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Smart Grid and European Energy Policyp gy y
Anastasios G. BakirtzisPower Systems Laboratory
School of Electrical & Computer EngineeringAristotle University of Thessaloniki GreeceAristotle University of Thessaloniki, Greece
1
Source: National Geographic
Symposium on Telecommunication, Energy, Environment & Development, Thessaloniki, Nov. 25, 2010
A. G. Bakirtzis “Smart Grid and the European Energy Policy”
Presentation Overview
European Energy Strategy
ese tat o O e e
European Energy Strategy
Electricity Markets
Renewable Integration Challenges
Smart Grid
ConclusionConclusion
• Introduction • Electricity Market Deregulation History • Electricity Market Objectives & Models
• Future Challenges • Effects of RES Integration ‐ Smart Grids • ConclusionsSymposium on Telecommunication, Energy, Environment & Development, Thessaloniki, Nov. 25, 2010 2/20
A. G. Bakirtzis “Smart Grid and the European Energy Policy”
European Energy Strategyu opea e gy St ategyCommission Green Paper of 8 March 2006
• To actively combat climate change by promoting renewable energy sources and energy efficiency
Sustainabilityand energy efficiency
• To improve the efficiency of the European energy grid by creating a truly competitive internal energy market
Competitivenesscompetitive internal energy market
• To better coordinate the EU’s supply of and demand for energy within an international context
Security of Supply
• Introduction • Electricity Market Deregulation History • Electricity Market Objectives & Models
• Future Challenges • Effects of RES Integration ‐ Smart Grids • ConclusionsSymposium on Telecommunication, Energy, Environment & Development, Thessaloniki, Nov. 25, 2010 3/20
A. G. Bakirtzis “Smart Grid and the European Energy Policy”
Electricity Marketsect c ty a ets
Power Power Power
Retail Supply
UnbundlingPower
GenerationPower
TransmissionPower
Distribution
Regulatory
Competitive ServicesMarket System Distribution
g yAuthority
Services
Regulated Services
Operatory
Operator Operator
Generators ConsumersSuppliersTraders
• Introduction • Electricity Market Deregulation History • Electricity Market Objectives & Models
• Future Challenges • Effects of RES Integration ‐ Smart Grids • ConclusionsSymposium on Telecommunication, Energy, Environment & Development, Thessaloniki, Nov. 25, 2010 4/20
Generators ConsumersSuppliersTraders
A. G. Bakirtzis “Smart Grid and the European Energy Policy”
Electricity Marketsect c ty a etsProducts and Services Unbundling
Energy
Generation Capacity
Transport Capacity
Ancillary Services
R (S d T ti S i i & N S i i )Reserves (Secondary, Tertiary Spinning & Non‐Spinning)
Voltage support
Black Start Capability
• Introduction • Electricity Market Deregulation History • Electricity Market Objectives & Models
• Future Challenges • Effects of RES Integration ‐ Smart Grids • ConclusionsSymposium on Telecommunication, Energy, Environment & Development, Thessaloniki, Nov. 25, 2010 5/20
A. G. Bakirtzis “Smart Grid and the European Energy Policy”
Electricity Marketsect c ty a etsPower Pool
(C t li d M k t)Bilateral Contracts(D t li d M k t)
Market Design
Generator Generator Generator Generator Generator Generator
(Centralized Market) (Decentralized Market)
VoluntaryPowerPower
BilateralContracts
PowerExchangePool
Supplier/ Consumer
Supplier/ Consumer
Supplier/ Consumer
Supplier/ Consumer
Supplier/ Consumer
Supplier/ Consumer
• Britain (until 2001), California (new), Chile, Argentina, Colombia, Korea, GreecePJM (Bif t d)
• Britain (since 2001), California (Old),Scandinavian, Netherlands, France, Germany, Poland, Cyprus, Australia
