IEA-RETD RE-INTEGRATION 20150311

Integrating Variable Renewable Energy

Andrew Conway18 March 2015

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AGENDA

• Definitions, scope & approach• Challenges & context• Frame-conditions – integration measures• Case studies• Conclusions & recommendations


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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


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


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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.


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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




High flexibility

Low flexibility

Well distributed

Mostly distributed


Mostly in one area

Mid flexibility

High wind and solar

High wind

Mid VRE penetration

Low VRE penetration




High flexibility

Low flexibility

Well distributed

Mostly distributed


Mostly in one area

Mid flexibility


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


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


Regulator incentives on SO

Grid code

012345

Start year Now



Use of forecasting


Grid representation



Grid code

012345

Start year Now


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


VRE INCENTIVES

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OPERATING

APPROVED

PLANNED


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


INTERCONNECTOR MANAGEMENT

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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


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


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


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)


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



Grid representation

Use of forecasting

Interconnector management and market integration

Grid code


Nordel coupling – Denmark joins Nordpooland price quotation implemented



Use of forecasting


Grid representation



Grid code

012345

Start year Now


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)


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



Grid representation

Use of forecasting

Interconnector management and market integration

Grid code


Hokkaido is has a vertically integrated utility (HEPCO). This is a fundamentally different regulatory regime, for which our assessment is not applicable


HOKKAIDO - measures

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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


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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


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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


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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


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IB contact: Andrew Conway, [email protected]

IB contact: Guy Doyle, [email protected]

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


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


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


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: [email protected]

[email protected]

THANK YOU!

http://www.iea-retd.org/

mailto:[email protected]

mailto:[email protected]

IEA-RETD RE-INTEGRATION 20150311

Environment

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