Integrating Wind & Solar power in a Grid

ELIA GROUP INTERNATIONALA strong, reliable and sustainable partner

Symposium Getting Power from Wind and Sun

Tokyo, March 8th 2018

One Group

Two TSOs (transmission system operators) with International Activities

The Elia Group is expanding its international activities through Elia Grid International

50Hertz at a glance

Grid area

Length of lines

Max. LoadPower consumption (based on electricity supplied to end-consumers in acc. with Renewables Energy Law “EEG”)

Installed capacities:- of which Renewables- of which Wind

Turnover- of which grid

RES share in power consumption

109,589 km² (~31 %)

10,215 km (~30 %)

~ 96 TWh (~20 %)

~ 16 GW (~20%)

Figures (50Hertz share in Germany) as of 2016/12/31

52,268 MW (~26 %)29,017 MW (~30 %)17,236 MW (~37 %)

9.449 bn€1.290 bn€

47.8%

Owner of the transmission grid

System operator

Market developer

„Trustee“ for managing surcharge systems

In charge of operation, maintenance and the development of extra-high-voltage lines and power junctions (substations) as well as for the connection of large-scale generators and consumers (including offshore).

Catalyst for the development of the energy market, especially in Northern and Central-Eastern Europe.

Responsible for the financial management of renewable energies (EEG).

Responsible for system stability of the transmission system around the clock: frequency control and voltage regulation, congestion management.

Activities of 50Hertz as a German TSO

The power system in the 50Hertz grid area

TSO (400 kV, 220 kV)

DSO – low level (< 110 kV)

DSO – 2nd to m. level (< 110 kV)

DSO – 1st level (< 110 kV)

5 neighbouring TSOs 12 conv. power plants/storages

- TenneT- CEPS- PSE

- Energinet.dk- Svenska kraftnät

- Schwarze Pumpe- Boxberg- Jänschwalde- Lippendorf- Reuter West- Goldisthal

- Markersbach- Hohenwarte II- Brunsbüttel (GKW)- Moorburg- Rostock- Schkopau

Other DSOs

10 Distribution System Operators

159 Distribution System Operators

Approx. 1.200 Windfarms

200 Windfarms

PV, biomass and other RES

CHP and IPP

CHP and IPP

CHP and IPP

PV, biomass and other RES

9 Windfarms 3 Steel Plants- 7 onshore- 2 offshore

Cascading

PV, biomass and other RES

- AVACON- E.DIS- ENSO Netz- SW Magdeburg - MITNETZ Strom

- Stromnetz Berlin- Stromnetz Hamburg- TEN- WEMAG Netz- SW Staßfurt

RES development in Germany

WindPV Biomass

Markierungen proportional zur installierten Leistung

2000 2006 2016

Massive RES growth in Germany since the introduction of the Renewables Energy Law (EEG) in 2000 –with Wind and PV as the main growth drivers

- ~ 30,000 plants- 1,665* MW installed Wind in Germany

- ~ 221,000 plants- 2,233* MW installed Wind in Germany

- ~ 1,600,000 plants- 45,910* MW installed wind in Germany

* BWE Figures

0

10

20

30

40

50

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

TWh

RES development in the 50Hertz grid area

50Hertz is world-leading in the integration of intermittent RES with an integration rate of ~48% in 2016 –with respect to ~32% in Germany.

Source: Company information

DEVELOPMENT OF INSTALLED CAPACITIES IN THE 50HERTZ GRID AREA

DEVELOPMENT OF RES SHARE IN POWER CONSUMPTION IN THE 50HERTZ GRID AREA

27,132 29,017

48 TWh 46 TWh

0

10

20

30

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

GW

Wind Solar PV Biomass Other RES

≙ 48%

TCC – Visitors coming from all over the world

Since 2012 visitors from 70 countries have been in Neuenhagen

8

TCC Berlin – Control Room

50Hertz has been investing intensely in system operations and runs a state-of-the art system for welltrained and highly reliable operators

Business-ITApplications

Data-communicationIT-Infrastructure

Network-Management-

Center

Real-Time-ITApplications

IT-Security & Governance

Applications• Energy Settlement• Finance/Controlling• Asset Management• Commodities

Systems/Platforms• Data-center Management• Server-Management• Database-Management• Application Firewalls

Systems/Platforms• IT-Network setup• IP-System Management• Data-Transmission Network

Mgt.• Telefony Mgt.

