV Charging 13

GOALS HEDNO s major goals in the NIIs Adaptation to the upcoming challenges of HEDNO s role as NII s Electrical System Operator (ESO). Adapting an economic and an environmental approach of operation and management of NIIPS, in a manner that guarantees the secure operation of the systems ESO s future role Neutral market Facilitator Provider of flexible products and services to market participants Motivating and enabling prosumers involvement Implementing Smart grid technologies intelligent metering systems digitalization of distribution networks data acquisition management reliable demand response 14

GOALS HEDNO s major goals in the NIIs Adaptation to the upcoming challenges of HEDNO s role as NII s Electrical System Operator (ESO). Adapting an economic and an environmental approach of operation and management of NIIPS, in a manner that guarantees the secure operation of the systems 15 Economic and environmental-friendly management of NIIPS Compliance with Domestic and EU Guidelines and Regulations Reduction of CO2 emissions of thermal power stations in the NIIPS. Minimization of operational cost of thermal units. Increase of RES penetration.

CHALLENGES HEDNO s major challenges in the NIIs 01 02 03 Islands of different size, population and distance from the Mainland, without easy access at any time especially by the sea. Isolated ES, without energy exchange ability, with direct bearing on ensuring the availability of energy supply Due to lack of interconnections with electrical systems of high inertia, the NII s ES face problems of voltage and frequency stability 16

CHALLENGES HEDNO s major challenges in the NIIs Monthly Load Demand Variation in Greek NIIPS 2015-2016 04 High fluctuations of demand both on a daily and monthly basis. 19

CHALLENGES HEDNO s major challenges in the NIIs Large ES: Crete Peak Power Demand 2015-2016 05 Large variations of Peak Demand among ES, between 100 kw to 650 MW Medium ES: Mikonos Small ES: Astypalea 20

CHALLENGES 06 HEDNO s major challenges in the NIIs Constraints of RES penetration Greek Islands are characterized by high potential for RES due to very good wind regimes and solar irradiation levels. Technical and operational constraints of the conventional generating units (technical minimum production, frequency regulation) the maximum permissible RES penetration is limited 21

ANTIKYTHIRA ARKIOI OTHONI ERIKOUSA AGATHONISI DONOUSA GAVDOS ANAFI AG. EFSTRATIOS MEGISTI ASTYPALAIA MYKONOS SKYROS SERIFOS KYTHNOS SIFNOS AMORGOS SYMI PATMOS IKARIA CRETE RHODES THIRA KARPATHOS LIMNOS LESVOS SYROS PAROS KOS-KALYMNOS SAMOS MILOS CHIOS /MWh TRANSFORMING THE POWER SYSTEMS OF THE HELLENIC NON INTERCONNECTED ISLANDS CHALLENGES HEDNO s major challenges in the NIIs 400 Average Variable Cost (AVC) per NIIPS 2016 350 300 07 NII s Average Variable Cost (AVC) is substantially higher (2-8 times) than the average System Margin Price (SMP) of the mainland Grid 250 200 150 100 50 104,5 42,85 0 Weighted AVC of ES ( /MWh) SMP ( /MWh) Weighted AVC of NIIPS ( /MWh) 22

ROADMAP HEDNO s Roadmap for NIIs HEDNO s Core Infrastructure HEDNO s Core Infrastructure Modernize Network Control Centers Further implementation of Smart Metering Systems for Customers Set up Geographic Information System (GIS) Set up a web-based Customer Service System (Call Centers Upgrade Network Development Planning Re-organize Supply Chain Digitalization and Data Management through smart and integrated systems 23

ROADMAP HEDNO s Roadmap for NIIs HEDNO s Core Infrastructure NII s Infrastructure NII s Infrastructure Methodological Infrastructure Metering Infrastructure for producers Energy Control Centers (ECC) Development of the IT System for NII Implementation of a pilot Smart Island 24

ROADMAP HEDNO s Roadmap for NIIs NII s Infrastructure Thinking Ahead Thinking Ahead HEDNO s Core Infrastructure Implementation of storage Deploying and effectively managing dispatchable RES Demand side management Integrated solutions for very small NIIPS 25

THINKING AHEAD Thinking Ahead Implementation of storage The implementation of Storage in NIIPS is critical, taking into account the mentioned HEDNO s challenges. HEDNO s approach is that Storage could be provided by DSOs, in order to support the operation of the system without interfering with the electricity market. 26

TYPES OF STORAGE FOR NIIPS & MAINLAND Mid/longterm prospect Immediate possibility Immediate possibility under certain circumstances Maybe in the near fuiture Mid/long-term prospect Under implementation 27

Wind power curtailment (% of available production) TRANSFORMING THE POWER SYSTEMS OF THE HELLENIC NON INTERCONNECTED ISLANDS STORAGE BENEFITS Case Study Analysis Electrical System Medium - Large Significant Wind Capacity Increased Wind power Curtailment Storage Station Li-on Battery 10%-30% of installed wind power 1-4 hrs capacity Analysis Results Reduction/elimination of Curtailment Wind power penetration increase (~2%) Reduction of production cost (~1.5%) Reduction of Wind Curtailment 1 hour 2 hours 4 hours Curtailment minimization Storage station power (% of installed wind power) 28

