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Flexibility Solutions for High-Renewable Energy Systems
A BNEF study in partnership with Eaton and Statkraft
Albert Cheung
December 5, 2018
1 Flexibility Solutions for High-Renewable Energy Systems
U.K. and Germany:
● Renewables dominate on economic basis
● Growing need for flexibility at all timescales
● Little room left for ‘baseload’ generation
● More days, weeks and months dominated
by renewables…
● …but still days, weeks and months with little
renewables too
Nordics:
● Hydro resource allows very high renewable
penetration; might have surplus flexibility
2017 flexibility study recap
-20
0
20
40
60
80
23/Feb09:00
24/Feb09:00
25/Feb09:00
26/Feb09:00
27/Feb09:00
28/Feb09:00
29/Feb09:00
GW
Curtailment
Offshore wind
Onshore wind
Solar
Other generation
Demand
High and low renewables weeks in the U.K., 2030
-20
-10
0
10
20
30
40
50
06/Jun18:00
07/Jun18:00
08/Jun18:00
09/Jun18:00
10/Jun18:00
11/Jun18:00
12/Jun18:00
GW
Curtailment
Offshore wind
Onshore wind
Solar
Other generation
Demand
2 Flexibility Solutions for High-Renewable Energy Systems
2018: solving the flexibility gap U.K. and Germany
Flexible demand Interconnectors
to Nordic hydro
EVs with flexible
charging Energy storage
● To what extent can these
technologies solve the
flexibility challenge?
● How do they influence
overall outcomes in the
energy system? Are there
trade-offs?
3 Flexibility Solutions for High-Renewable Energy Systems
U.K. and Germany reports
4 Flexibility Solutions for High-Renewable Energy Systems
Our seven scenarios ● New Energy Outlook as the base
case
● Technology scenarios that can be
interpreted through a policy lens
● Each is a least-cost optimisation to
2040 (market design-agnostic)
● All scenarios successfully solve
the flexibility challenge, but in
different ways…
● …giving different outcomes in
terms of cost, emissions, etc.
5 Flexibility Solutions for High-Renewable Energy Systems
NEO (base case) scenario
A world with good
amounts of ‘new’ flexibility
6 Flexibility Solutions for High-Renewable Energy Systems
● Battery storage costs continue to fall quickly (based on BNEF experience curve)
● Electric vehicles grow to 13% of the fleet by 2030 and 48% by 2040
– They charge inflexibly to begin with, but become smarter over time (50% smart by 2035)
● Demand response grows to 5.5% of peak load (2.7GW)
● Interconnectors not modelled
NEO base scenario: key flexibility assumptions
7 Flexibility Solutions for High-Renewable Energy Systems
Source: Bloomberg NEF
Electricity demand breakdown
Total demand
0
50
100
150
200
250
300
350
400
2015 2020 2025 2030 2035 2040
TWh
EV demand Behind-the-meter generation
Technology 2018 2030 2040
Total demand 331 100% 326 100% 348 100%
EV demand 1 0% 15 5% 53 15%
Behind-the-meter generation 4 1% 9 3% 14 4%
EVs account for
15% of demand in
2040
8 Flexibility Solutions for High-Renewable Energy Systems
Source: BloombergNEF
Evolution of U.K. generation mix
0
50
100
150
200
250
300
350
400
2015 2020 2025 2030 2035 2040
Generation (TWh)
Flexi
Solar
Wind
Biomass
Hydro
Other
Oil
Nuclear
Gas
Coal
Renewable energy shares:
● 74% by 2030
● 80% by 2040
9 Flexibility Solutions for High-Renewable Energy Systems
Source: BloombergNEF
Evolution of U.K. generation capacity
0
50
100
150
200
250
2015 2020 2025 2030 2035 2040
Capacity (GW)
Other flexible capacity
Demand response
Small-scale batteries
Utility-scale batteries
Small-scale PV
Utility-scale PV
Biomass
Offshore wind
Onshore wind
Hydro
Nuclear
Oil
Peaker gas
Gas
Coal 22 11
59
32 40
30 28
6 6
24
729
15
8
33
1
2030 2040
10 Flexibility Solutions for High-Renewable Energy Systems
Source: BloombergNEF. Note: Flexible EV demand not shown.
Cumulative new flexible capacity Typical demand profile, Q1 2040
Flexibility
0
20
40
60
80
2015 2020 2025 2030 2035 2040
Capacity (GW)
Other flexible capacity
Demand response
Small-scale batteries
Utility-scale batteries
Peaker gas 0
10
20
30
40
50
60
00:00 03:00 06:00 09:00 12:00 15:00 18:00 21:00
GW
General EV demand (fixed) EV demand (dynamic)
General demand
Fixed EV
charging
Flexible EV
charging
11 Flexibility Solutions for High-Renewable Energy Systems
Solving for all types of weather, 2040
0
20
40
60
80
100
Oct 29, 2040 Oct 30, 2040 Oct 31, 2040 Nov 01, 2040 Nov 02, 2040 Nov 03, 2040 Nov 04, 2040
Generation (GW)
0
20
40
60
80
100
Aug 06, 2040 Aug 07, 2040 Aug 08, 2040 Aug 09, 2040 Aug 10, 2040 Aug 11, 2040 Aug 12, 2040
Generation (GW)
0
20
40
60
80
100
Dec 20, 2040 Dec 21, 2040 Dec 22, 2040 Dec 23, 2040 Dec 24, 2040 Dec 25, 2040 Dec 26, 2040
Generation (GW)
Week with low
renewable output
Week with median
renewable output
Week with high
renewable output
Gas Solar
Wind
Curtailment
Charging Discharging
Nuclear
Gas runs for days
Lots of curtailment
12 Flexibility Solutions for High-Renewable Energy Systems
Metric Units 2030 2040
System cost GBPm/TWh 32.8 39.8
Emissions MtCO2 16.8 11.6
Fossil capacity as share of peak
demand % 49% 34%
Renewable share of generation % 74% 80%
Key metrics for NEO scenario
13 Flexibility Solutions for High-Renewable Energy Systems
Low-flex scenario
What if we don’t manage to
integrate new forms of flexibility?