• Introduction • Electricity Market Deregulation History • Electricity Market Objectives & Models
• Future Challenges • Effects of RES Integration ‐ Smart Grids • ConclusionsSymposium on Telecommunication, Energy, Environment & Development, Thessaloniki, Nov. 25, 2010 6/20
• PJM (Bifurcated) Ge a y, o a d, Cyp us, ust a a
A. G. Bakirtzis “Smart Grid and the European Energy Policy”
Electricity Markets
Demand Function
Price[€/MWh]
ect c ty a etsPrice Formation
Demand FunctionSupply Function3000
SMP 150
100
5060
25
Quantity4 000 11.0008.000
• Introduction • Electricity Market Deregulation History • Electricity Market Objectives & Models
• Future Challenges • Effects of RES Integration ‐ Smart Grids • ConclusionsSymposium on Telecommunication, Energy, Environment & Development, Thessaloniki, Nov. 25, 2010 7/20
Cleared Volume [MWh]Quantity[MWh]
4.000 11.0008.000
A. G. Bakirtzis “Smart Grid and the European Energy Policy”
Electricity Marketsect c ty a etsMarkets Time‐line
Long‐term/ Mid‐term(M years to N days ahead) Day D‐1 Days D‐1 / D Real Time
Uncoordinated Trading(Bilateral Contracts)
Real‐Time Market(Centralized Control)
Day‐Ahead Market
Intra‐DayMarket
Hedge against price volatility
Supply / Demand Balance
Power Exchange– Simple, transparent
Power Pool– Co‐optimization of Energy, A/S, Transmission (LMP)p , p
– Ignores unit‐commitment & network– No side paymentsSelf scheduling of generators
Co optimization of Energy, A/S, Transmission (LMP)– Centralized Security Constrained Unit Commitment– “Make‐whole” side payments
• Introduction • Electricity Market Deregulation History • Electricity Market Objectives & Models
• Future Challenges • Effects of RES Integration ‐ Smart Grids • ConclusionsSymposium on Telecommunication, Energy, Environment & Development, Thessaloniki, Nov. 25, 2010 8/20
– Self scheduling of generators
A. G. Bakirtzis “Smart Grid and the European Energy Policy”
Large RES Integration Challengesa ge S teg at o C a e gesCharacteristics of intermittent renewable generation (wind, solar)
Uncertain (Unpredictable )Uncertain (Unpredictable )Variable (Intermittent )Subsidized (feed‐in tariffs, quota mechanisms, tax credits)Non‐Dispatchable / Dispatch Priority (zero marginal cost) Far from Load Centers (transmission reinforcement, loop flows)Energy Resource, not Capacity ResourceAggregation Benefit: Aggregation smoothes out total RES production
Effects on marketLoad net RES generation uncertain and highly variable (no regular pattern)Increased needs for Ancillary ServicesIncreased needs for Ancillary ServicesElectricity spot prices lower on average and highly volatile (negative prices)
Incentivize investment in flexible generation, storage and demand
• Introduction • Electricity Market Deregulation History • Electricity Market Objectives & Models
• Future Challenges • Effects of RES Integration ‐ Smart Grids • ConclusionsSymposium on Telecommunication, Energy, Environment & Development, Thessaloniki, Nov. 25, 2010 9/20
g , gresponse
A. G. Bakirtzis “Smart Grid and the European Energy Policy”
Large RES Integration Challengesa ge S teg at o C a e ges
80,0
Day‐Ahead SMPs for the Spanish SystemZero Prices
30,040,050,060,070,0
010,020,0
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
2010 ‐ 1 March ‐Monday 2008 ‐ 3 march ‐Monday
40
ERCOT Balancing Market Prices ‐ 5 March 2009
0
10
20
30
40
‐40
‐30
‐20
‐10
0
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
Negative Prices
• Introduction • Electricity Market Deregulation History • Electricity Market Objectives & Models
