Project introduction Frits van Oostvoorn Adriaan van der Welle Energy research Centre of the Netherlands, ECN IEA DSM Agreement Workshop 9 July 2008, Petten Supported by
Project consortium 2007-2009 Imperial College RISOE ECN dena ISET Red Eléctrica de España University Pontificia Comillas 2
Objectives and main activities Objective Identify, analyse and evaluate Economic efficient market-based Response options to reduce the negative (increasing system costs) impacts of a strongly increasing penetration of intermittent RES-E and DG sources on the electricity system. This to meet EU RES targets for 2020; Identify, analyse and assess response options by market participants that support a more economic efficient integration of variable RES-E and DG in the electricity system. barriers and failures in market competition and present regulation that currently hinder these response options to be developed and implemented; policy and regulatory instruments & conditions to promote the application of these efficient response options by market parties in future. Final results A concise set of economic efficient policy responses and the policy & regulatory framework to facilitate its implementation by regulators & policy makers awareness among market parties, stakeholders & policy makers of these economic efficient market-based response options by workshops, articles etc 3
Project progress so far Impact analysis of increasing intermittent RES-E and DG penetration Development of RES (intermittency) scenarios of the electricity system Impacts on generation, demand, trade and balancing system Impacts on transmission and distribution networks, respectively Crude overview of negative (increasing system costs) impacts Identification and analysis of response options in generation, balancing/trade, networks and demand Response options in: generation, demand response and power trade Response options by: distribution and transmission system operators Reviews on relevance in several partner countries of these options Assessment of barriers (current system conditions) for implementation of these (market) response options on-going now Assessment of regulatory & policy measures/improvements to implement response options October08 till May09 4
Presentation of some results and findings regarding DSO & Demand side options Introduction of the background of increasing impacts by intermittent RES-E generation Overview of response options that would reduce the negative (system costs increasing) impacts Some conclusions Main sources: Response options for generation, trade and demand by Henrik Jacobsen, Risoe Response options for the DSO including DSM by Adriaan van der Welle, ECN 5
Drivers for DER (RES&DG) penetration Greenhouse gas emission reduction EU Kyoto target : -8% reduction in 2008-2012 compared to 1990 emissions CO2 emission reduction in 2020: -20% Renewable electricity 2010 target: 21% electricity demand in EU from renewable sources 2020 target: share of RES 30-50% in electricity and 20% in total primary energy supply Energy efficiency EU directive for Combined Heat and Power (CHP) EU Action Plan for Energy efficiency: 20% energy saving by 2020 compared to baseline Enhancing supply security/reducing fuel dependency Via Support Schemes in Member States 6
National RES targets 2020 EU source: Draft Directive EC (2008) United Kingdom Sweden Finland Slovak Slovenia Romania Portugal Poland Austria Netherlands Malta Hungary Luxembourg Lithuania Latvia Cyprus Italy France Spain Greece Ireland Estonia Germany Denmark Czech Republic Bulgaria Belgium 0% 10% 20% 30% 40% 50% Share 2005 Target 2020 7
Scenario of RES-E generation in the EU 27 Electricity generation [TWh/a] 1200 1000 800 600 400 200 Solar, tidal etc. Wind Geothermal heat Biomass & waste Hydro The largest part additional RES generation by offshore and onshore wind (9%) and biomass (9%) 0 2005 2010 2015 source: Dena 8
Electricity generation and installed capacities in the EU 27 for 2005 & 2015 Wind 24% Solar, etc 1% Wind contributes for largest part to the increase of RES. Biomass 10% Hydro 65% Geothermal 0,4% Wind 43% Solar, etc 1% Hydro 37% Onshore and offshore wind will become the dominant renewable energy source with a share of 43% of all installed RES capacities in 2015. Biomass 18% Geothermal 1% Source: Dena 9
Main negative impacts of large intermittent RES-E (wind, PV, micro-chp) supply More variable, less predictable and controllable supply of electricity, particularly impacting markets, network operation of transmission and distribution networks, i.e.: More price variation, higher balancing cost, lower capacity values, and lower revenues base load generators in markets More demand for flexible and better predictable generation More expensive network operation through voltage rise, increased fault levels and higher variability direction of power flows, i.e. more energy losses etc More demand for technical and economic options for improving network controllability, i.e. by more demand response 10