Network• 24x7 Network Monitoring &

Management

Applications• Scada Management• Load Frequency Mgt.• Data Exchange

TSOs/DSOs• Scheduling System

Management

ISMS

Part of the 50Hertz IT-infrastructure builds the backbone of successful system operation

RES intermittency

Fast RES growth not synchronized with grid development

Grid congestion

Challenges and solutions within system and marketsOverview

Current Situation

Resulting challenges

Shift “central” into a highly “decentral” energy landscape

Decentralization with distributed generation and active costumers

Increasing energy costs for customers

50Hertz solutions

Fast and efficient grid development Innovative congestion management concepts

Market development Foster cooperation on EU level

Physical imports and exports Germany and 50Hertz (2016)

FRA

SUI AUT

DK

SWE

CZ

8,75415

BENELUX2,636

22,981

8,7541536,124

10,147

1,68

4Energinet.dk

TenneT PSE

ČEPS

2012 2013 2014 2015 2016Imports in GWh Exports in GWh 50Hertz Germany

POL

50Hertz grid area is main exporter of electricity in Germany and Europe (~ 40 TWh).

Net exports in TWh

40.4

53.7

39.4

51.8

Significant redispatch is needed – also cross border – to master grid congestion

Scheduled flow versus physical flows (after redispatch)

PlannedExport ofGermany:12 GW

RealizedExport ofGermany:8,5 GW

During high wind periods Germany’s potential commercial export is much higher than physical export capacities allow. Exceeding power flows are turned back by redispatch.

50Hertz has been successfully reducing redispatch costs with grid extension and innovation

REDISPATCH AND RES CURTAILMENT AMOUNTS IN GWh

950800

7017,082

2014 Plan 2018

5,000

2016

5,800

FC 2017

6,450

5,5006,381

2015

10,880

9,544

1,336

267

2,621

2,888

Grid development and process improvements are showing to be effective Risk: ACER/European Commission request for higher trading capacities can significantly increase costs for congestion

management.

§13.2 Curtailment§13.1 Redispatch

First effects of commissioning of SWCL

REDISPATCH AND RES CURTAILMENT COSTS IN m€

205

107 120 115 100

13085

75

25

73

146

69

0

50

100

150

200

250

300

350

400

180 175

FC 10/2017

250200

20162015

351

Plan 2017

Plan2018

2014

94

§13.1 Redispatch§13.2 Curtailment

Grid extension reduces congestion and redispatch costsExample: new Southwest Coupling Line

Phase Shift Transformers (PSTs) at the Polish and Czech borders help steering power flow and reduce congestion

Main functionalities of PSTs Limit/regulate (unplanned) cross-border flows at the German-

Polish and German-Czech borders Prevent congestion at interconnectors and in the network close to

the borderImplementation Hagenwerder-Mikułowa (DE-PL): Polish PSTs in operation since

2016 Vierraden-Krajnik (DE-PL): Two step approach: commissioning of two PSTs and upgrade of the

interconnector on 380 kV in 2018 final state with four PSTs is foreseen for 2020

Roehrsdorf-Hradec (DE-CZ): German and Czech PSTs in operation since 2017

RES intermittency

Fast RES growth not synchronized with grid development

Grid congestion

Challenges and solutions within system and marketsOverview

Current Situation

Resulting challenges

Shift “central” into a highly “decentral” energy landscape

Decentralization with distributed generation and active costumers

Increasing energy costs for customers

50Hertz solutions

Fast and efficient grid development Innovative congestion management concepts

Market development Foster cooperation on EU level

2010

exp. 2020

European market design is based on a zonal conceptwith bidding zones coupled via power exchanges

• Price Coupling successful on the Day Ahead spot market, step-by-step expansion towards a common European Price Coupling.

