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on the electricity supply-demand on the electricity supply-demand on the electricity supply-demand on the electricity supply-demand on the electricity supply-demand on the electricity supply-demand on the electricity supply-demand on the electricity supply-demand balance in Francebalance in Francebalance in Francebalance in Francebalance in Francebalance in Francebalance in Francebalance in Francebalance in Francebalance in France
GENERATIONGENERATIONGENERATIONGENERATIONGENERATIONGENERATIONGENERATIONADEQUACY REPORTADEQUACY REPORTADEQUACY REPORTADEQUACY REPORTADEQUACY REPORTADEQUACY REPORTADEQUACY REPORT
2016 EDITION2016 EDITION2016 EDITION2016 EDITION2016 EDITION2016 EDITIONEXECUTIVE SUMMARYEXECUTIVE SUMMARYEXECUTIVE SUMMARYEXECUTIVE SUMMARYEXECUTIVE SUMMARYEXECUTIVE SUMMARYEXECUTIVE SUMMARY
RTE Réseau de transport d’électricité shall not be liable for damages of any nature, direct or indirect, arising from the use, exploitation or circulation of the documents, data and information contained in the “Generation Adequacy Report on the electricity supply-demand balance in France – 2016 Edition,” including any operational, fi nancial or commercial losses.
GENERATION ADEQUACY REPORT on the electricity supply-demand balance in France I 2016 EDITION 3
2016 GENERATION ADEQUACY REPORT EXECUTIVE SUMMARY EXECUTIVE SUMMARY
2016 Generation Adequacy Report
Executive SummaryThe year 2016 marks a real turning point in climate and energy policy. Taken together, the decisions made during the year will have a lasting impact on security of electricity supply in France.
With energy effi ciency gathering so much momentum, for the fi rst time, scenarios have been drawn up calling for a reduction in power demand over fi ve years. A decline in consumption in France from 479 TWh in 2015 to 471 TWh in 2021 is now envisaged. Peak demand forecasts follow a similar trend. Energy effi ciency measures, notably in the residential and service sectors, will keep consumption in check despite a surge in new end-uses for electricity and a more favourable economic climate.
Solar photovoltaic and wind power continue to steadily gain ground in France, and a new roadmap prepared in 2016 sets higher targets for 2018 and 2023.
This is a crucial time for fossil-fi red capacity given the economic challenges the sector faces. A number of factors are creating uncertainty for generators: the absence of end-markets for semi base load and peak generation, the lack of visibility on how the French capacity mechanism will be implemented given the investigation launched by the European Commission, and the debate under way about the carbon price. Some producers are waiting to have a better
idea of the economic outlook for fossil-fi red generation before deciding what to do with their gas and coal plants.
The implications may vary depending on the strategies and generation portfolios of the players in question.
For all of these reasons, RTE has drastically revised its assumptions about future trends in fossil-fi red capacity relative to the 2015 edition. The 2016 Generation Adequacy Report explores a series of possible trajectories with high and low scenarios that refl ect the most recent statements from generators. Projected trends in the different technologies over the next fi ve years, within these “limit” scenarios, have a major impact on the conclusions of the security of supply assessment.
Margins available to the French power system show a gap of more than 5 GW between the high and low scenarios starting in the winter of 2017 and lasting through 2021. The risk of imbalances between supply and demand appears to be greatest in the winters of 2018 and 2019 under the scenario with the lowest thermal capacity (shortfall of more than 2GW).
These elements of analysis shed some light on the impact changes in thermal generation capacity will have on the power system.
4
EXECUTIVE SUMMARY
Drivers of domestic demand growth in mainland France “Baseline” scenario
TWh
Demand2015
Volumeand other
New end-usesand transfers
o/w EV/PHEV: 1.7 TWH
Energyefficiency
Demand2021
400
420
440
460
480
500
520
540
10 TWh-36 TWh18 TWh
479 TWh 471 TWh
1. For the fi rst time, electricity demand forecasts assume a contraction over the medium term
Forecast trend in “one-in-ten” peak indicator
High variant Baseline Low variant
GW
2015-16 2016-17 2017-18 2018-19 2019-20 2020-2196
98
100
102
104
106
102.1
101.1
99.9
102.3
100.9
99.1
102.5
100.7
98.3
102.7 102.8
100.3100.0
97.3
96.4
Dotted line represents 2015 Generation Adequacy Report
TWh
440
450
460
470
480
490
500
510
2006
2005
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
479
490
448
Dotted line represents 2015 Generation Adequacy Report
471
Historical Baseline Low variant High variant
Annual domestic electricity consumption in mainland France (at reference temperatures, excluding uranium enrichment)
Electricity demand in France has been stabilising for several years. Energy effi ciency measures will gain momentum over the coming years, such that forecasts now point to a contraction in power demand in spite of sustained demographic growth, an uptick in economic activity and a climate that is favourable to new uses for electricity. Total electricity demand in mainland France is thus seen declining by 1.5% between 2015 and 2021 under the “Baseline” scenario.
