Large-scale Integration of Wind Energy into Power Systems

Large-scale Integration of Wind Energy into Power Systems

Paul Wilczek – EWEA Senior Regulatory Affairs Advisor – Grids and Internal Electricity Market Budapest, 5 July 2011

Presentation outline• EU and EWEA targets for Hungary and the EU up to 2020 and 2030

•Operating power systems with high shares of wind power

• Guiding principles for a EU Regulatory Framework for RES integration:

• RES Directive

• 3rd Liberalisation Package

• Conclusion

Wind energy according to NREAPs:• 495 TWh• 14% electricity consumption

EU RES targets

RES directive (2009/28/EC)

- 20% RES in EU gross final consumption (Heating and cooling / Transport / Electricity)

- Legally binding national targets- National Renewable Energy Action

Plans

EWEA targets in the EU up to 2020 and 2030Hungary NREAP target for 2020

750 MW of installed wind power capacity or 3,1% of electricity consumption

Very low penetration level in comparison with EU average

EWEA Target for 2030:

400 GW, of which 150 GW is offshore. 1150TWh, 26.2-34.3% of EU electricity demand

Beside the fact that wind power delivers CO2 free power based on undepletable source at low marginal costs …

• Wind power plants do not behave identically to traditional power plants

– Variety of electrical conversion systems – mostly with inverters

– Advances in technology give power plant characteristics to modern wind farms (e.g. active power control, voltage control, fault-ride-through)

• Wind plants location is driven by resource, zoning, incentives…

– needs for network extension - for example in remote areas

– needs for reinforcement in areas with concentrated wind capacity

• Due to resource (wind), wind power plants are VARIABLE OUTPUT generation

– Need for changes in power system balancing – Geographical aggregation reduces the variability– Operating wind plants with forecast tools enhances the

predictability of wind power production

Operating power systems with high shares of wind power

• Meteo systems– dimensions of

1000 kilometres

• Regional decorrelation

• Utilization of transcontinental decorrelation requires

– infrastructures – markets

Europe

L

H Courtesy of Andrew Garrad

Integrating a continental resource requires a European approach

Smoothing effect when aggregating over large areas

December 2000 wind speeds, 2030 MW amounts

0 %

10 %

20 %

30 %

40 %

50 %

60 %

70 %

80 %

90 %

100 %

1 169 337 505 673

Netherlands 7000 MW

Powe

r as %

of i

nsta

lled

wind

pow

er

December 2000 wind speeds, 2030 MW amounts

0 %

10 %

20 %

30 %

40 %

50 %

60 %

70 %

80 %

90 %

100 %

1 169 337 505 673

Netherlands 7000 MWBeNeLux+Fra+Ger 111 500 MW

Smoothing effect when aggregating over large areas

Powe

r as %

of i

nsta

lled

wind

pow

er

December 2000 wind speeds, 2030 MW amounts

0 %

10 %

20 %

30 %

40 %

50 %

60 %

70 %

80 %

90 %

100 %

1 169 337 505 673

Netherlands 7000 MWBeNeLux+Fra+Ger 111 500 MWUCTE 226 000 MW

Smoothing effect when aggregating over large areas

Powe

r as %

of i

nsta

lled

wind

pow

er

Sophisticated capabilities facilitating integration of wind power plants into power systems include

– Active power capability – frequency response and ramp rate control

– Voltage control and reactive power capability– Fault ride through capability – with injection of

active and reactive power during network faults– Coordinated wind plant operation (VPP)

Wind power penetration level is one of the decisive parameters for integration challenges

Operating a power system with high shares of wind power – The example of Denmark

System flexibility and how well the power system is interconnected are decisive parameters for integration challenges

This graph shows a penetration level of 20% wind power already in 2000 - The government aim is to move to 50% by 2025!

• Wind power fits well in power systems but requires additional ‘integration efforts’, depending on:

– Wind power penetration level– Flexibility of the power system in question

• Generation (up and down regulation capability)• Demand management and storage• Network + interconnection (available X-border

capacity)• Power market characteristics (e.g. for balancing

services): time, geographical area• Flexibility varies widely in EU• Integration efforts (e.g. moving to more

flexibility) can be implemented by suitable market design

• Limit to wind power penetration level is not technical!

