Transcript
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AGENDA
• Definitions, scope & approach• Challenges & context• Frame-conditions – integration measures• Case studies• Conclusions & recommendations
Integrating Variable Renewable Energy
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SCOPE & AIMS
• To assess the relative applicability and effectiveness of measures to integrate variable renewable energy
• Based on actual interventions to date across 9 jurisdictions• Drawing out lessons for policy makers
Integrating Variable Renewable Energy
Ontario
CAISO
Alberta
ERCOT
Ireland
Great Britain
Spain
Denmark
GermanyHokkaido
AlbertaOntario
The focus of the study has been on measures that can be applied in market based jurisdictions
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KEY DEFINITIONS
• Variable Renewable Energy (VRE)• Renewables technologies that rely on fluctuations in short-term availability of resource,
includes: Wind, Solar, Tidal, Hydro run-of-river and Wave
• Flexibility• Ability of generator, load, or storage to vary power output or demand in a controlled
manner
• VRE Integration• Incorporation of VRE into a power system
Integrating Variable Renewable Energy
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CHALLENGES FOR POLICY MAKERS – new policies will need to be implemented
1. Ensuring VRE deployment is system friendly, where possible.
2. Making the most of the current installed flexibility.
3. Encouraging investment in the required amount of flexibility.
4. Making the most of scarce grid resources.
Integrating Variable Renewable Energy
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High wind and solar
High wind
Mid VRE penetration
Low VRE penetration
Strongly interconnected
Weakly interconnected
Synchronously Independent
High flexibility
Low flexibility
Well distributed
Mostly distributed
High concentration in few areas
Mostly in one area
Mid flexibility
High wind and solar
High wind
Mid VRE penetration
Low VRE penetration
Strongly interconnected
Weakly interconnected
Synchronously Independent
High flexibility
Low flexibility
Well distributed
Mostly distributed
High concentration in few areas
Mostly in one area
Mid flexibility
High wind and solar
High wind
Mid VRE penetration
Low VRE penetration
Strongly interconnected
Weakly interconnected
Synchronously Independent
High flexibility
Low flexibility
Well distributed
Mostly distributed
High concentration in few areas
Mostly in one area
Mid flexibility
Integrating Variable Renewable Energy
CONTEXT – jurisdictions have different challenges and opportunities depending on their context
Source: Mott MacDonald and system operators
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$
Dispatch & market sophistication Grid code Grid representation VRE incentives
Interconnector management
Regulator incentives System services Use of forecasting
* The broad suit of regulations, market design and rules, operational codes and practices
Integrating Variable Renewable Energy
FRAME CONDITIONS* - measures for integrating VRE
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Dispatch sophistication and maturity
VRE incentives and dispatch
Use of forecasting
System services market
Grid representation
Interconnector management
Regulator incentives on SO
Grid code
012345
Start year Now
Dispatch sophistication and maturity
VRE incentives and dispatch
Use of forecasting
System services market
Grid representation
Interconnector management
Regulator incentives on SO
Grid code
012345
Start year Now
Integrating Variable Renewable Energy
UK Germany
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..FiT, premium, tender or market
..imbalance risk
..curtailment compensation
..require dispatch in market
Increasing exposure to energy market can shape portfolio, distribution and operation
Integrating Variable Renewable Energy
VRE INCENTIVES
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OPERATING
APPROVED
PLANNED
Integrating Variable Renewable Energy
In Alberta wind gets market price only
Developers moving north, where wind regime allows better match to demand (and prices)
Source: Environment Canada, Alberta Environment and the US Climate Data Centre (left hand map); Albert Energy and Mott MacDonald (right hand map); EDC Associates
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..long term agreements
..explicit auctions
..market coupling
..balancing and reserve coordination
