System Integration of Renewables

Editor's Notes

• #5: Each VRE deployment phase can span a wide range of VRE share of generation; there is no single point at which a new phase is entered
• #8: H
• #10: recommendations for the individual steps IEA Task Force 25 § Input data § Portfolio set-up § Capacity value/Reliability § Flexibility/production cost simulations § (Load flow and dynamic stability – presented by Damian Flynn) § Analysing and interpreting results When studying small amounts of wind/PV power (share in energy <5-10 %), or short term studies, wind/PV power can be studied by adding wind/PV to an existing or foreseen system, with existing operational practices. 2. For larger shares and longer term studies, § changes in the assumed remaining system become increasingly necessary, and beneficial: expedient generation portfolio and network infrastructure development, taking into account potential sources of flexibility (also demand response) and technical capabilities of power plants (dynamic stability responses). § additional scenarios or operating practices should be studied. Market Structures/design to enable operational flexibility, should be assessed.
• #11: VRE output is not noticeable for system operator • VRE variability tends to be negligible compared to fluctuations in demand • Priority areas are connection requirements and first, simple grid codes (starting more elaborate definition) • At initial deployment, integration of VRE requires little additional effort Appropriate technical grid connection rules are critical to ensure that VRE plants do not have a negative impact on the local quality and reliability of electricity supply.
• #12: First instances of grid congestion • Incorporate VRE Forecast in scheduling & dispatch of other generators • Focus also on system friendly VRE deployment Updated system operations, sufficient visibility & control of VRE output becomes critical in Phase II
• #13: Trade-off with transmission planning and operational policies requires multiple studies • At higher wind / PV shares, stability issues take precedence over UC / flexibility / market issues / … • Accurate assessment requires validated wind turbine / PV models + proposal of control strategies – Verification of conventional generation capabilities + load models • Relative importance of voltage / transient / smallsignal / frequency stability issues system dependent – Network topology, underlying plant portfolio including renewables, e.g. solar, wind turbine types + location, grid code requirements – Studies should evolve from ”what are my problems?” to ”how can I take advantage of my new control options?”
• #16: The European target model shall ensure the completion of the EU Internal Energy Market for electricity. Guidance and standards for each timeframe: Day Ahead (DA), Intra-Day (ID), Balancing and Forward Market. A fair and transparent day-ahead power price is an key factor for the models success. Price Coupling of Regions (PCR) The initiative of 7 Power Exchanges to develop a single price coupling solution, launched Feb 2014 EUPHEMIA algorithm Multi-Regional Coupling (MRC) Coupling of regions and efficient management of available transmission capacities between areas and countries Implicit capacity allocation Cross Border Intraday Trading (XBID) The integrated European electricity market is expected to increase liquidity, efficiency, social welfare and transparency of prices and flows.
• #17: High Capital Intensiveness: Low Variable and High Capital Costs for networks, Moderate to high capital costs for Generation Long lead times of project development and long life time of assets Very limited Storage to manage fluctuating demand – So Demand must meet Supply instantaneously The commodity is injected into and retrieved from the network, quantities are measured but cannot be traced and does not flow over the “contractual path” High social and economic costs of demand curtailment or supply failure It propagates with the speed of light, therefore requirement for Automatic Control and Real-Time Operational responsibility The system operates as an “integrated machine”, actions of anyone may have consequences for others
• #19: Competitive power markets are commonly organized around one or more auctions. Particularly, a market maker receives bids from generators and demand estimates or bids from power retailers and/or end-users, from which he/she calculates an optimal dispatch schedule – i.e. the production rule that minimizes the cost of meeting demand, subject to the technical and physical constraints imposed by the grid. Moreover, the price and dispatch schedule found constitutes a reference for other products, such as bilateral contracts, term products, financial contracts, physical options, and the like (Léautier, 2001). In order to enhance market transparency, typically a daily price index is published.
