2012-10-26 1 Levelised costs of renewable Energy – a system operator perspective (draft slides)

Levelised costs of renewable Energy – a power system operator perspective Conference on Levelised Costs of Renewable Energy, IEA-RETD and IRENA-RETD, Bonn, October 26’th 2012

Anders Bavnhøj Hansen,

Chief consultant

Strategic Planning

Energinet.dk, Denmark

E-mail: abh@energinet.dk

2

Denmark situated in a windpower area

Electricity

transmission

Gas

transmission

3

Energy strategy in Denmark

Political targets:

• 2020: 50% of traditional electricity

consumption covered by windpower

(decision supported by 95% of parliament)

• 2035: All electricity and heat based on

renewable energy

(governmental position)

• 2050: The total* energy supply based on

renewable energy

(target supported by 95% of parliament)

*Total energy system incl. transport, industry etc.

A holistic aproach when power system is planned

2012-10-26

4

Levelised costs of renewable Energy – a system operator perspective (draft slides)

Wind

Photovoltaic

Wave..

Solar heat

Geothermal

Electric

(light, it,

process..)

Transport

Industry

proces and

materials

Heating

Power

Liquid

fuels

District

heat

Biomass

Bio residues

Waste

Energy

ressources (RE)

RE-gas

Energy carriers in system Energy services

0

200

400

600

800

1000

1200

1400

Wind Sun Wave Heat(sun, geo. and

heat pump)

Biomass andwaste (incl.

slurry)

PJ

per

ye

ar

Used today (2008)

Potential

2050 (recommendation)

5

Domestic renewable resources to reach 100% renewable energy by 2050 Danish Commission on Climate Change Policy, 2010

Fluctuating

power production

Gross energy consumption in

Denmark2011

Gross energy consumption 2050

Energinet.dk

analysed high

wind scenario

Wind scenario

2012-04-23

Analysed scenarios for energy system

6

0

100

200

300

400

500

600

700

Wind-

scenario

Bio-

scenario

CDM-

scenario

CCS-

scenario

PJ/

year

Bio-massimport

Cleandev. mech(CDM)

CCS

Oil

Coal

Natural gas

Bio, waste, geotherm.

Wind, photovolt and

wave

Gross energy for total energy supply in DK 2050

2012-10-26 7 Levelised costs of renewable Energy – a system operator perspective (draft slides)

From 20 % to 50 % Wind power in 2020 – a challenge to balance

A need for resources to balance fluctuating wind-power International integration of energy systems Integration with gas, heat and transport

DK West January 2008 Demand and Wind power January 2008 + 3,000 MW

0

500

1000

1500

2000

2500

3000

3500

4000

4500

Wind power Demand

0

500

1000

1500

2000

2500

3000

3500

4000

4500

Wind power Demand

2050 ?

17 GW wind

4 GW solar

1 GW wave

Electricity demand

2020

Wind

power

Wind

power

2012-10-26 8 Levelised costs of renewable Energy – a system operator perspective (draft slides)

Elforbrug (klassisk) og Fluktuerende produktion

0

2000

4000

6000

8000

10000

12000

14000

16000

18000

20000

1 61 121 181 241 301 361 421 481 541 601 661 721 781 841 901 961 1021 1081 1141 1201 1261 1321

El

(MW

)

Klassisk elforbrug Vind-Bølge-Sol

Example wind scenario long horizon (2050) Fossil independent energy system with wind power as a major energy source (17 GW wind + 4 GW solar + 1 GW wave)

60 days Jan-feb.

