Cost of Balancing Renewable Energy Sources in the Operation of Power Systems

Cost of Balancing Renewable Energy Sources in the Operation of Power Systems Achim Schreider IGEF Workshop Forecasting, Balancing and Scheduling Renewable Energy in India New Delhi, 5.5.214 Lahmeyer International GmbH 214

Agenda Introduction of Lahmeyer International Sample Market Operation of the German Power System on a high-res Penetration Day Reserve Requirements induced by RES Techno-Economic Principles of RES Integration Case Study: Cost of Balancing RES Conclusion Lahmeyer International GmbH 214 2

Company Data Lahmeyer Group: Foundation: Headquarter: Employees (212): Turnover (212): Sites: Projects: Activity: Fields (Group): 12 Affiliated Consolidated Companies 1966 Bad Vilbel, Germany 1,56 (Group) 157 million Euro (Group) Company Sites and Subsidiaries in 21 Countries In 165 Countries Technical and economic planning and consulting services Energy Hydropower & Water Resources Water Supply & Sanitation Building & Transportation Lahmeyer International GmbH 214 3

Fields of Activity - Energy Division Power Generation Conventional Energy Generation Renewable Energies Power Transmission and Distribution Energy Storage Energy Economics and Planning Coal PP Onshore /offshore HVAC / HVDC Pumped storage Government Steam PP wind energy Transmission plants (division advisory services Gas turbine PP Solar-thermal Networks hydropower and Financial analyses Combined Cycle energy (CSP) Regional power water resources) and modelling Power Plants Photovoltaics transmission and Batteries and other Climate change Cogeneration Biomass, biogas, distribution chemical storage advisory services plants and biofuels Overhead lines and Thermal storage Energy planning and Diesel and gas PP Waste-to-energy cable grids Misc. storage modelling engineering Geothermal energy Substations Energy master Combined heat systems Communication planning power plant Hybrid systems systems Market analyses Desalination Resource SCADA/NA/EMS/DMS Energy Audits assessments Network studies Energy saving Portfolio analysis Demand side management Lahmeyer International GmbH 214 4

Range of Services Market Analyses, Energy Economic Studies Project Management and Quality Assurance Contract Management Tendering and Purchasing Feasibility Studies Conceptual, Basic and Detail Design Due Diligence Conceptual Planning Design Review Construction and Erection Supervision Commissioning Training for Design, Project Management and Operation Operation and Maintenance Management Defects Liability Management Rehabilitation Pre-Investment Phase Option: Contract Award EPC Implementation Phase Start of Operation Operation Phase Lahmeyer International GmbH 214 5

Project Experience Worldwide Projects in 165 countries 12 Lahmeyer affiliated consolidated companies Company sites and subsidaries in 21 countries Representatives in 15 countries Lahmeyer Project Lahmeyer Company Local Office Principal Business Areas Lahmeyer International GmbH 214

Historic Development of Capacities & Generation in Germany Installed Capacities [GW] Gross Electricity Generation [TWh] 2. 18. 16. 14. 12. 1. 8. 6. 4. 2.. 1991 1992 1993 1994 1995 1996 1997 1998 1999 2 21 22 23 24 25 26 27 28 29 21 211 Other Biomass Geothermal PV Wind Hydro incl. PSH Nuclear Gas Oil Lignite Hard Coal 7. 6. 5. 4. 3. 2. 1.. 199 1991 1992 1993 1994 1995 1996 1997 1998 1999 2 21 22 23 24 25 26 27 28 29 21 211 212 Other Biomass Waste-to-Energy PV Wind Hydro incl. PSH Nuclear Gas Oil Lignite Hard Coal Source: BMWI Lahmeyer International GmbH 214 8

Development of RES installed capacity in Germany Wind PV Annual Capacity Addition [MW] 3,5 35, Annual Capacity Addition 3, Cumulated Capacity 3, 2,5 25, 2, 2, 1,5 15, 1, 1, 5 5, Cumulated Wind Capacity [MW] Annual Capacity Addition [MW] 8, 7, 6, 5, 4, 3, 2, 1, Annual Capacity Addition Cumulated Capacity 35, 3, 25, 2, 15, 1, 5, Cumulated PV Capacity [MW] '91 '93 '95 '97 '99 '1 '3 '5 '7 '9 '11 ' '1 '2 '3 '4 '5 '6 '7 '8 '9 '1 '11 '12 Source: BWE Source: BSW Lahmeyer International GmbH 214 9

Example Day (18.4.213) Overview on Market Prices and Operations Scheduled Wholesale Markets Day-ahead: European Energy Exchange (EEX) Intra-day: European Power Exchange Spot (EPEX Spot) Reserve Capacity Markets Primary reserve capacity (PRL) Secondary reserve capacity (SRL) Tertiary reserve capacity (MRL) Power Exchanges Auctionning by TSOs Obligatory TSO actions Redispatch Lahmeyer International GmbH 214 1