Peak demand forecasts follow a similar trend. As in the 2015 Generation Adequacy Report, peak demand growth is aligned with energy demand growth here.
GENERATION ADEQUACY REPORT on the electricity supply-demand balance in France I 2016 EDITION 5
2016 GENERATION ADEQUACY REPORT EXECUTIVE SUMMARY
2. Renewable energy growth trajectories refl ect new multiannual energy programme targets
3. Decisions taken in 2016 will impact future of thermal generation capacity
Forecast trend in onshore wind power capacity
Inst
alle
d M
W
2001
-02
2003
-04
2005
-06
2007
-08
2009
-10
2011
-12
2013
-14
2015
-16
2017
-18
2019
-20
2021
-22
2023
-240
5,000
10,000
15,000
20,000
25,000
30,000
Historical Baseline, 2016 GAR MEP variant• MEP • MEP (low option) • MEP (high option)
Forecast trend in photovoltaic capacity
Inst
alle
d M
W
2001
-02
2003
-04
2005
-06
2007
-08
2009
-10
2011
-12
2013
-14
2015
-16
2017
-18
2019
-20
2021
-22
2023
-24
0
5,000
10,000
15,000
20,000
25,000
Historical Baseline, 2016 GAR MEP variant• MEP • MEP (low option) • MEP (high option)
Forecast trend in oil-fi red capacity
Inst
alle
d M
W
0
1,000
2,000
3,000
4,000
5,000
6,000
2015-16 2016-17 2017-18 2018-19 2019-20 2020-21
■ Available • 2015 GAR
Sustained renewable energy growth lifts installed capacity to around 55 GW (including 17 GW of wind power and 10 GW of solar photovoltaic) at the end of the study period. A high variant considers a doubling of the wind and solar power
Following several years of economic diffi culties, France’s fossil-fi red generation capacity is entering a critical period given the economic challenges facing the sector.
A number of factors are creating uncertainty for generators: the absence of end-markets for semi base load and peak generation, the lack of visibility on how the French capacity mechanism will be implemented given the investigation launched by the European Commission, and the debate under way about the carbon price. Some producers are waiting to have a better idea of the economic outlook for fossil-fi red generation before deciding what to do with their gas and coal plants.
The implications may vary depending on the strategies and generation portfolios of the players in question.
growth rates (to 2 GW a year for each technology starting in 2018), in keeping with the targets for 2023 set forth in the multiannual energy programme (MEP).
6
EXECUTIVE SUMMARY
Current plans call for all centralised oil-fi red units to be shut down gradually between now and 2018, even those that have recently been brought into compliance with new environmental standards.
As for other technologies (gas and coal plants), with so many sources of uncertainty, deliberately contrasting high and low scenarios are examined to show the upper and lower limits of the future potential of each.
The “High thermal” scenario assumes an economic and regulatory climate that is generally favourable to thermal power plants being kept in service. Under this scenario, installed thermal capacity is broadly stable with, in particular, nearly all combined-cycle gas plants remaining in service over the entire study period. Coal-fi red capacity declines somewhat at the very end of the period, in line with multiannual energy programme guidelines pointing to a possible phase-out of coal power by 2023.
Conversely, under the “Low thermal scenario”, signals sent to players in the French market – including the principle of a �30 per tonne carbon tax to be applied from 1 January 2017, as well as uncertainty about the capacity mechanism – could in theory result in the closure of all coal-fi red plants and the mothballing of half of all combined-cycle gas plants along with some combined heat and power plants.