• Future Challenges • Effects of RES Integration ‐ Smart Grids • ConclusionsSymposium on Telecommunication, Energy, Environment & Development, Thessaloniki, Nov. 25, 2010 10/20
North Zone Price South Zone Price West Zone Price Houston Zone Price
A. G. Bakirtzis “Smart Grid and the European Energy Policy”
Large RES Integration Challengesa ge S teg at o C a e ges
Market Requirements in order to incorporate large amounts of RESMarket Requirements in order to incorporate large amounts of RESMarket Integration (to take advantage of the RES aggregation benefit)Regional Transmission Systemg yDemand responseStorageEnhancement of intra‐day and real‐time markets
Smart GridProvides the infrastructure for all above
• Introduction • Electricity Market Deregulation History • Electricity Market Objectives & Models
• Future Challenges • Effects of RES Integration ‐ Smart Grids • ConclusionsSymposium on Telecommunication, Energy, Environment & Development, Thessaloniki, Nov. 25, 2010 11/20
A. G. Bakirtzis “Smart Grid and the European Energy Policy”
What is a Smart Grid?at s a S a t G d?A Smart Grid is an electricity network that can intelligentlyintegrate the actions of all users connected to it - generators,
o e d tho e th t do both i o de to effi ie tlconsumers and those that do both – in order to efficientlydeliver sustainable, economic and secure electricity supplies
A Smart Grid employs innovative products and services together withA Smart Grid employs innovative products and services together withintelligent monitoring, control, communication, and self-healingtechnologies to:
better facilitate the connection and operation of generators of all sizes andtechnologies;
ll t l t i ti i i th ti f th t allow consumers to play a part in optimizing the operation of the system;
provide consumers with greater information and choice of supply;
significantly reduce the environmental impact of the whole electricity supplysignificantly reduce the environmental impact of the whole electricity supplysystem;
deliver enhanced levels of reliability and security of supply.
• Introduction • Electricity Market Deregulation History • Electricity Market Objectives & Models
• Future Challenges • Effects of RES Integration ‐ Smart Grids • ConclusionsSymposium on Telecommunication, Energy, Environment & Development, Thessaloniki, Nov. 25, 2010 12/20
A. G. Bakirtzis “Smart Grid and the European Energy Policy”
Smart Grid
Transmission Distribution Customer
S a t G d
Transmission
• HVDC, FACTS• Substation
Distribution
• Distribution Automation
Customer
• Smart Buildings• Smart Meters• Substation
Automation• PhasorM t U it
Automation• DMS• Active Distribution N t k
• Smart Meters• Smart Appliances• PEVs
Measurement Units (PMUs)
• EMS, SCADA
Networks• Automatic Fault Detection
• Distributed Resources (G & S)
• Demand Response• Wide‐Area Monitoring (WAM)
• Wide‐Area
• Loss Minimization• Micro‐Grids• Virtual Power Plants
p• Real‐Time Pricing• Active Customers• Retail CompetitionProtection (WAP)
• Condition‐Based Maintenance (CBM)
tua o e a ts(VPPs)
• Retail Competition
• Introduction • Electricity Market Deregulation History • Electricity Market Objectives & Models
• Future Challenges • Effects of RES Integration ‐ Smart Grids • ConclusionsSymposium on Telecommunication, Energy, Environment & Development, Thessaloniki, Nov. 25, 2010 13/20
( )
A. G. Bakirtzis “Smart Grid and the European Energy Policy”
Smart GridEnd user real timeInformation &Multi‐directional
S a t G d
Seamless integration
Information & participation
Multi directional ‘flows’
Central & dispersedi t lli
Seamless integrationof new applications Plug & Play