Reserve Power Technical Aspects Primary Reserve Provisionning through all ENTSO-E TSOs according to solidarity principle Automatic complete activation within 3 seconds Provisioning Period: < t < 15 minutes Secondary Reserve Energetic compensation of control zone and frequency regulation Direct automatic activation by concerned TSO Complete activation within 5 minutes Tertiary Reserve (Minutes Reserve) Activation by TSO both through telephone (still) and within generation schedule Complete activation within 15 minutes from telephone call Provisioning period: t > 15 minutes until 4 quarter hours per disturbance, up to several hours in case of several disturbances Lahmeyer International GmbH 214 11

Example: 18.4.213 8, Dispatch of the German Power System on 18.4.213 (Thursday) 55.% RES Penetration RES Penetration 7, 6, PV Wind Other Seasonal HPP 5.% 45.% 4.% Power [MWh/h] 5, 4, 3, PSH RoR HPP Gas Oil Coal Lignite 35.% 3.% 25.% 2.% 2, Nuclear Load 15.% 1.% 1, 5.% 1 2 3 4 5 6 7 8 9 1 11 12 13 14 15 16 17 18 19 2 21 22 23.% 2 4 6 8 1 12 14 16 18 2 22 Hour of day Hour of day Source: EEX / ENTSO-E Lahmeyer International GmbH 214 12

Example: 18.4.213 Schedule Market (day-ahead): European Energy Exchange (EEX) Dispatch of the German Power System on 18.4.213 (Thursday) 8, 55.% 7, PV 5.% Wind 45.% 6, Other Seasonal HPP 4.% Power [MWh/h] 5, 4, PSH RoR HPP Gas Oil Coal 35.% 3.% 25.% 3, Lignite 2.% 2, Nuclear Load 15.% 1.% 1, 5.% 1 2 3 4 5 6 7 8 9 1 11 12 13 14 15 16 17 18 19 2 21 22 23 Hour of day.% High-RES: 27 EUR/MWh Peaks: 4 EUR/MWh Source: EEX Lahmeyer International GmbH 214 13

Example: 18.4.213 Spot Market (intraday): European Power Exchange (EPEX Spot) Dispatch of the German Power System on 18.4.213 (Thursday) 8, 55.% 7, PV Wind 5.% 45.% 6, Other Seasonal HPP 4.% Power [MWh/h] 5, 4, 3, PSH RoR HPP Gas Oil Coal Lignite Nuclear 35.% 3.% 25.% 2.% 2, Load 15.% 1.% 1, 5.% 1 2 3 4 5 6 7 8 9 1 11 12 13 14 15 16 17 18 19 2 21 22 23.% Hour of day volumes Source: EPEX Lahmeyer International GmbH 214 14

Example: 18.4.213 Primary Reserve: Capacity bid curve (15.-21.4.213) 35 8, 7, Dispatch of the German Power System on 18.4.213 (Thursday) PV 55.% 5.% Capacity bid [EUR/MW] 3 25 2 15 1 5 Power [MWh/h] 6, 5, 4, 3, 2, 1, 1 2 3 4 5 6 7 8 9 1 11 12 13 14 15 16 17 18 19 2 21 22 23 Hour of day Wind Other Seasonal HPP PSH RoR HPP Gas Oil Coal Lignite Nuclear Load 45.% 4.% 35.% 3.% 25.% 2.% 15.% 1.% 5.%.% 1 2 3 Capacity [MW] 4 5 6 Bids for provisioning of PRL in one week Lahmeyer International GmbH 214 15

8, 7, 6, 5, 4, 3, 2, 1, 1 2 3 4 5 6 7 8 9 1 11 12 13 14 15 16 17 18 19 2 21 22 23 Hour of day PV Wind Other Seasonal HPP PSH RoR HPP Gas Oil Coal Lignite Nuclear Load 55.% 5.% 45.% 4.% 35.% 3.% 25.% 2.% 15.% 1.% 5.%.% 2 4 6 8 1 Hour Example: 18.4.213 Secondary Reserve: Bid curves for positive SRL (15.-21.4.213) Power [MWh/h] Dispatch of the German Power System on 18.4.213 (Thursday) Energy bids [EUR/MWh] 6 5 4 3 2 1 Positive SRL bids for 8: - 2: Energy bids [EUR/MWh] 6 5 4 3 2 1 Energy bid curve for positive SRL 8: - 2: 1 2 3 Capacity bids [EUR/MW] 4 5 5 1 15 Capacity [MW] 2 25 Bids for provisioning of SRL in one week Lahmeyer International GmbH 214 16

Example: 18.4.213 Secondary Reserve: Bid Curve & Provisioning Dispatch of the German Power System on 18.4.213 (Thursday) 8, 55.% 2 15 SRL Provision Power [MWh/h] 7, 6, 5, 4, 3, PV Wind Other Seasonal HPP PSH RoR HPP Gas Oil Coal Lignite 5.% 45.% 4.% 35.% 3.% 25.% 2.% 1 2, Nuclear Load 15.% 1.% SRL [MW] 5 pos neg 1, 1 2 3 4 5 6 7 8 9 1 11 12 13 14 15 16 17 18 19 2 21 22 23 Hour of day 5.%.% -5-1 -15 1 2 3 4 5 6 7 8 9 1 11 12 13 14 15 16 17 18 19 2 21 22 23 hour of day Energy bids [EUR/MWh] 6 5 4 3 2 1 Energy bid curve for positive SRL 8: - 2: 5 1 15 Capacity [MW] 2 25 Lahmeyer International GmbH 214 17