• Ongoing project to introduce European Price Coupling in the Intraday spot market.

• Ongoing project to introduce Flow-based Market Coupling in Central Europe (exp. 2020)

European market integration has been very successful and facilitates the integration of volatile renewables.

Orange: Market coupling Central-Western EuropeBlue: Market coupling Northern EuropeGreen (dark): Single European Price CouplingGreen (light): Coupling of CZ, SL, HU & RO only (interim-step)

today

Development of short-term and balancing markets is in the focus of the market development strategy

Day-Ahead-Market

Intraday-Market

t-6 years t-(1-3) days t-15min t+6sec t+30sec

Forward Market

t-1 week t+15min

BalancingEnergy

Focus Areas Electricity markets Balancing markets

AuctionCross Border

Transmission Capacities

MarketCoupling

MarketCoupling?

Lessons learned:

− The market products developed and introduced in the last years worked properly (15min products)

− TSOs properly secured the system via additional security measures

− Need for increased flexibility shown by this kind of situation as we will face similar needs on a more regular basis in the future

Operational Challenges from PV: Solar Eclipse 2015 March 20

PV-forecast – Live extrapolation GermanyMegawatt (MW)

25.000

20.000

15.000

10.000

5.000

0

~13,7 GW

~6 GW

00:1

5:00

01:0

0:00

01:4

5:00

02:3

0:00

03:1

5:00

04:0

0:00

04:4

5:00

05:3

0:00

06:1

5:00

07:0

0:00

07:4

5:00

08:3

0:00

09:1

5:00

10:0

0:00

10:4

5:00

11:3

0:00

12:1

5:00

13:0

0:00

13:4

5:00

14:3

0:00

15:1

5:00

16:0

0:00

16:4

5:00

17:3

0:00

18:1

5:00

19:0

0:00

19:4

5:00

20:3

0:00

21:1

5:00

22:0

0:00

22:4

5:00

23:3

0:00

13.351 MW

20.042 MW

6.314 MW

-2.674 MW/1/4-Std

German TSOs can count on market mechanism for basic balancing.

+4.111 MW/1/4-Std

PV-Kombi, 50HzT, Dayahead Forecast 08.00 hPV-Kombi, 50HzT, Extrapolation

Day-ahead forecasts for wind and solar leave room for improvement intraday. 50Hertz build up strong competences in short term forecasting and intraday trading. Estimates are applied where real time data are not available. Service providers deliver online data and forecasts. They are continuously benchmarked against each other. Remaining deviations after market closure are to be levelled out by TSOs by activating control power.

Plant DatabaseWeather Forecast Feed-in calculation Feed-in forecast

Sophisticated RES forecasts in place, further improvements are needed

Good renewables forecasts are key for successful integration

RES intermittency

Fast RES growth not synchronized with grid development

Grid congestion

Challenges and solutions within system and marketsOverview

Current Situation

Resulting challenges

Shift “central” into a highly “decentral” energy landscape

Decentralization with distributed generation and active costumers

Increasing energy costs for customers

50Hertz solutions

Fast and efficient grid development Innovative congestion management concepts

Market development Foster cooperation on EU level

New players with low opportunity costs will offer flexibility on a competitive market of limited size

Distributed flexibility requires the system’s further digitilization. Increasing competition on the flexibility market complicates business cases for storage.

New players

Power to Heat Stadtwerke Schwerin

DSM Steel productionHamburg

Control power by RES (depending on legal framework and subsidy scheme)

DSM aluminium productionTrimet Hamburg

Lichtblick pilot (“At Home” power stations)

Small CHP-assets

DSM provided via aggregators

Guiding principles for integration of distributed flexibilities

Striving for the socio-economic optimum using flexibilities on different voltage levels.

