Flexibility needs in the energy system for the integration of distributed renewables

WIR SCHAFFEN WISSEN – HEUTE FÜR MORGEN

Evangelos Panos , Tom Kober :: Energy Economics Group

38^th International Energy Workshop , 3 – 5 June 2019, Paris

Flexibility needs in the energy system for the integration

of distributed renewables

Additional exploitable RES potential mostly solar

The “ Challenge”

Climate policy objectives Energy policy objectives

+

> 2050

-85%

+

TWh/yr.

=

3.2 4.4 4.3

20 Hydro

Geothermal Wind Solar PV

“zero-CO₂” power sector

36.5 Mt CO₂

+

How much

flexibility does it need the Swiss Energy System

?

The Swiss TIMES Energy Systems Model (STEM)

Page 3

Supply

Coal

Oil

Gas

Biomass

Primary energy demand

Coal

Oil

Gas

Nuclear

Hydro

Bioenergy

Renewables Imports &

Exports

Trade matrices

Domestic production

Transformation

Refinery

Gas processing

& distribution Power generation productionHeat

Biomass processing

Hydrogen production Synthetic fuels

Final energy demand

energy useNon- Industry

Transport

Residential

Services

Agriculture

Energy service demand

Industrial production Industrial value

added pkm travelled

tkm travelled

Househods &

household size Value added in

Services

CO2 prices

Policies

Technologies

GDP

Population

Energy flows CO2 emissions Investments

Least cost approach

Long term horizon & high intra annual resolution

Representation of 309 electricity grid transmission lines

Representation of the

stochasticity of supply & demand

Technical & market-based flexibility options, incl. VPPs

ASRESGridTime

Storages, DSM, G2V and V2G

DSM

Integrated scenario-based analysis with STEM

§ GDP growth +1.1% p.a. from 2015 to 2050

§ POP growth +2 million in 2050 from 2015

§ CO₂price in ETS sectors gradually increases to 60 EUR/t-CO₂

§ Nuclear phase out to be completed by 2034

§ Emissions standards in transport sector as in the EU from 2025 (95gCO₂/km for cars,

147gCO₂/km for vans); remain constant until 2050

§ Modest energy efficiency measures

§ All assumptions of the Baselinescenario plus

§ CO₂emissions constraint -30% in 2030, -50%

in 2050 from 1990 levels

§ ETS price increases to 140 EUR/t-CO₂ in 2050

§ Intensification of emissions standards in transport to 70gCO₂/km in 2030, 25 in 2050 for cars; 120 in 2030 and 60 in 2050 for vans

§ Endogenous additional efficiency measures Climate

Baseline

Two Long Term Scenarios regarding the future configuration of the Swiss energy system

Efficiency and electricity play an essential role in reducing CO2 emissions

Page 5

2015, 36.6

15 20 25 30 35 40 45

1990 2000 2010 2020 2030 2040 2050 Mt CO2

Energy-related CO₂ emissions

Baseline Climate Swiss NDC

44%

27%

10%

19%

0 1 2 3 4 5 6

Mt CO2

CO₂emissions reductions in 2050

Energy

conservation Substitution in electricity prod.

Fuel switching in stationary demand Fuel switching in transport

5.8 Mt

International aviation is excluded from the figures presented in this and next slides

*

* In Climate scenario from the Baseline levels

Residential heating shifts away from oil, alternative fuel

vehicles emerge, and industry adopts innovative energy and material strategies

210 221 233

0 100 200 300 400 500 600 700 800 900

Baseline Climate Baseline Climate

2015 2030 2050

Final energy consumption in all sectors (PJ)

Environmental heat Hydrogen

Solar Wastes Wood Heat Coal Gas, Biogas Oil, Biofuels Electricity

-22%

20% 22% 21%

19% 25% 26%

30% 29% 29%

31%

24% 24%

0 100 200 300 400 500 600 700 800 900

Baseline Climate Baseline Climate

2015 2030 2050

Final energy consumption by sector (PJ)

Transport Residential Services Industry

The power generation sector undergoes a profound

transformation towards distributed generation and renewables

Page 7

-10 0 10 20 30 40 50 60 70 80

Baseline Climate Baseline Climate

2015 2030 2050

Electricity supply (TWh)