8, 7, 6, 5, 4, 3, 2, 1, 1 2 3 4 5 6 7 8 9 1 11 12 13 14 15 16 17 18 19 2 21 22 23 Hour of day PV Wind Other Seasonal HPP PSH RoR HPP Gas Oil Coal Lignite Nuclear Load 55.% 5.% 45.% 4.% 35.% 3.% 25.% 2.% 15.% 1.% 5.%.% 2 4 6 8 1 Hour Example: 18.4.213 Tertiary Reserve: Bid curves for positive MRL (18.4.213) Power [MWh/h] Dispatch of the German Power System on 18.4.213 (Thursday) Energy bid [EUR/MWh] Negative MRL bids 8: - 12: 1 1 1 1 1.1.1.1 1 1 1 1 Capacity bid [EUR/MW] Energy bid [EUR/MWh] 9 8 7 6 5 4 3 2 1 Energy bids neg. MRL 8:-12: 5 1 15 2 25 3 Capacity [MW] Bids for provisioning of MRL on one day Lahmeyer International GmbH 214 18

Tertiary Reserve: Bid Curve & Provisioning Example: 18.4.213 Dispatch of the German Power System on 18.4.213 (Thursday) MRL provisioning 8, 7, PV Wind 55.% 5.% 45.% 1 5 Power [MWh/h] 6, 5, 4, 3, 2, Other Seasonal HPP PSH RoR HPP Gas Oil Coal Lignite Nuclear Load 4.% 35.% 3.% 25.% 2.% 15.% 1.% MRL [MW] -5 pos neg 1, 1 2 3 4 5 6 7 8 9 1 11 12 13 14 15 16 17 18 19 2 21 22 23 Hour of day Energy bids neg. MRL 8:-12: 5.%.% 9-1 -15 1 2 3 4 5 6 7 8 9 11112131415161718192212223 hour of day Energy bid [EUR/MWh] 8 7 6 5 4 3 2 1 5 1 15 Capacity [MW] 2 25 3 Lahmeyer International GmbH 214 19

Necessary Redispatch Measures by TSOs Example: 18.4.213 Redispatch of scheduled generation 8, 7, Dispatch of the German Power System on 18.4.213 (Thursday) PV 55.% 5.% Wind 45.% Redispatch of generation [MW] 4 3 2 1-1 -2-3 -4 1 2 3 4 5 6 7 8 9 1 11 12 13 14 15 16 17 18 19 2 21 22 23 increase decrease Power [MWh/h] 6, 5, 4, 3, 2, 1, 1 2 3 4 5 6 7 8 9 1 11 12 13 14 15 16 17 18 19 2 21 22 23 Hour of day Reasons: - RES feed-in management - Current caused - Voltage caused Other Seasonal HPP PSH RoR HPP Gas Oil Coal Lignite Nuclear Load 4.% 35.% 3.% 25.% 2.% 15.% 1.% 5.%.% hour of day Lahmeyer International GmbH 214 2

Reserve Capacity Requirements Without RES in the power system reserves are kept Loss of largest generator ( sizing incident ) Noise in load demand Load forecast errors for: Control Reserves within ENTSO-E grid RES volatility can be distinguished according to its delay, which is determined by time and amplitude of generation trips Load gradient as indicator of the degree of volatility of RES Typically, according to delay => distinction in two (or three) categories: Primary Reserve Requirement (seconds to minutes) Secondary Reserve Requirement (minutes to hours) Lahmeyer International GmbH 214 22

Primary Reserve Requirement induced by Wind Power Wind Power Harsh load gradients evoked by wind gusts Smoothening of rotating masses (gear, gear box, generator) in the domain of seconds to minutes However, rather fast change over time Lahmeyer International GmbH 214 23

Frequency (%) 1 1 1.1 Frequency of change in power output of sample WTGs Frequency of change in power output of sum of WTG_3 and WTG_4 Delay 1 s 2 s 3 s 5 s 1 s 3 s 6 s 12 s 3 s 6 s 9 s 18 s 27 s 36 s.1-1 -.9 -.8 -.7 -.6 -.5 -.4 -.3 -.2 -.1.1.2.3.4.5.6.7.8.9 1 Change in p.u. of rated Capacity Lahmeyer International GmbH 214 24

Primary Reserve Requirement induced by PV Power PV Intermittency is depending on: Local site conditions (climatic) Surface of the PV modules Shading Clouds Rainfall => Potentially very fast changes over time, decreasing with increasing size of plant Effect of Geographic diversity on PV volatility Source: Sandia National Laboratories Source: Apt & Curtright 28 Lahmeyer International GmbH 214 25