Increasing exposure to energy market can shape portfolio, distribution and operation
Integrating Variable Renewable Energy
INTERCONNECTOR MANAGEMENT
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Integrating Variable Renewable Energy
PROCESS OF MARKET COUPLING IN EUROPE
Source: European Market Coupling Company
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..Four TSOs in Germany
..in 2007 begun collaborating on reserves..extended internationally in 2011
Collaboration results in reduced reserve requirement and cost
Integrating Variable Renewable Energy
Grid control cooperation agreements in Germany
Source: GE Energy
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..include demand & storage
..allow VRE to participate
..improve sophistication of markets
..develop new products (inertia, ramping etc.)..[capacity market]
Sophisticated system services market & products reward flexibility
Integrating Variable Renewable Energy
SYSTEM SERVICES
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Reform will create new products in the system service market for System Inertial Response (SIR) and Primary Frequency Response (PFR)
Reforms will provide incentives for increased flexibility and allow for greater penetration of VRE
Integrating Variable Renewable Energy
ERCOT and Ireland plan system service reform
Source: ERCOT and Mott MacDonald
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• Significant capacity is CHP • Interconnection high, almost 100% of peak
demand• Wind at 79% of peak demand
Dis-patch-
able
Variable
0% 50% 100% 150% 200% 250% 300% 350% 400%
Wind Solar Hydro Nuclear Geothermal Biomass & waste
Interconnection
Capacity as percent of peak demand (6.1 GW)
Integrating Variable Renewable Energy
DENMARK – context
Source: Energinet.DK and Mott MacDonald
Source: Energinet.DK
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Nordel grid code – Wind generators on the high voltage network required to disconnect during abnormal voltage or frequency
CHP in the market – CHP operators required to compete in the spot market.
Nordel grid code – Wind required to provide fault-ride through, and introduction of compensation for curtailment.
1999
2004
2008
VRE in regulating market – Wind introduced into the regulating market (ancillary services).
2014
Energinet formed – out of merger between ELTRA and ELKRAFT.
2007
Market Coupling – Danish and German electricity markets coupled.
2009Negative pricing – Negative pricing first allowed in the market, occurring for between 20 and 100 hours a year.
NOIS – Nordel Operational Information System, based at Energinet, monitors interconnection and usable operating reserve over the Nordic system.
Internal grid strengthening – Great belt DC link between East and West Denmark, providing additional management options for wind power in the west.
Market Coupling – Danish market coupled with Central Western Europe markets.
2012
2010
$Dispatch sophistication
System services market
Regulator incentives on SO
Grid representation
Use of forecasting
Interconnector management and market integration
Grid code
VRE incentives and dispatch
Nordel coupling – Denmark joins Nordpooland price quotation implemented
Dispatch sophistication and maturity
VRE incentives and dispatch
Use of forecasting
System services market
Grid representation
Interconnector management
Regulator incentives on SO
Grid code
012345
Start year Now
Integrating Variable Renewable Energy
DENMARK – measures
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• Vertically integrated• Flexible capacity, but interconnection is
relatively low• Capacity well distributed
Dis-patch-
able
Variable
0% 20% 40% 60% 80% 100% 120% 140% 160% 180%
Ghost Wind Solar Gas Hydro Coal Nuclear Oil
Geothermal Other Interconnection
Capacity as percent of peak demand (5.7 GW)
Integrating Variable Renewable Energy
HOKKAIDO – context
Source: HEPCO and Mott MacDonald
Source: HEPCO
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JEPX – Japanese Electricity Power Exchanges first established, creating a platform for spot and forward trading.
Electric Power System Council of Japan –Created as an independent body to support transmission and distribution operations.
VRE incentives – Feed in Tariff introduced.
2003
2004
2009
2012
Intraday trading – Intraday trading introduced.
Grid code – Fault ride through required for grid connected solar and wind generation sources.