Lower spot market prices: results for 3 years 16 14 % lower spot price 12 10 8 6 4 2 Denmark West Denmark East Total 0 2004 2005 2006 Source: Risoe Poul Erik Morthorst 11
12 Impact on Spot Price: DK example 0 100 200 300 400 500 600 123456789 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 100 101 102 103 104 105 106 107 108 109 110 111 112 113 114 115 116 117 118 119 120 121 122 123 124 125 126 127 128 129 130 131 132 133 134 135 136 137 138 139 140 141 142 143 144 145 146 147 148 149 150 151 152 153 154 155 156 157 158 159 160 161 162 163 164 165 166 167 168 169 170 171 172 173 174 175 176 177 178 179 180 181 182 183 184 185 186 187 188 189 190 191 192 193 194 195 196 197 198 199 200 201 202 203 204 205 206 207 208 209 210 211 212 213 214 215 216 217 218 219 220 221 222 223 224 225 226 227 228 229 230 231 232 233 234 235 236 237 238 239 240 241 242 243 244 245 246 247 248 249 250 251 252 253 254 255 256 257 258 259 260 261 262 263 264 265 266 267 268 269 270 271 272 273 274 275 276 277 278 279 280 281 282 283 284 285 286 287 288 289 290 291 292 293 294 295 296 297 298 299 300 301 302 303 304 305 306 307 308 309 310 311 312 313 314 315 316 317 318 319 320 321 322 323 324 325 326 327 328 329 330 331 332 333 334 335 336 337 338 339 340 341 342 343 344 345 346 347 348 349 350 351 352 353 354 355 356 357 358 359 360 361 362 363 364 365 366 367 368 369 370 371 372 373 374 375 376 377 378 379 380 381 382 383 384 385 386 387 388 389 390 391 392 393 394 395 396 397 398 399 400 401 402 403 404 405 406 407 408 409 410 411 412 413 414 415 416 417 418 419 420 421 422 423 424 425 426 427 428 429 430 431 432 433 434 435 436 437 438 439 440 441 442 443 444 445 446 447 448 449 450 451 452 453 454 455 456 457 458 459 460 461 462 463 464 465 466 467 468 469 470 471 472 473 474 475 476 477 478 479 480 481 482 483 484 485 486 487 488 489 490 491 492 493 494 495 496 497 498 499 500 501 502 503 504 505 506 507 508 509 510 511 512 513 514 515 516 517 518 519 520 521 522 523 524 525 526 527 528 529 530 531 532 533 534 535 536 537 538 539 540 541 542 543 544 545 546 547 548 549 550 551 552 553 554 555 556 557 558 559 560 561 562 563 564 565 566 567 568 569 570 571 572 573 574 575 576 577 578 579 580 581 582 583 584 585 586 587 588 589 590 591 592 593 594 595 596 597 598 599 600 601 602 603 604 605 606 607 608 609 610 611 612 613 614 615 616 617 618 619 620 621 622 623 624 625 626 627 628 629 630 631 632 633 634 635 636 637 638 639 640 641 642 643 644 645 646 647 648 649 650 651 652 653 654 655 656 657 658 659 660 661 662 663 664 665 666 667 668 669 670 671 672 673 674 675 676 677 678 679 680 681 682 683 684 685 686 687 688 689 690 691 692 693 694 695 696 697 698 699 700 701 702 703 704 705 706 707 708 709 710 711 712 713 714 715 716 717 718 719 720 721 722 723 724 725 726 727 728 729 730 731 732 733 734 735 736 737 738 739 740 741 742 743 744 Hours in January '07 DKK/MWh 0 20 40 60 80 100 120 140 WindProduction/Power Consumption % Denmark-west price System price wind production Source: Poul Erik Morthorst, Risoe
Response options to increase network controllability Usual option of fit-and-forget way DSOs react to less predictable, more fluctuating and more diverse network load situations (upward flows) with a response network reinforcement. However, this way becomes an increasingly expensive way of network planning. Alternative options to increase network controllability of DSOs: Active network management Demand response Micro-grids Storage Flexible deployment of DG 13
Active network management Three phases of going to Active network management (ANM): 1. Real-time network control i.e. monitoring transformers 2. Real-time control of demand and generation 3. Local system balancing, i.e. by micro-grids see a next slide ANM means less investments in network reinforcement, but more in DSO activities such as communication, i.e. ICT tools and often higher energy losses Institutional and regulatory measures: DSOs need to be indifferent between network reinforcement and ANM to further efficient network planning: move to incentive regulation instead of rate-of-return regulation Promotion of network innovation Real-time and locational network pricing to steer network flows 14
Demand response options Shifting energy demand from peak to off-peak demand lowers peak demand and consequently demand for network services Problem now: low price-elasticity of demand (non-visibility of real-time energy use and associated costs) for small customers Implementation of smart metering is a precondition for more demand response System advantages: 1. Higher network capacity usage rate (higher overall system efficiency) 2. Less network interruptions (higher security of supply) But higher data management costs of real-time metering and pricing Institutional and regulatory changes: Introducing real-time, peak and day ahead pricing and further interruption contracts etc 15