Under the “High thermal” scenario, total installed capacity, taking oil-, coal- and gas-fi red plants together (not counting
Forecast trend in coal-fi red capacity “High thermal” and “Low thermal” scenarios
Inst
alle
d M
W
0
500
1,000
1,500
2,000
2,500
3,000
3,500
2015-16 2016-17 2017-18 2018-19 2019-20 2020-21high low high low high low high low high low high low
■ Available Mothballed ■ Undergoing maintenance
Forecast trend in combined-cycle gas capacity “High thermal” and “Low thermal” scenarios
Inst
alle
d M
W
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
2015-16 2016-17 2017-18 2018-19 2019-20 2020-21high low high low high low high low high low high low
■ Available Mothballed ■ Undergoing maintenance
Forecast trend in oil-, coal- and gas-fi red capacity “High thermal” and “Low thermal” scenarios
MW
2015-16
high low high low high low high low high low high low
2016-17 2017-18 2018-19 2019-20 2020-21
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
■ Coal ■ Combined-cycle gas ■ Oil
those mothballed or undergoing maintenance), contracts from about 13 GW in 2016 to 8 GW in 2021. Under the “Low thermal” scenario, it would fall to 3 GW in 2021.
It is assumed here that the trend in thermal power capacity over the next fi ve years will be between the high and low scenarios examined. Ultimately, its evolution will depend on choices made by market players. Above and beyond issues of economic equilibrium, generators will probably take other factors into account, particularly the political and social climate, in deciding whether to keep their thermal plants in service.
GENERATION ADEQUACY REPORT on the electricity supply-demand balance in France I 2016 EDITION 7
2016 GENERATION ADEQUACY REPORT EXECUTIVE SUMMARY
-4,000
-2,000
0
2,000
4,000
6,000
8,000
MW
2016-17 2017-18 2018-19
Winter
2019-20 2020-21
4,700
5,400
3,600 3,700
6,600
-700
600
-2,500 -2,400
900
Capacity margins or defi cit“High thermal” and “Low thermal” scenarios
“Low thermal” scenario “High thermal” scenario
5. Outcome: The economic challenges facing the thermal power sector make uncertain the availability of more than 5 GW to ensure security of supply starting in the winter of 2017
Thermal power capacity will have a decisive impact on security of electricity supply in France.
Under the “High thermal” scenario, there would be a signifi cant margin starting in the winter of 2016 (4,700 MW) thanks to the presence of all combined-cycle gas plants plus the commissioning of a new unit.
The system would still have comfortable margins of at least 3,600 MW over the following winters and the entire medium term.
With the “Low thermal” scenario, the decommissioning of coal- and gas-fi red plants starting in the winter of 2016 reduce the margin to 600 MW. A defi cit appears the following winter and reaches almost 2,500 MW in the winters of 2018 and 2019 as plants, notably oil- and coal-fi red, continue to be gradually taken out of service.
Margins stabilise in 2019 under both scenarios as the EPR gradually ramps up to full power, offsetting the decrease in output resulting from the Fessenheim closure. At the same time, the fi rst offshore wind farms developed through calls for tenders come on stream, and demand continues to decline.
In the last winter of the study period, margins become positive again under the “Low thermal” scenario but remain well below those seen under the “High thermal” scenario.
4. A variant exploring the consequences of a partial reduction in nuclear capacity
The 2016 Generation Adequacy Report assumes that installed nuclear power capacity will not change, in line with the scenario in the 2015 edition calling for Fessenheim to go
offl ine when the EPR is commissioned. One variant presented here also considers capacity contracting by around 1 GW in 2019 and then another 1 GW in 2020.
This improvement refl ects the simultaneous commissioning of two interconnections with Italy and Great Britain, together representing capacity of about 2 GW, and the fact that the EPR will be operating at full power by then and more offshore wind farms will be connected.
There is uncertainty surrounding the effective completion of these projects, and it affects this assessment. Non-completion would result in a downward revision of margin estimates.
8
EXECUTIVE SUMMARY
Capacity margins or defi cits and unserved energy“High thermal” and “Low thermal” scenarios
2016-17 2017-18 2018-19 2019-20 2020-21
“High thermal” scenario
Expected energy not served 2.0 GWh 1.4 GWh 2.5 GWh 2.7 GWh 0.8 GWh
Loss of load expectation (+/- 15 min) 0h45 0h30 1h00 0h45 0h15
Capacity margin or gap 4,700 MW 5,400 MW 3,600 MW 3,700 MW 6,600 MW
“Low thermal” scenario
Expected energy not served 8.6 GWh 13.4 GWh 26.5 GWh 26.2 GWh 7.6 GWh
Loss of load expectation (+/- 15 min) 2h30 3h45 6h45 6h15 2h15
Capacity margin or gap 600 MW -700 MW -2,500 MW -2,400 MW 900 MW
GENERATION ADEQUACY REPORT on the electricity supply-demand balance in France I 2016 EDITION 9
SENSITIVITY ANALYSES
Sensitivity analyses
Analysing the sensitivity of results to assumptions about demand, renewable energy development and installed nuclear power capacity makes it possible to evaluate the impact of these determinants on the evolution of margins in the coming years.