Net Imports Geothermal Wind Solar

CHPs and wastes Gas turbine CC Nuclear

Hydro (excl. pump)

0 2 4 6 8 10 12

Baseline Climate 2050

Electricity from CHP plants (TWh)

H₂ Wood Biogas Gas Oil Wastes

Flexible distributed thermal capacity emerge, back-up with heat storage; centralized flexible capacities need to provide secondary & tertiary reserve

0.7

0.8

Baseline Climate

1.9

2.1

Baseline Climate

Flexible gas turbines in 2050 (GW_e) Flexible CHPs in 2050 (GW_e)

1.4

4.2

Baseline Climate

Heat storage to support flexible operation of CHPs in 2050 (GW_th) 16% of the heat produced

by CHPs is seasonally shiftedà1.9 TWh

6% of the heat from CHPs is seasonally shifted à0.7 TWh

Electricity storage important for VRES integration:

batteries used for distributed balancing; pump hydro

operation relates to cross-border trade & ancillary markets

Page 9

0 1000 2000 3000 4000 5000 6000

Baseline Climate

MW

Electricity storage capacity in 2050

Batteries (low voltage) Batteries (medium voltage) Batteries (high voltage) CAES

Pump Storage

0 500 1000 1500 2000 2500

Baseline Climate

GWh

Electricity storage output in 2050

Batteries grid level 7 Batteries grid level 5 Batteries grid level 3 CAES

Pump Storage (turbine output)

VPPs & gas turbines supply the increased needs in secondary reserve; peak demand shifts from winter to summer

0 100 200 300 400 500 600 700

Maximum

requirement Hydro Gas

CHP Gas

turbines Batteries and CAES

MW

Maximum reserve demand and contribution by technology

Baseline (2050) Climate (2050)

0 200 400 600

MW

Winter working day

Batteries/CAES Gas CHP Gas Turbines Hydro

0 200 400 600

MW

Summer working day

Batteries/CAES Gas CHP Gas Turbines Hydro 12h

12h

Reserve provision in 2050, Climate scenario

>300 GWh available storage capacity in EVs

Grid-to-vehicle & vehicle-to-grid provide additional flexibility to the system in Climate scenario,

via smart two-way communication technologies

Page 11 0.0

0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8

1 12 23

GW

Winter working day

0.0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8

1 12 23

GW

Winter Saturday

Endogenous G2V profiles in 2050 (note scale is in GW)

3.5 million EVs in 2050

(65% of the fleet) 4.3 TWh electricity consumption by cars

0 20 40 60 80 100 120 140 160

1 12 23

MW

Winter working day

0 20 40 60 80 100 120 140 160

1 12 23

MW

Winter Saturday

Endogenous optimum V2G profiles in 2050 (note scale is in MW)

Winter working day Winter Saturday Winter working day Winter Saturday

Demand side management in buildings sector is a crucial pillar of flexibility; temporal shifts of electricity in electric- based heating systems with storages

0%

3%

6%

9%

12%

15%

18%

0 200 400 600 800 1000 1200

Baseline Climate

Residential - water heating Residential - space heating Services

Industry

% of total electricity consumption for heating (right axis)

Electricity stored in water heaters and heat pump systems in 2050

Power-to-gas technologies become commercial, provide seasonal flexibility and generate clean fuels to support decarbonisation

Page 13

Electricity:

4.8 TWh

Electrolyser losses:

1.2 TWh

H₂: 3.6 TWh

H₂ to gas grid: 0.3 TWh H₂seasonally shifted: 0.6 TWh

H₂direct use:

3.1 TWh

H₂used in stationary applications:

1.4 TWh H₂used in transport technologies:

2.0 TWh

H₂used for

methanation: 0.2 TWh H₂storage losses

5 Billion EUR is invested in P2G

P2X pathway in the Climatescenario in 2050

The different flexibility options have complementary and synergistic for a cost effective integration of VRES