intelligence
Smart materialsCentral & dispersed sources
Smart materials and power electronics
‘automatic’ payments
• Introduction • Electricity Market Deregulation History • Electricity Market Objectives & Models
• Future Challenges • Effects of RES Integration ‐ Smart Grids • ConclusionsSymposium on Telecommunication, Energy, Environment & Development, Thessaloniki, Nov. 25, 2010 14/20
along the value chain
A. G. Bakirtzis “Smart Grid and the European Energy Policy”
Demand Response e a d espo seDemand Response Curtailment of electrical loads at peak times
Demand Dispatch Aggregate and control individual loads on demand
Di h bl L d [L L ]
Smart Metering, Smart Appliances (e.g. smart dish‐washer)
Dispatchable Loads: [Lmin, Lmax]
Load Aggregator
Follow generation (e.g. wind)Provide ancillary services (regulation)Loads Provide ancillary services (regulation)Respond quickly to locally sensed changes in grid frequency
Loads
• Introduction • Electricity Market Deregulation History • Electricity Market Objectives & Models
• Future Challenges • Effects of RES Integration ‐ Smart Grids • ConclusionsSymposium on Telecommunication, Energy, Environment & Development, Thessaloniki, Nov. 25, 2010 15/20
A. G. Bakirtzis “Smart Grid and the European Energy Policy”
Electric Vehiclesect c e c es
Can be aggregated to provide a dispatchable load resource
Smart charging
Aggregator has control of the vehicle while charging
Methods for optimizing the charging processMethods for optimizing the charging process
Provision of ancillary services (e.g. regulation)
• Introduction • Electricity Market Deregulation History • Electricity Market Objectives & Models
• Future Challenges • Effects of RES Integration ‐ Smart Grids • ConclusionsSymposium on Telecommunication, Energy, Environment & Development, Thessaloniki, Nov. 25, 2010 16/20
A. G. Bakirtzis “Smart Grid and the European Energy Policy”
Distributed Generation and Micro‐Gridsst buted Ge e at o a d c o G ds
Micro‐Grid (μG)Micro Grid (μG)Distributed Generation (DG)
Wind Turbines PV Micro Hydro Micro Turbines Fuel CellsWind Turbines, PV, Micro Hydro, Micro Turbines, Fuel Cells, …
Distributed Storage (DS)Demand response (DR)Demand response (DR)
Virtual Power Plants (VPPs)Virtual Power Plants (VPPs)Aggregator of DG, storage and DSM
• Introduction • Electricity Market Deregulation History • Electricity Market Objectives & Models
• Future Challenges • Effects of RES Integration ‐ Smart Grids • ConclusionsSymposium on Telecommunication, Energy, Environment & Development, Thessaloniki, Nov. 25, 2010 17/20
A. G. Bakirtzis “Smart Grid and the European Energy Policy”
Conclusion
Smart Grids provide the necessary
Co c us o
Smart Grids provide the necessary infrastructure for meeting the European g pEnergy strategy goals:
L R bl (RES) I t tiLarge Renewable (RES) Integration
Creation of the Internal Energy Market
Operational Security of Supply
• Introduction • Electricity Market Deregulation History • Electricity Market Objectives & Models
• Future Challenges • Effects of RES Integration ‐ Smart Grids • ConclusionsSymposium on Telecommunication, Energy, Environment & Development, Thessaloniki, Nov. 25, 2010 18/20
A. G. Bakirtzis “Smart Grid and the European Energy Policy”
http://smartgrid.ieee.org/
• Introduction • Electricity Market Deregulation History • Electricity Market Objectives & Models
• Future Challenges • Effects of RES Integration ‐ Smart Grids • ConclusionsSymposium on Telecommunication, Energy, Environment & Development, Thessaloniki, Nov. 25, 2010 19/20
Thank you for your attention!