RES penetration (%) TRANSFORMING THE POWER SYSTEMS OF THE HELLENIC NON INTERCONNECTED ISLANDS STORAGE BENEFITS Case Study Analysis Electrical System Medium - Large Significant Wind Capacity Increased Wind power Curtailment Storage Station Li-on Battery 10%-30% of installed wind power 1-4 hrs capacity Analysis Results Reduction/elimination of Curtailment Wind power penetration increase (~2%) Reduction of production cost (~1.5%) RES Penetration Increase 1 hour 2 hours 4 hours Increase up to approx. 2% with the existing Wind parks Storage station power (% of installed wind power) 29

Total generation system cost reduction (%) TRANSFORMING THE POWER SYSTEMS OF THE HELLENIC NON INTERCONNECTED ISLANDS STORAGE BENEFITS Case Study Analysis Total Production cost Electrical System Medium - Large Significant Wind Capacity Increased Wind power Curtailment Storage Station Li-on Battery 10%-30% of installed wind power 1-4 hrs capacity Analysis Results Reduction/elimination of Curtailment Wind power penetration increase (~2%) Reduction of production cost (~1.5%) 1 hour Reduction up to ~1.5% 2 hours 4 hours Storage station power (% of installed wind power) 30

Participation in the demand for primary reserve (%) TRANSFORMING THE POWER SYSTEMS OF THE HELLENIC NON INTERCONNECTED ISLANDS STORAGE BENEFITS Case Study Analysis Electrical System Medium - Large Significant Wind Capacity Increased Wind power Curtailment Storage Station Li-on Battery 10%-30% of installed wind power 1-4 hrs capacity Analysis Results Storage station contribution to primary reserve of the Electrical System up to 40% Reduction of thermal unit start-ups (15%) Primary Reserve Operation Compatible Units Batteries Storage station 31

STORAGE IN NIIPS Benefits Significantly improves system safety (primary reserve operation). Increases RES penetration (drastically decreases wind curtails). Improves thermal units operation (dispatching, loading, start-up). Reduces generation cost. Provides flexibility and fast reserve response. Reduces the need for Network investments. Actions to be made Appropriate adjustments to the regulatory framework. Conduction of economic-technical studies for the viability of such investments in specific islands. Pilot projects and evaluation of operation results. Development and enhancement of a new NIIPSmanagement philosophy, combining central storage, hybrid power stations and high RES penetration. Conclusion Energy Storage is a well-established technology. The implementation of energy storage by the utilities is reasonably investigated, since it can provide improved flexibility, cost reduction, increased security and enhanced management. 32

FURTHER ACTIONS Deploying and effectively managing dispatchable RES Regulatory framework largely in place and the development is now on the investors. Further initiatives required on behalf of the State to enhance the efficiency of the legal framework for licensing and implementing. Remuneration/support scheme & introduction of competitive procedures need to be finalized for the NIIPS. Demand side management Investments in smart grid technologies enabling Demand Response. Management of EV Charging Stations. Exploitation of other dispatchable loads to enhance RES absorption. Establishment of a suitable legal and regulatory framework. Integrated solutions for very small NIIPS Very Small islands absence of dispatchable RES stations, low peak annual demand ( 2-3 MW maximum), High Average Variable Cost. Increased RES share in production combined with storage. Flexible demand extending applicability on transportation, heating/cooling. Efficient and sophisticated management. Showcase R&D solutions in small and manageable scale and environment. 33

Challenges SUMMARY HEDNO is the DSO, TSO, Market Operator and Manager of NII s ECC for the Greek NIIPS. The Greek NIIPS is a challenging environment consisting of 32 isolated ES of low inertia, high RES potential, facing voltage and frequency stability problems. Major Goals Strategic Plan Adaptation to the upcoming challenges of the future ESO role. Adapting an economic and an environmental approach of operation and management of NIIPS, in a manner that guarantees the secure operation of the systems HEDNO s Core Infrastructure 1. Modernize Network Control Centers 2. Smart Metering Systems for Customers 3. Geographic Information System (GIS) 4. Web-based Customer Service System 5. Network Development Planning Upgrade 6. Re-organize Supply Chain 7. Digitalization and Data Management through smart and integrated systems NIIs infrastructure 1. Methodological Infrastructure 2. Metering Infrastructure 3. Energy Control Centers (ECC) 4. NIIs IT System 5. Pilot Smart Island Thinking ahead 1. Storage 2. Dispatchable RES 3. Demand side management 4. Integrated solutions for very small NIIPS Requirements Establishment of necessary legislative and financial framework Technical, operational and feasibility studies Social inclusive solutions to be endorsed by the local actors Funding for the necessary investments 34

THANK YOU Connecting people business infrastructure Providing Energy for every aspect of our life Stavropoulou Eirini Director of ISLANDS NETWORK OPERATION DEPARTMENT 98-100,Syggrou Ave., 117 41 Athens Tel.: +30 210 9090411 fax.:+30 210 9226456 e-mail: ei.stavropoulou@deddie.gr