$Dispatch sophistication
System services market
Regulator incentives on SO
Grid representation
Use of forecasting
Interconnector management and market integration
Grid code
VRE incentives and dispatch
Hokkaido is has a vertically integrated utility (HEPCO). This is a fundamentally different regulatory regime, for which our assessment is not applicable
Integrating Variable Renewable Energy
HOKKAIDO - measures
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Integrating Variable Renewable Energy
D
Weakly connected
High internalflexibility
Well interconnected
Low internalflexibility
Easy
ChallengingWill need to consider all measures
Implement easy measures including interconnector access
Long termPossibility
Polic
y ai
m
Polic
y ai
m
CONTEXT DEFINES CHALLENGE AND CONSTRAINS APPLICABILITY OF MEASURES
Source: Mott MacDonald
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CONCLUSIONS (1/3)
..Interconnected countries can pool flexible resource by coupling markets and cooperating on reserve/balancing
..Isolated countries need to make the most of internal flexibility
..countries with low interconnection and internal flexibility have the greatest challenge
Integrating Variable Renewable Energy
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CONCLUSIONS (2/3)
..dispatch sophistication can be improved, in combination with forecasting, to make the most of internal flexibility
..exposing VRE to the market encourages system friendly deployment
..moving to zonal of LMP makes the most of grid resource and provides locational investment signals
Integrating Variable Renewable Energy
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CONCLUSIONS (3/3)
..grid code requirements for VRE are continuously developing; high wind ride through and synthetic inertia could be required in the future
..system service products are being developed to incentivise inertia, fast frequency response and ramping capabilities
Integrating Variable Renewable Energy
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KEY RECOMMENDATIONS
• Consider deployment patterns early• Build-in grid code measures sooner rather than later.• Move to near real time re-dispatch supported by sophisticated forecasts• Learn from others but do one’s own studies to assess impacts• Co-operate with other jurisdictions• Market developments, including system service reform, for enhanced flexibility
Integrating Variable Renewable Energy
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IB contact: Andrew Conway, andrew.conway@mottmac.com
IB contact: Guy Doyle, guy.doyle@mottmac.com
Michael PaunescuMichael.Paunescu@NRCan-
RNCan.gc.ca
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CASE STUDIES INSTALLED VRE – covering a wide range of penetration level and mix of technologies
Ger
man
y
Denm
ark
Spai
n
Isla
nd o
f Ire
land GB
ERCO
T
Hokk
aido
Calif
orni
a
Albe
rta
Ont
ario
0%10%20%30%40%50%60%70%80%90%
100%
Solar Wind
Inst
alle
d VR
E ca
paci
ty a
s pe
rcen
tage
of
peak
dem
and
Integrating Variable Renewable Energy
Source: Mott MacDonald and system operators, 2014
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Denm
ark*
Calif
orni
a
Ont
ario
Germ
any
Spai
n
Islan
d of
Irel
and
Hokk
aido
Albe
rta
GB
ERCO
T
0%10%20%30%40%50%60%70%80%90%
100%
Synchronously independent Synchronously connected
Inte
rcon
nect
ion
as p
erce
ntag
e of
pea
k de
man
d
Integrating Variable Renewable Energy
CASE STUDIES INTERCONNCETION - a wide range of levels and type of interconnection
Source: Mott MacDonald and system operators, 2014
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Spai
n
Denm
ark*
Calif
orni
a
Ger
man
y
Hokk
aido GB
Isla
nd o
f Ir..
.
Albe
rta
Ont
ario
ERCO
T
0%
20%
40%
60%
80%
100%
120%
140%
160%
180%OtherStorageNuclearCoalHydroOilGas
Inst
alle
d di
spat
chab
le c
apac
ity a
s a
per-
cent
age
of p
eak
dem
and
Integrating Variable Renewable Energy
CASE STUDIES FLEXIBLE CAPACITY - Covering a wide range of conventional capacity mix
Source: Mott MacDonald and system operators, 2014, showing net capacity
For additional information on RETD
Online: www.iea-retd.orgContact: kristian.petrick@iea-retd.org
info@iea-retd.org
THANK YOU!
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