Going for market oriented competitive solutions -while observing market power issues.

Implementing new transparent processes for flexibility providers and network operators.

Developing coordination concepts that take DSO constraints into account.

Using digitalization for innovative solutions.

The cooperation between DSOs and TSOs is being refined

Designetz

Project goal:develop and demonstrate solutions for energy transition, enabling intelligent communication and interaction among different players for an efficient renewables integration

WindNode support:about 40 m€ over 4 years, since 12/2016

Project partners:about 70 partners from industry, utilities, academics, …

Quelle: BMWi, WindNODE, Websites der anderen Konsortien

Within the ministry’s SINTEG program 50Hertz leads the WindNODE projectOverview of the five SINTEG projects

RES intermittency

Fast RES growth not synchronized with grid development

Grid congestion

Challenges and solutions within system and marketsOverview

Current Situation

Resulting challenges

Shift “central” into a highly “decentral” energy landscape

Decentralization with distributed generation and active costumers

Increasing energy costs for customers

50Hertz solutions

Fast and efficient grid development Innovative congestion management concepts

Market development Foster cooperation on EU level

EU

50Hertz is well engaged and committed in the European context

ENTSO-E as main platform

Joint entities for commercial operation

of interconnectors

Regular bilateral meetings/contracts

Design and successful implementation of market coupling

Successful development of grid codes

• There are already well-functioning regional and European TSO cooperations on technical and commercial level.

RSCs across the European grid system as service-providers to TSOs

RES intermittency

Fast RES growth not synchronized with grid development

Grid congestion

Challenges and solutions within system and marketsOverview

Current Situation

Resulting challenges

Shift “central” into a highly “decentral” energy landscape

Decentralization with distributed generation and active costumers

Increasing energy costs for customers

50Hertz solutions

Fast and efficient grid development Innovative congestion management concepts

Market development Foster cooperation on EU level

Grid fees account for 25% of household electricity prices being the only part that differs from region to region

SPLIT OF HOUSEHOLD PRICES IN 2017 GRID FEES (€) ELECTRICITY IN JANUARY 2016

Taxes, fees, levies

Procurement, sales

Grid fees DSO

Grid fees TSO

Rising grid fees and regional differences need to be managed actively

Average composition of the electricity prices 2017, German household with yearly consumption of 3,500 kWh

29.23 ct/kWh

Development of average TSO grid fees for 2018Basis: temporary grid fees 2018, situation as of October 2017 [ct/kWh1]

• 50Hertz’ initiative for unified TSO grid fees will lead to strongly decreasing grid tariffs within next five years.

TSO GRID FEES DEVELOPMENT FOR 2018 CHANGE IN GRID FEES FROM 2017 TO 2018

1Calculated with average grid fees of EHV and EHV / HV with annual utilisation time of 1,000 hours, 3,000 hours and 5000 hours* Rough estimate

(11)%

10%

14%

46%

(20)%

(10)%

0

10

20

30

40

50

50Hertz Tennet TransnetBW Amprion*

Strong increase of surcharges due to renewables developmentEEG-surcharge is the main component

0.445

2015

5.982

6.615

6.170

2013

0.1260.254

6.769

0.0400.3780.005

0.1780.000 0.0000.2370.250

2014

6.354

0.329

5.277

0.250-0.051

0.0920.009

6.240

Ø 7

7.217

6.880

-0.028

2016 2018

+28%

7.600

0.0110.037

6.792

7.684

0.006

0.438

0.370

0.390

2017

0.388

Offshore liabilty surcharge Surcharge for interruptable loads§19 StromNEV-SurchargeKWK-Surcharge (CHP)

EEG-Surcharge

Surcharges for households in ct/kWh

Thank you for your atttention

Q&ABert MaesCo-CEO Nemo Link Ltd

Address:Brussels Office: Rue Joseph Stevens 7, BRUSSELS, BelgiumMobile: 32(0)472 40 69 97Email: bert.maes@nemolink.co.ukWeb: www.nemolink.co.uk