Secondary Reserve Requirement induced by RES Day-ahead unit commitment scheduling Forecast of RES power output Imprecision of RES forecast may lead to too few committed conventional power => Requirement for Secondary reserve Capacity => RES forecast error crucial for correct determination of secondary reserve requirement Lahmeyer International GmbH 214 26

Secondary Reserve Requirement induced by PV Power (sample) 95% - percentile Linear Approximation 75% - percentile Median 25% - percentile 5% - percentile 2-σ confidence level = 97.7% - percentile Lahmeyer International GmbH 214 27

Partial Load Characterstics of Non-CCGT units Average Heat Rate Average Production Cost Heat Rate [kj/kwhel] at given output level 16, 14, 12, 1, 8, 6, 4, 2, Domunli OCGT OCGT 5 1 Output Level [MW] 15 2 Production Cost [USD/h] at given output level Increased reserve provisioning brings up heat rate of TPPs => Production costs increase Domunli OCGT OCGT 2 18 16 14 12 1 8 6 4 2 5 1 Output Level [MW] 15 2 Lahmeyer International GmbH 214 29

Partial Load Characterstics of CCGT units Average Heat Rate Absolute Production Cost Curve 25 Sunon CCGT CCGT 2+1 2+1 Sunon CCGT CCGT 2+1 2+1 12, Incremental Cost [USD/MWh] at given output level 2 15 1 5 2 4 6 8 1 12 Output Level [MW] Production Cost [USD/h] at given output level 1, 8, 6, 4, 2, 2 4 6 8 1 12 Output Level [MW] Lahmeyer International GmbH 214 3

Merit Order Effect Marginal Costs [EUR/MWh] Marginal Costs [EUR/MWh] oil oil High Electricity Price when low level of RES hydro lignite coal natural gas Low Electricity Price when hydro lignite coal natural gas nuclear of RES nuclear Capacity [GW] Capacity [GW] Demand Demand Lahmeyer International GmbH 214 31

Evaluation of Techno-Economic Effects of RES Integration Methodology: Simulation of the operational dispatch of the power system, considering Economic Dispatch (ED) Unit Commitment (UC) Reserve Provisioning For this LI has developed the Model LIPS-OP (Lahmeyer International Power System - Operational Planning) Lahmeyer International GmbH 214 32

Case Study: Gas dominated Power System with 4,5 MW 3,6 MW Gas turbines (Gas & gasoil fired), of this CCGT: 1,5 MW (comined cycle), 4h minimum up and 2h minimum down time OCGT: 2,2 MW (open cycle), 1h minimum up and down time 9 MW Steam turbines combusting Coal and HFO: 8h minimum up and 3h minimum down time 1, MW Hydro power: average daily production (58 MWxh) Largest unit: 25 MW (main determinant for primary reserve requirement, sizing incident ) Wind power: rather constant feed-in, capacity factor 37.1% PV power: daily sunshine peaks, capacity factor 22.3% Lahmeyer International GmbH 214 Fuel Price [EUR/MWh] 9 8 7 6 5 4 3 2 1 Fuel Prices Gas HFO Coal Gasoil Coal 1% Gasoil 5% HFO 9% 4,5 MW total Gas 76% 34

Case Study: Reserve Requirements Primary Reserve Requirement: Wind: 5% of installed capacity PV: 1% of installed capacity based on idealised feed-in potential Secondary Reserve Requirement: Wind PV Lahmeyer International GmbH 214 35

Case Study: Wind Integration into Sample Power System Wind Power capacity: MW Costs: Savings: 5,927,422 EUR EUR 7, Power Output - Units Demand [MW] PV Wind 6, Hydro Abu Sultan #2 Ataka 3 Ain Sokhna #1 Dairout BOO #6 Cairo 5, South 1a #1 Dairout BOO #1 Generic CCGT Unit #9 Generic CCGT Unit #8 Giza North #1 4, Dairout BOO #2 Diamitta West 2 #1 Diamitta (old) #9 Diamitta (old) #8 Diamitta (old) #7 3, Diamitta (old) #6 Diamitta (old) #4 Diamitta (old) #3 Cairo South 2 Cairo North #6 2, Cairo North #5 Cairo North #4 Cairo North #1 Banha #3 Total Demand 1, Available Rated TPP Capacity Primary Reserve Requirement Secondary Reserve Requirement Primary Reserve Secondary Reserve 1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53 55 57 59 61 63 65 67 69 71 73 75 77 79 81 83 85 87 89 91 93 95 97 99 11 13 15 17 19 111 113 115 117 119 121 123 125 127 129 131 133 135 137 139 141 143 145 147 149 151 153 155 157 159 161 163 165 167 Hour [h] Lahmeyer International GmbH 214 36