-6 -4 -2 0 2 4 6 8 10 12 14

GW

Summer working day

-6 -4 -2 0 2 4 6 8 10 12 14

GW

Summer Saturday

-6 -4 -2 0 2 4 6 8 10 12 14

GW

Winter working day

-6 -4 -2 0 2 4 6 8 10 12 14

GW

Winter Saturday Electrolysis

Storage (batteries) Storage (pump) Net Imports Hydro Dams Geothermal Solar Wind Run-of-River Large Gas CHPs Wastes

Demand ^0.0

1.0 2.0 3.0 4.0 5.0

GW

Contribution of flexibility options in absorbing excess electricity (12h,

Summer Saturday)

Power-to-Gas Pumping Charging of batteries DSM Grid-to-Vehicle

The shape of the load profile in 2050 is much different from today’s

Dispatch profile in 2050, Climate scenario

The increase in fuel & carbon prices raises the marginal cost of electricity production, but efficient integration of VRES is critical to avoid high price peaks

Page 15

Marginal cost of electricity production (EUR/MWh)

(median value accros the 288 typical operating hours of the STEM model)

32

75

86

76 70

0 20 40 60 80 100

2015 Baseline Climate Baseline Climate

2015 2030 2030 2050 2050

•

Flexibility is a crucial parameter for future energy systems worldwide

•

Multiple flexibility options need to be synergistically provided, involving multiple actors (energy planners, TSOs, utilities, consumers)

•

The type of flexibility options deployed is influenced by uncertainty in energy prices, economic growth, climate policy intensity, technology availability, and market designs

•

For the flexibility options to be cost-effective, markets need to be redesigned, new business models to emerge, load forecasting methods to be improved, and consumers need to adopt new flexibility measures

Conclusions

Page 17

Wir schaffen Wissen – heute für morgen

Evangelos Panos Energy Economics Group

Laboratory for Energy Systems Analysis Paul Scherrer Institute

email: evangelos.panos@psi.ch

My thanks go to Prof. Alexander Wokaun for his support in this study The study was financially supported by:

PSI ESI Platform

Studiengruppe Energieperspektiven Swiss SCCER Heat and Electricity Storage

The transition to a low-carbon system creates stranded assets due to lock in long-lived investments; early action is important to reduce the climate policy costs

* Costsreferto differenceof undiscountedcostsof climatescenario vs. baseline

-40 -20 0 20 40 60 80 100 120 140

2020 2020-2030 2020-2040 2020-2050

billion CHF

Cumulative climate policy costs*

Capital cost Fixed O&M costs Variable costs Total net cost

0 2 4 6 8 10 12

Electricity sector Industrial sector Buildings sector

GW

Early capacity retirements in the Climate scenario

2015-2030 2030-2050

Per capita policy cost 150 – 300 EUR/yr.

Cost assumptions of batteries

Page 19

0 50 100 150 200 250 300 350 400

2018 2030 2050

Energy cost (CHF/kWh)

0 500 1,000 1,500 2,000 2,500

2018 2030 2050

Power cost (CHF/kW)

Wholesale Arbitrage 60 MWh Li-Ion (NMC)

Increase of Self- Consumption 5 KWh Li- Ion (NMC)

End-consumer Arbitrage 250 kWh Li-Ion (NMC)

T&D Upgrade Deferral 50 MWh Li-Ion (NCA)

LEA/TA group recent estimates regarding current storage costs from SCCER HAE

Future projections are based on the developments seen in the IRENA Storage Report 2017

Cost estimates for P2X technologies

Page 20

Investment cost Efficiency

Current 2050 Current 2050

Electrolyzer (large scale) 2400 CHF/kW_H2 950 CHF/kW_H2 63% 75%

H2 Storage (large scale) 900 CHF/kg_H2 450 CHF/kg_H2 99% 99%

H2 Methanation (large scale) 1500 CHF/kW_CH4 800 CHF/kW_CH4 70% 85%

Source for P2X technologies: KEMA, 2013. Systems analyses Power to Gas Source for electrolyzers: ISCHESS project, LEA/TA Group estimates

Characteristics of future power technology

Page 21

Source: Bauer and Hirschberg et al., (2017) Potentials, costs and environmental assessment of electricity generation technologies

Levelized cost of electricity generation in 2050 (Rp./kWh)