14 Flexibility Solutions for High-Renewable Energy Systems
● Battery storage costs fall more slowly (top-end of BNEF expectation)
● Electric vehicles charge inflexibly
● Demand response doesn’t grow from today’s levels
● Interconnectors not modelled
Low-flex scenario: key flexibility assumptions
15 Flexibility Solutions for High-Renewable Energy Systems
Source: BloombergNEF. Note: percentages show relative change
against the NEO scenario
2030 2040
Generation capacity changes for low-flex scenario, versus NEO base case
+52%
-6%
+8%
+5%
-53%
-9%
-82%
-40 -30 -20 -10 0 10 20
Peaker gas
Onshore wind
Offshore wind
Utility-scale PV
Small-scale PV
Utility-scale batteries
Small-scale batteries
Demand response
Other flexible capacity
Capacity (GW)
+100%
+11%
+9%
+5%
-85%
-5%
-82%
-40 -30 -20 -10 0 10 20
Peaker gas
Onshore wind
Offshore wind
Utility-scale PV
Small-scale PV
Utility-scale batteries
Small-scale batteries
Demand response
Other flexible capacity
Capacity (GW)
16 Flexibility Solutions for High-Renewable Energy Systems
Source: BloombergNEF. Note: percentages show relative change
against the NEO scenario
2030 2040
Power generation change for low-flex scenario, versus NEO base case
+5%
+6%
-2%
+4%
-10 -5 0 5 10
Lignite
Coal
Gas
Nuclear
Biomass
Wind
Solar
Generation (TWh)
+29%
-4%
+18%
-4%
+1%
-10 -5 0 5 10
Lignite
Coal
Gas
Nuclear
Biomass
Wind
Solar
Generation (TWh)
17 Flexibility Solutions for High-Renewable Energy Systems
Source: BloombergNEF
Metric Units 2030 2030 2040 2040
Value D vs NEO Value D vs NEO
System cost GBPm/T
Wh 33.9 +3% 45.2 +13%
Emissions MtCO2 18.4 +9% 15.8 +36%
Fossil capacity as share of peak
demand % 54% +10% 50% +45%
Renewable share of generation % 73% -0.7% 79% -1.2%
Key metrics for low-flex scenario, vs. NEO
18 Flexibility Solutions for High-Renewable Energy Systems
● None of the scenarios halt the transition to low-carbon
– In all cases renewable energy achieves roughly three-quarters of the energy mix by 2030, and four-
fifths by 2040.
● However, a lack of ‘new’ flexibility would have a real cost
– For both 2030 and 2040, the low-flex scenario is the least desirable across all metrics.
– This means a greater reliance on gas peakers, leading to higher system costs (13% by 2040), higher
emissions (36% by 2040) and a greater level of back-up capacity.
● New sources of flexibility are needed relatively soon
– For example, in the U.K. by 2025, 4GW of storage capacity required in our base case NEO scenario.
Interconnectors coming online in the early 2020s will also bring benefits (covered later).
Key messages from base case and low-flex scenarios
24 Flexibility Solutions for High-Renewable Energy Systems
● A full switch to EVs won’t overload the
power generation system
– System costs are raised just 2% and 4% in
2030 and 2040 on a per-TWh basis
– Fossil fuel capacity share is raised by just 3%
in 2040 (and not at all in 2030).
– Emission reductions in road fuel far outweigh
rises in power sector (net 19% improvement in
2030 and 88% in 2040).
● …especially if they are flexibly charged
– In our high-EV, high-flexibility scenario, the
results are even better: net emissions down
30% and 96% in 2030 and 2040 respectively.
Key messages on specific technology scenarios
● Energy storage accelerates the transition, but
doesn’t solve the seasonal gap
– High-storage scenario reduces fossil back-up further by 12%
and emissions by 13% to 2030 vs. base case. But gains are
gone by 2040.
● Flexible demand is needed in the long run
– Greater demand flexibility allows the energy system to
operate with 10% less fossil capacity, 42% less battery
capacity and 5% lower system costs in 2040.
● Interconnections with highly flexible markets can
improve outcomes across decades
– The interconnector scenario delivers the best performance on
emissions (excl. the high-EV scenarios) with 24% and 25%
reductions in 2030 and 2040 respectively. The interconnectors
displace 11% and 10% of fossil capacity in these years.
25 Flexibility Solutions for High-Renewable Energy Systems
Source: BloombergNEF
Metric Units 2030 2030 2040 2040
Value Δ vs
NEO Value
Δ vs
NEO
System cost EURm/T
Wh
40.9 +0% 52.4 +8%
Emissions MtCO2 139.5 -3% 92.8 -15%
Fossil capacity as share of
peak demand
% 80% -1% 66% +19%
Renewable share of generation % 76% +1% 85% +3%
Surprising result for Germany
Low-flex scenario comparison vs. NEO base case, Germany
26 Flexibility Solutions for High-Renewable Energy Systems
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27 Flexibility Solutions for High-Renewable Energy Systems
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