Case Study: Wind Integration into Sample Power System Wind Power capacity: 1, MW Costs: Savings: 43,42,767 EUR 7,56,655 EUR 7, Power Output - Units Demand [MW] PV Wind 6, Hydro Abu Sultan #2 Ataka 3 Ain Sokhna #1 Dairout BOO #6 Cairo 5, South 1a #1 Dairout BOO #1 Generic CCGT Unit #9 Generic CCGT Unit #8 Giza North #1 4, Dairout BOO #2 Diamitta West 2 #1 Diamitta (old) #9 Diamitta (old) #8 Diamitta (old) #7 3, Diamitta (old) #6 Diamitta (old) #4 Diamitta (old) #3 Cairo South 2 Cairo North #6 2, Cairo North #5 Cairo North #4 Cairo North #1 Banha #3 Total Demand 1, Available Rated TPP Capacity Primary Reserve Requirement Secondary Reserve Requirement Primary Reserve Secondary Reserve 1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53 55 57 59 61 63 65 67 69 71 73 75 77 79 81 83 85 87 89 91 93 95 97 99 11 13 15 17 19 111 113 115 117 119 121 123 125 127 129 131 133 135 137 139 141 143 145 147 149 151 153 155 157 159 161 163 165 167 Hour [h] Lahmeyer International GmbH 214 37

Case Study: Wind Integration into Sample Power System Wind Power capacity: 2, MW Costs: Savings: 37,123,755 EUR 13,83,667 EUR 7, Power Output - Units Demand [MW] PV Wind 6, Hydro Abu Sultan #2 Ataka 3 Ain Sokhna #1 Dairout BOO #6 Cairo 5, South 1a #1 Dairout BOO #1 Generic CCGT Unit #9 Generic CCGT Unit #8 Giza North #1 4, Dairout BOO #2 Diamitta West 2 #1 Diamitta (old) #9 Diamitta (old) #8 Diamitta (old) #7 3, Diamitta (old) #6 Diamitta (old) #4 Diamitta (old) #3 Cairo South 2 Cairo North #6 2, Cairo North #5 Cairo North #4 Cairo North #1 Banha #3 Total Demand 1, Available Rated TPP Capacity Primary Reserve Requirement Secondary Reserve Requirement Primary Reserve Secondary Reserve 1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53 55 57 59 61 63 65 67 69 71 73 75 77 79 81 83 85 87 89 91 93 95 97 99 11 13 15 17 19 111 113 115 117 119 121 123 125 127 129 131 133 135 137 139 141 143 145 147 149 151 153 155 157 159 161 163 165 167 Hour [h] Lahmeyer International GmbH 214 38

Case Study: Wind Integration into Sample Power System Wind Power capacity: 3, MW Costs: Savings: 32,8,68 EUR 18,918,813 EUR 7, Power Output - Units Demand [MW] PV Wind 6, Hydro Abu Sultan #2 Ataka 3 Ain Sokhna #1 Dairout BOO #6 Cairo 5, South 1a #1 Dairout BOO #1 Generic CCGT Unit #9 Generic CCGT Unit #8 Giza North #1 4, Dairout BOO #2 Diamitta West 2 #1 Diamitta (old) #9 Diamitta (old) #8 Diamitta (old) #7 3, Diamitta (old) #6 Diamitta (old) #4 Diamitta (old) #3 Cairo South 2 Cairo North #6 2, Cairo North #5 Cairo North #4 Cairo North #1 Banha #3 Total Demand 1, Available Rated TPP Capacity Primary Reserve Requirement Secondary Reserve Requirement Primary Reserve Secondary Reserve 1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53 55 57 59 61 63 65 67 69 71 73 75 77 79 81 83 85 87 89 91 93 95 97 99 11 13 15 17 19 111 113 115 117 119 121 123 125 127 129 131 133 135 137 139 141 143 145 147 149 151 153 155 157 159 161 163 165 167 Hour [h] Lahmeyer International GmbH 214 39

Case Study: Wind Integration into Sample Power System Wind Power capacity: 4, MW Costs: Savings: 27,558,277 EUR 23,369,144 EUR 7, Power Output - Units Demand [MW] PV Wind 6, Hydro Abu Sultan #2 Ataka 3 Ain Sokhna #1 Dairout BOO #6 Cairo 5, South 1a #1 Dairout BOO #1 Generic CCGT Unit #9 Generic CCGT Unit #8 Giza North #1 4, Dairout BOO #2 Diamitta West 2 #1 Diamitta (old) #9 Diamitta (old) #8 Diamitta (old) #7 3, Diamitta (old) #6 Diamitta (old) #4 Diamitta (old) #3 Cairo South 2 Cairo North #6 2, Cairo North #5 Cairo North #4 Cairo North #1 Banha #3 Total Demand 1, Available Rated TPP Capacity Primary Reserve Requirement Secondary Reserve Requirement Primary Reserve Secondary Reserve 1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53 55 57 59 61 63 65 67 69 71 73 75 77 79 81 83 85 87 89 91 93 95 97 99 11 13 15 17 19 111 113 115 117 119 121 123 125 127 129 131 133 135 137 139 141 143 145 147 149 151 153 155 157 159 161 163 165 167 Hour [h] Lahmeyer International GmbH 214 4