1. Sensitivity to demand forecasts
The sensitivity of results to demand forecasts is measured through high and low variants applied to all European countries considered in the Generation Adequacy Report.
Applying the low demand variant, the adequacy criterion is met over the entire study period under both the “High
Sensitivity of capacity margin or defi cit to demand – “low” variant
MW
2016-17 2017-18 2018-19
Winter
2019-20 2020-21
4,700 5,400
3,600 3,700
6,600
-700
600
-2,500 -2,400
900
-6,000
-4,000
-2,000
0
2,000
4,000
6,000
8,000
10,000
12,000
“Low thermal” scenario – Baseline demand forecast “High thermal” scenario - Baseline demand forecast “Low thermal” scenario – Low demand forecast “High thermal” scenario – Low demand forecast
Sensitivity of capacity margin or defi cit to demand – “high” variant
MW
Winter
2016-17 2017-18 2018-19 2019-20 2020-21
4,700 5,400
3,600 3,700
6,600
-700
600
-2,500 -2,400
900
-6,000
-4,000
-2,000
0
2,000
4,000
6,000
8,000
10,000
12,000
“Low thermal” scenario – Baseline demand forecast “High thermal” scenario – Baseline demand forecast “Low thermal” scenario – High demand forecast “High thermal” scenario – High demand forecast
thermal” and “Low thermal” scenarios. Reduced energy as well as peak power demand creates margins over the whole period. These margins are slightly positive between 2017 and 2020 under the “Low thermal” scenario and exceed 6 GW over the entire period under the “High thermal” scenario.
Conversely, the stronger demand growth considered under the high variant results in a sharp increase in the shortfall risk. A capacity gap larger than that observed under the “Baseline” scenario appears in the winter of 2016 under the “Low thermal” scenario, and it approaches 6 GW in the winter of 2019. Under the “High thermal” scenario, margins are positive over the entire study period though they are very small in the winters of 2018 and 2019.
APPENDIX
10
APPENDIX
MW
Winter
2016-17 2017-18 2018-19 2019-20 2020-21
4,700
5,400
3,600 3,700
-2,500 -2,400
900
-700
600
6,600
-4,000
-2,000
0
2,000
4,000
6,000
8,000
“Low thermal” scenario – Baseline RES forecast “High thermal” scenario - Baseline RES forecast “Low thermal” scenario – RES variant “High thermal” scenario - RES variant
Sensitivity of capacity margin or defi cit to renewable energy capacity
MW
Winter
2016-17 2017-18 2018-19 2019-20 2020-21
4,700
5,400
3,600
3,700
-2,500
-2,400
900
-700
600
6,600
-4,000
-2,000
0
2,000
4,000
6,000
8,000
“Low thermal” scenario – Baseline nuclear forecast “High thermal” scenario – Baseline nuclear forecast “Low thermal” scenario – Nuclear variant “High thermal” scenario – Nuclear variant
Sensitivity of capacity margin or defi cit to nuclear capacity
2. Sensitivity to renewable energy growth forecasts
The sensitivity of results to renewable energy growth appears less signifi cant than sensitivity to demand. Indeed, the very sharp increase in wind and photovoltaic power capacity considered only has a minimal impact on the level of risk facing the country. This is proof that these technologies’ contribution to covering the shortfall risk does not result in the creation of substantial additional margins, as the shortfall risk is still concentrated during peak demand hours on winter evenings.
3. Sensitivity to nuclear capacity forecasts
A theoretical decrease in nuclear power capacity, of 1 GW in the winter of 2019 and then 2 GW in the winter of 2020, has a stronger impact on the shortfall risk. While margins remain positive in the last two winters under the “High thermal” scenario, the situation worsens under the “Low thermal” scenario, with the capacity margin turning into a defi cit late in the period due to the withdrawal of 2 GW of nuclear capacity.
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