• #21: Balance between demand and supply must be kept Trade positions can differ from real-time positions for all kinds of reasons Open positions Forecasting errors Unplanned generation outages Self-dispatch imperfections A balancing mechanism is required that handles any deviations between trade positions and real-time positions of all market parties A balancing mechanism requires that imbalances can be allocated to and settled with accountable parties For this reason, balance responsibility is a necessary obligation on each market party
• #22: Day-Ahead and Intraday markets complement one another: ‒ Day-Ahead: blind auction process liquidity optimisation ‒ Intraday: continuous trading, closer to real-time flexibility tool
• #26: Market coupling enables an efficient use of the transmission grid through strong interactions between local markets and an efficient European wide price formation A single price coupling algorithm will calculate clearing prices, net positions for all bidding zones and cleared orders This can deliver one single price across the connected bidding zones… but prices will differ in case of congestion…
• #27: Enables coupling of multiple areas together with efficient allowance for loop flows on meshed networks Supports block bids and other local market requirements Supports bilateral contracts and netting of counterflows Requires only limited harmonization of market rules, and no change to local notification/imbalance arrangements Provides open and fair market access with no additional barriers beyond existing local PX requirements Transparent, rule based, auditable methodology Market coupling is a way to integrate power markets in different physical areas while requiring minimal changes to the local arrangements. Under TLC the three power exchanges continue to exist as separate legal entities with their own trading platform, contracts and clearing. The markets are nonetheless brought together by using the available transmission capacity to create a single regional market most of the time. The transmission capacity is used in an optimal way, enabling the best bids and offers to be matched from across the region. One-step process, ease of accessPriority on interconnectors based on price - Interconnector schedules based on area price difference  Hedging instruments - All local players also play internationally - Encourages liquidity and transparency ……thereby mitigating market power abuse
• #28: WHAT is PCR? Price Coupling of Regions (PCR) is the initiative of seven European Power Exchanges to harmonize the European electricity markets HOW is this done? By developing a single price coupling algorithm (Euphemia). It will be used to calculate electricity prices across Europe.
• #29: Key energy and climate achievements towards 2020 Climate and Energy Policy framework for period 2020-2030 Climate and Energy Policy framework towards 2050
• #30: EU: installation of about 44% of the world's renewable electricity (excluding hydro) at the end of 2012; Reduction of EU economy intensity by 24% between 1995 and 2011 whilst the improvement by industry was about 30%; Decrease of carbon intensity of the EU economy by 28% between 1995 and 2010.
• #31: The Roadmap to 2050: Reduce of emissions to 80% below 1990 levels through domestic reductions on EU level Milestones: reductions of the order of 40% by 2030 and 60% by 2040. Energy efficiency: usage of 30% less energy in 2050 than in 2005. On average, savings of € 175-320 billion annually in fuel costs over the next 40 years in the EU. Most cost-effectively transition to a low-carbon economy for main sectors responsible for Europe's emissions (power generation, industry, transport, buildings and construction, as well as agriculture).
• #33: By 2014 European Union countries had invested approximately €1 trillion, €1000,000,000,000, in large scale Renewable Energy installations. Fixed Feed-in Tariffs stimulate mass take up This has provided a nameplate electrical generating capacity of about 216 Gigawatts, nominally about ~22% of the total European generation needs of about 1000 Gigawatts. The actual measured output by 2014 from data supplied by the Renewables Industry has been 38 Gigawatts or 3.8% of Europe’s electricity requirement, at a capacity factor of ~18% overall. Accounting for capacity factors the capital cost of these Renewable Energy installations has been about €29billion / Gigawatt.  That capital cost should be compared with conventional gas-fired electricity generation costing about €1billion / Gigawatt.
• #35: However The value of Security of Supply and adequacy are not reflected in market signals No focus on long term investments for adequacy Conflicting or overlapping political targets, and public interventions often not aligned Fast and massive evolution of the energy mix challenges the technical resilience of the pan-European power system Uncertainty of regulatory framework, market design and of price signals lead to low investments
• #37: 8 GW/h on an average residual load of 37 GW. It is the extent of these ramps as well as the rate and frequency with which they occur that is the balancing challenge