Case Study: Wind Integration into Sample Power System Wind Power capacity: 5, MW Costs: Savings: 26,151,522 EUR 24,775,9 EUR 7, Power Output - Units Demand [MW] PV Wind 6, Hydro Abu Sultan #2 Ataka 3 Ain Sokhna #1 Dairout BOO #6 Cairo 5, South 1a #1 Dairout BOO #1 Generic CCGT Unit #9 Generic CCGT Unit #8 Giza North #1 4, Dairout BOO #2 Diamitta West 2 #1 Diamitta (old) #9 Diamitta (old) #8 Diamitta (old) #7 3, Diamitta (old) #6 Diamitta (old) #4 Diamitta (old) #3 Cairo South 2 Cairo North #6 2, Cairo North #5 Cairo North #4 Cairo North #1 Banha #3 Total Demand 1, Available Rated TPP Capacity Primary Reserve Requirement Secondary Reserve Requirement Primary Reserve Secondary Reserve 1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53 55 57 59 61 63 65 67 69 71 73 75 77 79 81 83 85 87 89 91 93 95 97 99 11 13 15 17 19 111 113 115 117 119 121 123 125 127 129 131 133 135 137 139 141 143 145 147 149 151 153 155 157 159 161 163 165 167 Hour [h] Lahmeyer International GmbH 214 41

Case Study: Wind Integration into Sample Power System Wind Power: MW Reserve [MW] 7 6 5 4 3 2 1 1 Primary Reserve HPP TPP Requirements Reserve [MW] 8 7 6 5 4 3 2 1 8 15 22 29 36 43 5 57 64 71 78 85 92 99 16 113 12 127 134 141 148 155 162 Time [h] 1 Secondary Reserve HPP TPP Requirement 8 15 22 29 36 43 5 57 64 71 78 85 92 99 16 113 12 127 134 141 148 155 162 Time [h] Wind Power: 5, MW Reserve [MW] 6 5 4 3 2 1 Primary Reserve HPP TPP Requirements Reserve [MW] 2,5 2, 1,5 1, 5 Secondary Reserve HPP TPP Requirement 1 8 15 22 29 36 43 5 57 64 71 78 85 92 99 16 113 12 127 134 141 148 155 162 Time [h] 1 8 15 22 29 36 43 5 57 64 71 78 85 92 99 16 113 12 127 134 141 148 155 162 Time [h] Lahmeyer International GmbH 214 42

Case Study: Wind Integration into Sample Power System Savings [EUR] Weekly savings induced by wind energy 35,, 3,, 25,, 2,, 15,, 1,, 5,, -5,, -1,,.% 1.% 2.% 3.% 4.% 5.% 6.% RES penetration Estimated Actual Balancing Benefit/Cost Variable Production Costs [EUR/MWh] Avg variable production costs of TPP 12. 115. 11. 15. 1. 95. 9. 85. 8..% 1.% 2.% 3.% 4.% 5.% 6.% RES penetration Estimated based on avg production cost of TPPs (of 94.6 EUR/MWh) Merit Order Effect Increased Reserve Requirement Lahmeyer International GmbH 214 43

Case Study: Wind Integration into Sample Power System Avg variable production costs (SRMC) Avg variable production costs of TPP 14. 12. Variable Production Costs [EUR/MWh] 12. 1. 8. 6. 4. 2...% 1.% 2.% 3.% 4.% RES penetration 5.% 6.% Variable Production Costs [EUR/MWh] 115. 11. 15. 1. 95. 9. 85. 8..% 1.% 2.% 3.% 4.% RES penetration 5.% 6.% Short Run Marginal Costs (SRMC) of the entire system (all units: TPP, HPP, RES) System SRMC decreases due to increased share of RES with SMRC of zero Lahmeyer International GmbH 214 44

Case Study: PV Integration into Sample Power System PV Power capacity: MW Costs: Savings: 5,927,422 EUR EUR Power Output - Units 6, PV Wind 5, Hydro Abu Sultan #2 Ataka 3 Ain Sokhna #1 Dairout BOO #6 Cairo South 1a #1 Dairout 4, BOO #1 Generic CCGT Unit #9 Generic Demand [MW] 3, 2, 1, CCGT Unit #8 Giza North #1 Dairout BOO #2 Diamitta West 2 #1 Diamitta (old) #9 Diamitta (old) #8 Diamitta (old) #7 Diamitta (old) #6 Diamitta (old) #4 Diamitta (old) #3 Cairo South 2 Cairo North #6 Cairo North #5 Cairo North #4 Cairo North #1 Banha #3 Total Demand Available Rated TPP Capacity Primary Reserve Requirement Secondary Reserve Requirement Primary Reserve 1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53 55 57 59 61 63 65 67 69 71 73 75 77 79 81 83 85 87 89 91 93 95 97 99 11 13 15 17 19 111 113 115 117 119 121 123 125 127 129 131 133 135 137 139 141 143 145 147 149 151 153 155 157 159 161 163 165 167 Hour [h] Secondary Reserve Lahmeyer International GmbH 214 45