Power system integration needs start only with increasing penetration levels

Guiding principles for a EU Regulatory Framework for RES

1. RES Directive – Binding RES targets for 2020– Guaranteed transmission and distribution of

electricity produced from RES– An appropriate grid infrastructure should be

ensured

2. 3rd Liberalisation Package– Newly established bodies ENTSO-E and ACER– Binding cross border rules: Network Codes– A first Pan-European Grid Plan: The ENTSO-E 10-

Year Network Development PlanThese two legislative packages should be the guiding principle

for stakeholders when considering any policy options.

Rationale for network arrangements in the RES directive

• In the absence of effective competition, priority access and dispatch is necessary.

• Member States shall ensure that appropriate grid and market-related operational measures are taken to minimise the curtailment of electricity produced from RES

Priority grid access should not be seen as positive discrimination, but as compensation given there is no functioning internal energy market.

Market design and the integration of wind power

• A cost-effective deployment of wind power, and the integration of European electricity markets are fundamentally linked.

• The market’s gate-closure time closer to real-time would have a dramatic impact on forecast accuracy and the cost of balancing the system as proven by various power system studies.

EU-wide deployment of intra-day market trading withimplicit auctioning and gate closure times as close to real time as possible is crucial.

Market design and the integration of wind power (II)

• The functioning and liquidity of wholesale markets and cross-border interconnectivity together with the forecast horizon influences to what extent wind farm operators can be at all in balance.

• The application of state-of-the-art forecast tools together with larger balancing areas is the key!

In regimes where balancing costs must be borne by the wind farm operator, regulators should ensure that these costs are transparent and represent only the real cost of balancing.

Why are functioning power markets crucial for the integration of wind energy?

The concern of the TSO:

Consequences of an additional 3000 MW on the Danish power system

Optimal utilisation of both, domestic flexibility and international electricity markets is a prerequisite to maintain security of supply and maximise the value of wind power.

Source: Energinet.dk

Outline of the 3rd Liberalisation Package

Two main dimensions of the adopted 3rd Package:

1. Institutional elements2. Cross-border elements

• 3rd Package text outlines institutions and regulatory tools such as Framework Guidelines and Network Codes

• Debate now needs to move on to the obstacles to achieving a single European market - which policy options can be taken when implementing the 3rd Package

1. Institutional dimensionThe 3rd Package provides for the creation of two new European bodies:• ENTSO-E (European Network of TSOs for

Electricity): fully operational already since July 2009, representing 42 TSOs from 34 countriesPurpose:

• To develop network codes: binding rules for TSOs and grid users

• Pan-European 10-Year Network Development Plan

• ACER (Agency for the Cooperation of Energy Regulators): EU-funded Community Body, operational since 3 March 2011Purpose:

• To provide a framework for the cooperation of NRAs

• To complement NRA actions at EU level

2. Cross-border DimensionThe development of EU network codes:

Req

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ts a

nd

oper

atin

al p

roce

dure

s co

de

System Operation Framework Guideline

Electricity Regulation EC/714/2009

European Electricity Rules

Agency Regulation EC/713/2009Electricity directive 2009/72/EC

Balancing Framework Guideline

Connection Framework Guideline

Capacity allocation and congestion

management Framework Guideline

European Tariff Framework Guideline

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Market Rules Investment and tariff rulesTechnical and Operational rules

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Cross-border Dimension – Binding rules through Network Codes

Ongoing « Pilot Projects » and key deliverables for the power sector

1. Network Code for grid connection requirements: A common ENTSO-E and Regulators initiative.Testing the process of framework guidelines and code drafting – public consultation this autumn

2. 10 Year Network Development plan (TYNDP): An important new task given to TSOs and ENTSO-E by the 3rd Package. Not only a compilation of national grid development plans – an overall grid development strategy for Europe shall be applied as well.

To conclude: How do we achieve a high penetration of RES? Lessons learned up to now…

RES penetration, %Sy

stem

cos

t

Impediments

Success factors

Impediments:•Lack of transmission•Lack of TSO cooperation•Inflexibility due to market rules and contracts•Unobservable RES – behind the fence•Inflexible operation strategies during light load and high risk periods

System cost:•Unserved energy•Higher fuel costs•Higher emission costs •Higher O&M costs

Success factors:•Forecasting•Thermal fleet:

• More quick starts• Deeper turn down• Faster ramps

•More spatial diversity•RES + DG + DSM•Grid-friendly RES

What’s the « limit » is never quite the right question!

Thank you

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