Overview 1. The cutting edge 2. Getting the infrastructure right 3. Evolved system operation 4. Opening up the power market 5. Integration economics
Germany Share of wind in 2011: 6% Share of solar PV: 2% Instantaneous share of wind and PV in Germany Date & time 50Hertz Amprion EnBW TNG TenneT 01/01/1 1 06:00 07/09/1 1 14:00 25/04/11 13:00 08/05/1 1 13:00 Germany 08/05/11 13:00 Wind 6 383 2 404 54 5 034 8 070 PV 0 1 517 1 793 5 987 12 627 Load (MW) 5 145 11 082 4 617 6 876 34 435 Max ratio 124% 35% 40% 160% 60%
Denmark On average: 29% of electricity in 2011 22% in 2010 Western Denmark On average: 30% of electricity Maximum instantaneous share: > 100% Interconnections amount to around 80% of peak power demand DK targets 50% of electricity production in 2020
Spain More than 800 wind farms Highest monthly wind share: 21% (March 2011) Maximum wind instantaneous share of electricity: 59.6% (November 6, 2011) Spain is an isolated system Electricity in 2012 (to August) Source: Red Eléctrica de España
El Hierro: microgrid 100% independent 100% RE (wind, pumped hydro, solar) 6
Overview 1. The cutting edge 2. Getting the infrastructure right 3. Evolved system operation 4. Opening up the power market 5. Integration economics
Grid planning at continental scale EU: 10 year Network Development Plan of all European system operators Advance warning of bottle necks
European transmission drivers Source: ENTSOE 2012: 10 year network development plan 2012
European grid growth to 2016 Source: ENTSOE 2012: 10 year network development plan 2012
European grid growth from 2017 Source: ENTSOE 2012: 10 year network development plan 2012
Germany transmission planning 2009 Power Grid Expansion Act HV electricity highways to manage congestion DE: 2010 Energy Concept: system-wide planning Wind no longer in isolation Conventional and renewable plants Extension, reinforcement Additional flexibility 2011 Grid Expansion Acceleration Law Reduced delays in planning and permitting From 10 years at present to max 4 years Federal Plan for Transmission Networks Informed by EU-wide Ten Year plan
Texas CREZ Which comes first: wind plant or transmission? Objective: to move 18.5 GW of wind power from West Texas and the Panhandle to metropolitan areas Source: PUCT 2012
Mexico consolidation Baja California s 2 grids are isolated from the the SEN The north is connected to WECC CFE plans to interconnect by 2015 And to increase trade with USA?
Public support for transmission German population environmentally aware, relatively wealthy But who really wants new transmission pylons? Public support campaign in Energy Concept To Build understanding that more VRE = more grid. New website launched by TSOs Range of new-build scenarios Presentation of first grid development plan in June Compensation for new-build hosts? 10 year delays not uncommon in Europe
Innovative transmission technology Flexible line management based on line temperature monitoring Coincidence of need for carrying capacity and wind output High temperature aluminium conductors More capacity on the same pylon size Cables instead of overhead lines Danish Cable Action Plan 2009 Undergrounding of entire 132kV 150kV grid by 2030 All new 400 kv (highest voltage) lines Probably all distribution network too
Overview The cutting edge Getting the infrastructure right Evolved system operation Opening up the power market Integration economics
Spain: CECRE Real time monitoring of every grid-connected wind and solar PV power plant in the country
Denmark: System operator Single grid entity Merger of ELTRA and ELKRAFT East and west recently connected 100% state-owned Controlled by Ministry of Climate and Energy Key driver towards government target of 50% wind by 2020 No conflict of interest Extension / reinforcement delays minimal Energinet has responsibility for market operation (with other Nordic TSOs) Can develop market to reflect needs of VRE Can address congestion signaled by the market
Germany: Supportive RE Distribution (low voltage) grids are usually not actively managed But more and more plant is installed at this level DE 2011: remote curtailment ceiling lowered from 100 kw to 30 kw mainly due to PV proliferation From village orphan to pillar of the community New German wind and PV plants are required to support the grid; Incentives to refurbish older plants too In Denmark since 1999 on HV grid
Supportive RE Offshore wind farms in Denmark may have to curtail in a number of ways If given advance notice, they will not be compensated Source: EWEA 2005
Flexible resources German fund encourages new-build fossil plants to use most flexible available technology New generation of super flexible gas plants GE Siemens, Alstom To be more complementary with VRE output CHP plants Larger heat storage to decouple heat and power production Electric heaters can take advantage of surplus cheap electricity Danish tax on electricity use in CHP reduced in 2008
Denmark smarter network All new meters after 2015 to be smart For enhanced demand side response EcoGrid EU Project Bornholm Island: 50% RE Active management of distribution system Demand side response Electric vehicles
Overview The cutting edge Getting the infrastructure right Evolved system operation Opening up the power market Integration economics
The mechanics of trading electricity Electricity is a commodity, much like any other But it is difficult to store: as soon as it is produced it must be consumed A lot of wind capacity in one place can lead to unmanageable surplus, or lulls (deficit) Surpluses need to be pushed elsewhere, and deficits supplied from elsewhere I.E.: TRADE! But interconnections between historically separate markets are bottlenecks They need to be carefully managed, and expanded New interconnectors need to be built
Balancing through trade Interconnection turns surplus into income Enables aggregation (smoothing) of output over the connected area E.G.: Planned Denmark Netherlands COBRAcable Netherlands As weather front moves south, flow is reversed
European market couplings Nordic market splitting NO Central and West European Market Coupling DE SE Interim Tight Volume Market Coupling FR
Managing the trade bottlenecks Old approach: trade required subsequent, explicit auction of transmission capacity To transport it from producer to buyer Many separate transactions: slow New: system operators collaborate to manage crossborder transfers as a whole Cheap (e.g. wind) electricity flows more easily to higher price areas This appear to be easier in an open market (pool / exchange), where there is greater liquidity, rather than in OTC markets Transmission capacity implicit in spot market price
Flexible power market EPEX (FR,DE,AT,CH): 33% of European power 25% of German power Intra-day trading grew 500% in the three years to 2010. Needs resulting from wind forecast uncertainty to be traded on the intra-day since 2011 Gate closure times reduced to 45 minutes ahead in both day ahead and intra-day markets Balancing market (after EPEX closes) Now all tenders disclosed through online platform Secondary reserves common across all 4 areas
Flexible power market 2 75% of Scandinavian electricity traded through Nord Pool (45% in 2006) Day ahead and intra-day Negative prices (20 100 hours pa) Permitted since 2009, replacing floor at zero Producers reduce or pay to generate Large consumer incentive to consume accordingly Nordic Operational Information System (Outside Nord Pool market) Immediately needed flexibility (up to 15 minutes ahead) can be traded over the whole Nordic area Offers are managed by the TSOs
Overview The cutting edge Getting the infrastructure right Evolved system operation Opening up the power market Integration economics
Balancing costs Differences: conventional portfolio, geospread, interconnection, storage, market design, system operation
The impact of long distance
Chinese costs without transmission The gradient of the curve reflects where the cheapest wind is
and with transmission The gradient of the curve reflects where the cheapest wind is
In summary Variability is not stopping deployment There may be a massive grid building / renewal task But transmission of RE should not be viewed in isolation Governments can reduce investment risk by leading with the grid Long distance transmission has a major impact on cost An able system operator is a priceless ally Wind and solar can help support the grid The search for additional flexibility is on Open markets enable optimal use of variable and flexible power plants Balancing costs are more modest than expected
Seminar follow-up: Hugo Chandler Hugo@NewResourcePartners.com London +44 207 287 1288