Case Study: PV Integration into Sample Power System PV Power capacity: 5 MW Costs: Savings: 48,683,64 EUR 2,244,358 EUR Power Output - Units 6, PV Wind 5, Hydro Abu Sultan #2 Ataka 3 Ain Sokhna #1 Dairout BOO #6 Cairo South 1a #1 Dairout 4, BOO #1 Generic CCGT Unit #9 Generic Demand [MW] 3, 2, 1, CCGT Unit #8 Giza North #1 Dairout BOO #2 Diamitta West 2 #1 Diamitta (old) #9 Diamitta (old) #8 Diamitta (old) #7 Diamitta (old) #6 Diamitta (old) #4 Diamitta (old) #3 Cairo South 2 Cairo North #6 Cairo North #5 Cairo North #4 Cairo North #1 Banha #3 Total Demand Available Rated TPP Capacity Primary Reserve Requirement Secondary Reserve Requirement Primary Reserve 1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53 55 57 59 61 63 65 67 69 71 73 75 77 79 81 83 85 87 89 91 93 95 97 99 11 13 15 17 19 111 113 115 117 119 121 123 125 127 129 131 133 135 137 139 141 143 145 147 149 151 153 155 157 159 161 163 165 167 Hour [h] Secondary Reserve Lahmeyer International GmbH 214 46

Case Study: PV Integration into Sample Power System PV Power capacity: 1, MW Costs: Savings: 46,617,635 EUR 4,39,786 EUR Power Output - Units 6, PV Wind 5, Hydro Abu Sultan #2 Ataka 3 Ain Sokhna #1 Dairout BOO #6 Cairo South 1a #1 Dairout 4, BOO #1 Generic CCGT Unit #9 Generic Demand [MW] 3, 2, 1, CCGT Unit #8 Giza North #1 Dairout BOO #2 Diamitta West 2 #1 Diamitta (old) #9 Diamitta (old) #8 Diamitta (old) #7 Diamitta (old) #6 Diamitta (old) #4 Diamitta (old) #3 Cairo South 2 Cairo North #6 Cairo North #5 Cairo North #4 Cairo North #1 Banha #3 Total Demand Available Rated TPP Capacity Primary Reserve Requirement Secondary Reserve Requirement Primary Reserve 1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53 55 57 59 61 63 65 67 69 71 73 75 77 79 81 83 85 87 89 91 93 95 97 99 11 13 15 17 19 111 113 115 117 119 121 123 125 127 129 131 133 135 137 139 141 143 145 147 149 151 153 155 157 159 161 163 165 167 Hour [h] Secondary Reserve Lahmeyer International GmbH 214 47

Case Study: PV Integration into Sample Power System PV Power capacity: 1,5 MW Costs: Savings: 44,942,269 EUR 5,985,153 EUR Power Output - Units 6, PV Wind 5, Hydro Abu Sultan #2 Ataka 3 Ain Sokhna #1 Dairout BOO #6 Cairo South 1a #1 Dairout 4, BOO #1 Generic CCGT Unit #9 Generic Demand [MW] 3, 2, 1, CCGT Unit #8 Giza North #1 Dairout BOO #2 Diamitta West 2 #1 Diamitta (old) #9 Diamitta (old) #8 Diamitta (old) #7 Diamitta (old) #6 Diamitta (old) #4 Diamitta (old) #3 Cairo South 2 Cairo North #6 Cairo North #5 Cairo North #4 Cairo North #1 Banha #3 Total Demand Available Rated TPP Capacity Primary Reserve Requirement Secondary Reserve Requirement Primary Reserve 1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53 55 57 59 61 63 65 67 69 71 73 75 77 79 81 83 85 87 89 91 93 95 97 99 11 13 15 17 19 111 113 115 117 119 121 123 125 127 129 131 133 135 137 139 141 143 145 147 149 151 153 155 157 159 161 163 165 167 Hour [h] Secondary Reserve Lahmeyer International GmbH 214 48

Case Study: PV Integration into Sample Power System PV Power capacity: 2, MW Costs: Savings: 43,271,43 EUR 7,656,378 EUR Power Output - Units 6, PV Wind 5, Hydro Abu Sultan #2 Ataka 3 Ain Sokhna #1 Dairout BOO #6 Cairo South 1a #1 Dairout 4, BOO #1 Generic CCGT Unit #9 Generic Demand [MW] 3, 2, 1, CCGT Unit #8 Giza North #1 Dairout BOO #2 Diamitta West 2 #1 Diamitta (old) #9 Diamitta (old) #8 Diamitta (old) #7 Diamitta (old) #6 Diamitta (old) #4 Diamitta (old) #3 Cairo South 2 Cairo North #6 Cairo North #5 Cairo North #4 Cairo North #1 Banha #3 Total Demand Available Rated TPP Capacity Primary Reserve Requirement Secondary Reserve Requirement Primary Reserve 1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53 55 57 59 61 63 65 67 69 71 73 75 77 79 81 83 85 87 89 91 93 95 97 99 11 13 15 17 19 111 113 115 117 119 121 123 125 127 129 131 133 135 137 139 141 143 145 147 149 151 153 155 157 159 161 163 165 167 Hour [h] Secondary Reserve Lahmeyer International GmbH 214 49