A. G. Bakirtzis “Smart Grid and the European Energy Policy”
European Energy Strategy ‐ Competitivenessu opea e gy St ategy Co pet t e ess• Directive 96/92/EC•Gradual and partial opening of the electricity markets of Member States, minimum
1st Energy Package
p p g y ,harmonization•Thresholds for market opening, Introduction of Eligible Customers•National liberalized markets emerged instead of one internal electricity market
• Directive 2003/54/EC•Introduces full market opening, One level playing field for all statesN h h ld t li ibl f J l 2004 All t li ibl f J l 20072nd Energy
Package
•Non‐household customers eligible from July 2004 ‐ All customers eligible from July 2007• Regulation (EC) No 1228/2003•Cross‐border transmission (congestion management, allocation, charges)
• Directive 2009/72/EC•Improvement & integration of competitive electricity markets in EU•Unbundling of transmission systems & transmission system operators (TSOs)
3rd Energy Package
g y y p• Regulations (EC) No 713/2009, No 714/2009•Agency for the Cooperation of Energy Regulators (ACER), European Network for Transmission System Operators for Electricity (ENTSO‐E) by 3 March 2011
• Introduction • Electricity Market Deregulation History • Electricity Market Objectives & Models
• Future Challenges • Effects of RES Integration ‐ Smart Grids • ConclusionsSymposium on Telecommunication, Energy, Environment & Development, Thessaloniki, Nov. 25, 2010 21/20
A. G. Bakirtzis “Smart Grid and the European Energy Policy”
European Energy Strategy ‐ Sustainabilityu opea e gy St ategy Susta ab ty20/20/20 EU Target
EU Renewable targets by 2020 (Directive 2009/28/EC)20% reduction in greenhouse gas emissions (wrt 1990 levels)g g ( )20% reduction in primary energy use – energy efficiency20% of EU total energy consumption to come from RES
Expected share of RES in electricity production ≈ 30 – 35%
Change in Future Generation MixIn favor of RES (major part intermittent)Against “dirty” coal base‐load plant
Partially replaced by nuclear and clean coal technologies (CCS)
• Introduction • Electricity Market Deregulation History • Electricity Market Objectives & Models
• Future Challenges • Effects of RES Integration ‐ Smart Grids • ConclusionsSymposium on Telecommunication, Energy, Environment & Development, Thessaloniki, Nov. 25, 2010 22/20
A. G. Bakirtzis “Smart Grid and the European Energy Policy”
Electricity Markets of the Futureect c ty a ets o t e utu e
Internal Electricity Market
Market IntegrationEuropean Target: te a ect c ty a et
NorthernCreation of the Internal Electricity Market (IEM)
Intermediate Step: FUI
(France, UK & Ireland)Baltic
pEuropean Countries grouped in 7 Regions(9th ‐10th Florence forum, 2002‐2003)
Central West
Central East
3rd Energy Package, Art. 6 (June 2009) → New impetus to foster regional cooperation
South WestSouth EastOil‐spread model:
Neighboring regions and countries link‐up d ll t th CWE N di k t
C t l S thA pan European market will emerge
gradually to the CWE‐Nordic core market
• Introduction • Electricity Market Deregulation History • Electricity Market Objectives & Models
• Future Challenges • Effects of RES Integration ‐ Smart Grids • ConclusionsSymposium on Telecommunication, Energy, Environment & Development, Thessaloniki, Nov. 25, 2010 23/20
Central SouthA pan‐European market will emerge
A. G. Bakirtzis “Smart Grid and the European Energy Policy”
Electricity Markets of the Futureect c ty a ets o t e utu eRoadmap to European Market Integration
The Oil‐spread Model
400 TWh≈ 450 TWh
2010
2011
The Oil spread Model
25 TWh400 TWh
2011
2012
600 TWh
40 TWh
150 TWh25 TWh
2013
2014
650 TWh
100 TWh
1250 TWh≈ 2500 TWh≈ 3000 TWh≈ 3100 TWh≈ 3300 TWh≈ 3500 TWh
55 TWh
2015
onwards
300 TWh 350 TWh
55 TWh
≈ 200 TWh
• Introduction • Electricity Market Deregulation History • Electricity Market Objectives & Models
• Future Challenges • Effects of RES Integration ‐ Smart Grids • ConclusionsSymposium on Telecommunication, Energy, Environment & Development, Thessaloniki, Nov. 25, 2010 24/20