also further plans with the NL and UK. ⢠Coal plant optimized for steep ramp-up gradients, shorter start-up, and low & stable minimum generation. â Only 2.3 GW ...
Power Sector Transformation Integration of Wind and Gas
Dolf Gielen
Director Innovation and Technology IRENA Rotterdam, 15 June 2016
Towards a carbon-free energy system
#REma p
1.5-2.0 oC
The range in projections shows a large uncertainty in how much renewables could grow until 2050, but also highlights the opportunities with deployment in the timeframe
#REma p
Global growth in selected technologies REmap Options
2014
2014-2030 growth
2030 potential 1 760 GW 1 990 GW 160
10 X
5X
200 X 4X
500
3X
3 234 million m2
6X
Europe is leading on offshore wind First project under construction
11.2 GW capacity operating 1.6% electricity generation 6.9% RE electricity generation
1.2 GW capacity operating 0.1% electricity generation
CH: 5 operating wind farms UK: 25 operating wind farms DE: 13 DK: 7 BE: 5 NL: 2 SE: 2
Main driver for industry to implement offshore wind energy projects has been government financial support More than 90 institutions: RD&D, government and financing (FR, SP, US, PO, NO, KO, SA)
Offshore wind historic Halving of cost in coming 15 years financing cost can reduce trends and cost outlook Reduced prices below 10 cents/kWh Source: BVG Associates
Source: BVG Associates
0
LCOE ($/MWh) 50 100 150 200 250 300
Start
0 2015 Development
Turbine
Development
Foundations
Turbine
Electrical interconnection
Foundations
Installation
Electrical interconnection
OMS Other
Installation
2030
OMS
Development
Other
Turbine
End
LCOE ($/MWh) 50 100 150 200 250
Foundations Electrical interconnection Installation OMS Other
LCOE reduction of projects commissioned in 2001 through 2015 (7.5% WACC)
2045
LCOE reduction potential for 2030 and 2045 (7.5% WACC)
Projected rollout of onshore and offshore wind in NW Europe
2030 potential
2030 potential
Offshore wind’s journey to 2045 Europe
200
Source: BVG Associates
15
150
10
100
5
50
0
0 2015
2020
2025 2030 2035 Year of commissioning
Operating capacity band
Annual install
2040
2045
Operating capacity
Operating capacity (GW)
Annual installed capacity (GW)
20
Germany, 8 May 2016 A glimpse of the future
Coal, gas, nuclear supply
Renewables supply
Net export – “must run”
Day ahead spot prices EPEX very low spot prices, gas cannot operate profitably in today’s market
Source: www.epexspot.com
The case of Denmark Interconnectors, sector coupling & flexible coal – no urgent need for gas? • Synchronized with Nordic and European power systems • 42% wind power in 2015 (even 55% in the West part) • A lot of flexibility – 13.6 GW generation capacity, 6 GW peak demand, 6.4 GW interconnection capacity, 5 GW wind – Interconnectors with Norway (1 GW), Sweden (2.74 GW + Bornholm, 60 MW), Germany (2.38 GW) & Great Belt (600 MW) and also further plans with the NL and UK
• Coal plant optimized for steep ramp-up gradients, shorter start-up, and low & stable minimum generation – Only 2.3 GW gas generation capacity
• Sector coupling – Integration with heat sector (district heating) – Large heat pump market (about 25k units/yr sales, 2009-2013) – Electric transport
Flexibility and adequacy needs • Multiple flexibility options must be combined – Interconnectors – Flexible conventional plant – Curtailment RE units/power-to-X – Demand side management (industry, buildings) – Batteries and other storage (incl. Electric Vehicles) – Dispatchable renewables such as hydro, biogas – Significant gas cogeneration – not very fexible
Natural gas generation capacity factors
• A market with reduced capacity factors • Higher price received by generators per MWh generated • Overall profitability reduced CCGT Capacity Factors 2030 100 90 80 70
50 40 30 20 10 0
AT BE BG CY CZ DE DK EE ES FI FR GR HR HU IE IT LT LU LV MT NI NL PL PT RO SE SI SK UK
%
60
REmap
PRIMES REF
DRAFT results
Joint study with University College Cork UCC
Wholesale electricity prices • Increased VRES causes systematic decrease in system pricing • Renewables causing a shift in the merit order curve • Affects revenues of conventional power plants
DRAFT results
Interconnector congestion (DRAFT) • Limits the efficient movement of electricity particularly FR, DE and UK • Raises concerns over the flexibility of the power systems within these member states with significantly increased VRES Interconnector congestion 9000 7000 6000 5000 4000 3000 2000 1000
PRIMES REF
REmap
PL-SK
PL-SE
NO-UK
NO-SE
NO-NL
NO-FI
NO-DE
NL-UK
NI-UK
LT-PL
IT-SI
IE-UK
HU-SK
HU-RO
GR-IT
FR-UK
FR-IT
FR-IE
FR-ES
ES-FR
DK-SE
DK-NO
DK-NL
DE-SE
DE-PL
DE-NL
DE-FR
CZ-PL
CZ-DE
CH-IT
CH-FR
CH-DE
BG-GR
BE-UK
BE-NL
BE-FR
BE-DE
AT-SI
AT-IT
AT-DE
AT-HU
0
AT-CZ
Hours Congested
8000
Interesting findings by country France • Significant amounts of dispatchable Capacity is replaced by VRES • Currently leading to highly congested interconnectors • Shadow Price of certain interconnectors is over $300/MW • To incorporate CHP demands is challenging due to reduced natural gas capacity • Major Exporter of power –
Net interchange of 130 TWh
UK • Very low electricity price – $65 caused by high penetration wind and negative pricing • Large exporter of power – very congested Interconnectors • High reliance on CCGT
Germany • Experiences curtailment • Highly congested interconnectors • Large exporter of power • Greater imports due to reduced national dispatchable capacity – Polish Coal and French Nuclear Generation mainly
Storage • 34 000 home battery storage systems in Germany early 2016 – around 2% of all installed solar PV • Pumped hydro – 18 GW in NW Europe by 2030 (12.9 GW today) • Up to 40 million EVs in Europe by 2030 – 4801,480 GWh storage capacity (200-700 GW) – Mobile storage may dwarf stationary storage – Reuse of car batteries for stationary applications
Biogas as complement for natural gas • Europe 540 BCM natural gas use incl. 130 BCM imports from Russia • EU potential for biogas approx. 10% of natural gas demand in 2020 • Germany 7 500 biogas cogeneration installations 3.2 GW capacity – Today operated in baseload (FiT creates no incentive for flexibility) – Can be combined with other variable renewable sources into “virtual power plant”
Conclusions • The share of renewable power will continue to rise • Gas power generation can supplement variable renewables and help to ensure adequacy • It is one of several flexibility options that need to be combined • Todays prices make gas power generation investments challenging • Future gas plant may face low utilization rates • Power sector market design must be adjusted on the longer term • Gas would benefit from a sufficiently high and predictable carbon price
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