Case Study: PV Integration into Sample Power System PV Power capacity: 2,5 MW Costs: Savings: 42,399,732 EUR 8,527,69 EUR Power Output - Units 6, PV Wind 5, Hydro Abu Sultan #2 Ataka 3 Ain Sokhna #1 Dairout BOO #6 Cairo South 1a #1 Dairout 4, BOO #1 Generic CCGT Unit #9 Generic Demand [MW] 3, 2, 1, CCGT Unit #8 Giza North #1 Dairout BOO #2 Diamitta West 2 #1 Diamitta (old) #9 Diamitta (old) #8 Diamitta (old) #7 Diamitta (old) #6 Diamitta (old) #4 Diamitta (old) #3 Cairo South 2 Cairo North #6 Cairo North #5 Cairo North #4 Cairo North #1 Banha #3 Total Demand Available Rated TPP Capacity Primary Reserve Requirement Secondary Reserve Requirement Primary Reserve 1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53 55 57 59 61 63 65 67 69 71 73 75 77 79 81 83 85 87 89 91 93 95 97 99 11 13 15 17 19 111 113 115 117 119 121 123 125 127 129 131 133 135 137 139 141 143 145 147 149 151 153 155 157 159 161 163 165 167 Hour [h] Secondary Reserve Lahmeyer International GmbH 214 5

Case Study: PV Integration into Sample Power System PV Power: MW 7 6 5 4 3 2 1 1 8 15 22 29 36 43 5 57 64 71 78 85 92 99 16 113 12 127 134 141 148 155 162 Reserve [MW] Primary Reserve HPP TPP Requirements 8 7 6 5 4 3 2 1 Time [h] 1 8 15 22 29 36 43 5 57 64 71 78 85 92 99 16 113 12 127 134 141 148 155 162 Reserve [MW] Secondary Reserve HPP TPP Requirement Time [h] PV Power: 2,5 MW 6 5 Primary Reserve 2,5 2, Secondary Reserve Reserve [MW] 4 3 2 1 HPP TPP Requirements Reserve [MW] 1,5 1, 5 HPP TPP Requirement 1 8 15 22 29 36 43 5 57 64 71 78 85 92 99 16 113 12 127 134 141 148 155 162 Time [h] 1 8 15 22 29 36 43 5 57 64 71 78 85 92 99 16 113 12 127 134 141 148 155 162 Time [h] Lahmeyer International GmbH 214 51

Case Study: PV Integration into Sample Power System Savings [EUR] Weekly savings induced by PV energy 1,, 8,, 6,, 4,, 2,, -2,,.% 2.% 4.% 6.% 8.% 1.% 12.% 14.% 16.% RES penetration Estimated Actual Balancing Benefit/Cost Variable Production Costs [EUR/MWh] Avg variable production costs of TPP 96. 95.5 95. 94.5 94. 93.5 93. 92.5 92..% 2.% 4.% 6.% 8.% 1.% 12.% 14.% 16.% RES penetration Estimated based on avg production cost of TPPs (of 94.6 EUR/MWh) Merit Order Effect Increased Reserve Requirement Lahmeyer International GmbH 214 52

Case Study: RES Integration into Sample Power System Over/under proportional savings of the integration of Wind & PV: Both firstly decrease SRMC further than expected (merit order effect) PV increases balancing cost already for smaller penetrations (=> due to timing and larger reserve requirement) Based on constant feed-in of wind positive effect until penetration of 37% Balancing Benefit/Cost [%] 25% 2% Wind PV 15% 1% 5% % -5% -1% -15% -2%.% 1.% 2.% 3.% 4.% 5.% 6.% RES Penetration [%] => Cost/Benefit of RES balancing is different for each technology and also for each power system Lahmeyer International GmbH 214 53

Determinants for RES Integration Shape of load curve Feed-in patterns of Wind, PV, Forecast accuracy of RES feed-in (=> reserve requirements) Current level and development of fuel prices Composition of power plant fleet Share & type of hydro Availability of storage (e.g. pumped hydro) Shares of CCGTs, GTs, STs, ICEs with respective partial load characteristics Technical characteristics of each unit Installed capacity Fuel consumed Partial load behaviour (Heat Rate Curves) Minimum up and down times Ramping capabilities Lahmeyer International GmbH 214 54

Conclusion RES induce volatility Volatility can be distinguished according to time domain Volatility increases need for reserve power Methodology presented (operational dispatch UC, ED, Res.Prov.) can determine benefits & cost of balancing RES in terms of Increased reserve requirements for frequency regulation Merit Order Effect Other aspects are relevant for the grid integration of RES, such as Reactive Power Management Voltage Regulation Transient Issues => Grid study is required for the determination of the impact of RES on the grid Lahmeyer International GmbH 214 56

Contact Achim Schreider Energy System Planner Energy Economics & Planning Department Tel.: +49 611 / 55-1185 Fax: +49 611 / 55-1188 achim.schreider@de.lahmeyer.com Lahmeyer International GmbH, Friedberger Str. 173, 61118 Bad Vilbel, Germany Lahmeyer International GmbH 214 57

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