Micro-grids Definition micro-grids: LV network operating independent from MV and HV networks Therefore: 1. higher security of supply in rural areas with a comparable amount of generation and load 2. lower costs than extension of network capacity by reinforcements Before implementation of local balancing and islanding earlier phases measures of ANM concept have to be implemented and black start has to be technically feasible Institutional and regulatory measures: especially real-time and locational pricing are necessary for better steering of network flows 16
Storage options Application of the storage option in cases of: Electricity at times the network is constrained Increase of network reliability (provision of reactive power, protection and isolation for system faults) network reinforcement can be postponed/avoided Required institutional and regulatory measures : Time and location dependent network tariffs to account for contribution of storage to resolve network constraints Adjustment of network planning practices and concomitant investment incentives to promote trade-off between use of storage in network operation and additional network reinforcement Allow introduction of independent storage facility for several purposes including network aims both for economies of scale of storage facilities and to overcome unbundling provisions 17
More flexible deployment of generation Congestion management: diminishes power flows in congested areas and prevent a change in flow directions saves network reinforcements System benefits: 1. Higher network usage capacity (higher efficiency) 2. Less network interruptions (higher security of supply) Required institutional and regulatory measures: - Density and location of entry point and specific network situation relevant for impact time and locational network pricing is required - Avoided costs network operator have to be passed on partially as remuneration to down regulated distributed generators. 18
Applicability of DSO & Demand response options (i) Criteria for feasibility in time: Feasibility in the short-term depends on: - technology is sufficiently proven - limited network investments needed - no change in the network operation philosophy necessary - no or limited regulatory adjustments required - limited participation of consumers in the solution required Feasibility in the longer-term depends on: Cost-efficient monitoring and control network devices are available ICT based communication systems to be able to deal with large amounts of data about network operation, generation and demand are put in place Modest to complex changes in network regulation, i.e. use of system and locational tariff system charging of generation and demand 19
Applicability of DSO & Demand response options(ii) ANM (real-time network control) ANM (real-time production and demand control) ANM (local balancing and micro-grids) More flexible deployment of DG Demand response Storage Short term Medium term Long term 20
Conclusions Contribution of intermittent RES-E & DG will increase substantially in EU countries in next decades Need for timely development & implementation of market-based technical and economic response options in EU MS RESPOND identified many options for system segments, generation, trade, load balancing, networks and demand side. Priority options for DSO&DSM: More monitoring and control of distribution network operation More monitoring and control of DG and demand options for: 1) More flexible deployment of DG at extreme peak supply of RES-E generators 2) Demand response by real-time pricing etc Further development/implementation of ANM concept for DSO Deployment of storage for DN and introduction of micro-grids will depend much more on specific system and network conditions per country/region i.e. less wide-scale possibilities and higher costs for longer-term NOTE: Precise values of different options and avoided costs closely depends on characteristics of national power & DN system: - DG characteristics (concentration and location) - network characteristics - national policy and regulation 21
Project partners & Contact Coordinator Frits van Oostvoorn Energy Research centre of the Netherlands (ECN), The Netherlands E-mail: oostvoorn@ecn.nl Telephone: +31 224 564438 Partners Universidad Pontificia Comillas, Spain Deutsche Energie-Agentur GmbH (dena), Germany Imperial College of Science, Technology and Medicine, United Kingdom Institut für Solare Energieversorgungstechnik e.v. (ISET), Germany Red Eléctrica de España S.A., Spain Forskningscenter Risø, Denmark Project website: www.respond-project.eu 22