Need for peak load capacity – security of supply

Need for integration of windpower – high production hours

Low production wind, photovoltage, wave

Classical cons. Wind, PV

Power consumption and fluctuating production Peak production wind and photo-voltage

Need for

integration of

biomass and

waste in

a volatile power

system

Need for fuels

for non

electrified

services

El. demand

Electricity production costs 2030

2012-10-26 9 Levelised costs of renewable Energy – a system operator perspective (draft slides)

2012-10-26 10 Levelised costs of renewable Energy – a system operator perspective (draft slides)

Costs with 1000 operation hours a year

Electricity price simulated for 2050 in Denmark

2012-10-26 11 Levelised costs of renewable Energy – a system operator perspective (draft slides)

West DK

(€/MWh)

East DK

(€/MWh)

Offshore wind 48 64

Land wind 60 60

Photovoltaic 73Source: Climate commission 2010

DKK/MWh

Levelised costs of renewable Energy – a system operator perspective (draft slides)

2 x 200 MW

Rødsand

Connecting offshore windpower to the grid

Each dot represents a 200

MW offshore wind farm –

supplying 200,000

households with

electricity.

2012-10-26 12

13

50% wind power share in

2020

Transport Gas transmission

Electricity transmission Heat transmission

RE gas & biofuels Conv. elec. generation CHP Heat generation

Electr. consumption

Electricity storage

Neighbouring countries Heat pumps

Electric boilers

Heat storage

Heat consumption

Closer coupling between energy systems

2012-10-26 Levelised costs of renewable Energy – a system operator perspective (draft slides)

14

CH4+C02

International gas infrastrucure

Anaerobic

gassification

(biogas)

Underground storage

(salt caverns) Underground

storage (aquifer)

Upgrading

Methan (CH4)

Distrrict heat (DH)

Elforbrug (klassisk) og Fluktuerende produktion

0

2000

4000

6000

8000

10000

12000

14000

16000

18000

20000

1 61 121 181 241 301 361 421 481 541 601 661 721 781 841 901 961 1021 1081 1141 1201 1261 1321

El

(MW

)

Klassisk elforbrug Vind-Bølge-Sol

International power grid infrastructure

District heat (DH)

Gas

storages

Peak shawing

power

Gasturbine, CC,

Fuelcell etc.

Electricity (at high price)

Electrolysis

Alcalic,

SOEC fuelcell

Electricity (at low price)

H2

Biofuel

Cathalysis

Methanol, DME,

Syn gasoline, H2 etc. District heat (DH)

Biofuel (Methanol, DME, Syn gasoline.)

Biomass

CHP

Biomass

and waste

DH

Thermal

gassification

H2+CO

Biofuel Digest

Ethanol

O2 Heat

PHEV with methanol

fuelcell

DH

Integration of electricity, gas and heat systems

Flexibility in energy systems to integrate wind power (scenario 2050)

Season-storage

Energy-content

=100 GWh

Energyicontent if stored as methan (eksist.

gas storage in cavern/aquifer)

(Energy content if stored as hydrogen)

Storage capacity (input of electricity)

Seconds

Electr. vehicl.

Indiv. heat pump

Heat pump in

district heating

Minutes Hours Days Weeks Months

International integration with hydropower a primary issue for flexibility

Heat pumps and electric vehicles – flexibility for hours

Gas system to deliver further flexibility and security of supply

Gas storage

Conclusions

• RE resources from wind/solar are huge and biomass is a scarce

resource. A need for flexible integration of fluctuating electricty

(wind, solar) with efficient use of biomass and waste

• Long term scenario studies (technical and economical) show that RE

from wind and solar could deliver a high amount of total gross

energy supply if the energy system is designed to cope with

situation.

• Infrastructure investments planned socio economic, based on long

term holistic analysis. Mutual benefit on interconnectors and

offshore grid

• Comprehensive integration of the energy systems

(el/heat/gas/liquid fuel) is needed to solve the challenge. The gas

system can serve as a system integrator. A need for R&D.

• A need for solid market acceptance of renewables delivered through

grid (power and gas) by use of market solutions as RE certificates

• A need for an intelligent energy-system (Smart Grid

TSO/DSO/Enduser-level) and market solutions to handle the

fluctuating power

• If the wind/bio/waste integration could be solved, the solutions

might also be used for solar/bio/waste integrations

2012-10-26 18 Levelised costs of renewable Energy – a system operator perspective (draft slides)

Thank you for your attention