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Windmills – over time…
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Windmills – over time…
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Windmills – over time…
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EU wind capacity in MW
Installed 2014
End 2014 Installed 2015
End 2015
Denmark 104.9 4881.7 216.8 5063.8France 1042.1 9285.1 1073.1 10358.2Germany 5242.5 39127.9 6013.4 44946.1Poland 444.3 3833.8 1266.2 5100Spain 27.5 23025.3 -‐ 23025.3Sweden 1050.2 5424.8 614.5 6024.8Norway 48 819.3 22.5 837.6
Source: EWEA: Wind in power, 2015 European statistics, February 2016
Denmark has one of the largest share of wind power use in the world - in 2013 33.2 percent of the Danish electricity consumption was covered by wind.
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Source: EWEA: Wind in power, 2015 European statistics, February 2016 6
Current statistics
• In 2015 across the 28 EU member states, wind accounted for:
• 44% of all new power installations, • connecting a total of 12.8GW to the grid• 9,766MW in onshore and 3,034MW offshore. • The volume of new installations was 6.3% higher as compared with 2014.• Total wind capacity in Europe now stands at 142GW and covers 11.4% of Europe’s electricity needs. (2016, EWEA)
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European targets
• 2020 renewable energy targets• The EU's Renewable energy directive sets a binding target of 20% final energy consumption from renewable sources by 2020. To achieve this, EU countries have committed to reaching their own national renewables targets ranging from 10% in Malta to 49% in Sweden.
https://ec.europa.eu/energy/en/topics/renewable-‐energy 8
Wind energy – challenges
• “Merit order effect”• Increased price volatility• Increased wear and tear• Balancing issues• Towards the European Balancing Market• “[…] a cross border balancing market will help to counteract the effects of intermittent generation and allow the integration of more renewable energy sources”.
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“Merit order effect”
• Price-‐reduction effect of wind power due to displacing of expensive generation with cheap wind.• Demonstrated for Spain (Gil et al. 2012), Germany (Ketterer 2014), Denmark (Jacobsen and Zvingilaite 2010), California (Woo et al. 2016) and many others• Adverse effect on conventional power plants -‐> capacity markets
-‐> weaker investment incentive for CCGT plants (Steggals et al. 2011)
• Lower income for renewable generation -‐> the relative market value of renewables decreases with higher intermittent shares (all else being equal) (Hirth 2013) (their income per generated unit of electricity relative to the average market price decreases)
http://www.nasdaqomx.com/digitalAssets/86/86050_npspotjune112013.pdf11
Increased price volatility
• Residual load is usually more volatile than the demand alone (Green and Vasilakos 2010)• With a sufficiently large share of wind generation, hourly wind output volatility would have a strong influence over wholesale spot prices. (G&V)• Negative prices are supposed to incentivize the restructuring of the power system: inflexible plants pay for producing while demand storage and demand management could bring benefits
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Increased wear and tear
• The frequent start-‐ups and shut-‐downs put a strain on conventional generators -‐-‐> frequent failures or increased needs for maintenance compared to when wind power is not part of the energy mix (Troy et al., 2010; Troy, 2011;). • The cost of operating the power system as a whole increases already at the 10% of wind power penetration (Georgilakis 2008). • It is increasingly difficult to put one number on the costs related with frequent start-‐ups and shut-‐downs of the conventional power plants. • for e.g. a gas unit has been found to range from $300 to $80,000 in the operation and maintenance costs
• “(…) uncertainty surrounding cycling cots can lead to these costs being under-‐estimated by generators, which in turn can lead to increased cycling” (Troy 2011).
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Balancing
• Imbalances due to intermittent power increase, so number of unscheduled flows rises• Currently TSOs are starting up the process of defining the rules of cooperation.• Network codes on balancing and reserves have recently been developed by ENTSO-‐E
European network of transmission system operators for electricity 14
https://www.entsoe.eu/Documents/Network%20codes%20documents/Implementation/Pilot_Projects/pilot_projects_map.png
TERRE: Trans-‐European Replacement Reserves Exchange established between UK, France, Spain, Portugal, Italy, Switzerland and Greece
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Cooperative balancing
• Exchange of reserves allows for cost arbitrage • Makes it possible to procure part of the required level of reserves in adjacent zone/area but these reserves are exclusively for one TSO -‐ they cannot contribute to meeting another TSO’s required level of reserves. • Expensive reserves can be substituted for cheaper
• Reserves sharing allows both cost arbitrage and variance reducing pooling of reserve needs• Allows multiple TSOs to take into account the same reserves to meet their reserve requirements resulting from reserve dimensioning.• Less reserve capacity is needed• Expensive reserves can be substituted for cheaper
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Thank you.
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Literature
• Woo C.K., Moorse. J, Schneiderman B., Ho. T., Olson, A., Alagappan. L, Chawla. K., Toyama. N., Zarnikau. J., Merit-‐order effects of renewable energy and price divergence in California’s day-‐ahead and real-‐time electricity markets. Energy Policy, V 92, May, 2016, pp. 299 – 312.
• Nicolosi, M., Wind power integration and power system flexibility–An empirical analysis of extreme events in Germany under the new negative price regime, Energy Policy. 3. 2010. pp. 7257 – 7268.
• Steggals, W., Gross. R., Heptonstall, P. Winds of change: How high wind penetrations will affect investment incentives in the GB electricity sector. Energy Policy, 39, 2011, pp. 1389 – 1396.
• Baldursson, F. M., Lazarczyk, E., Ovaere, M., & Proost, S. 2016a. Cross-‐border Exchange and Sharing of Generation Reserve Capacity. IAEE Energy Forum. July.
• Baldursson, F. M., Lazarczyk, E., Ovaere, M., & Proost, S. 2016b. Multi-‐TSO system reliability: Cross-‐border balancing. IEEE International Energy Conference (ENERGYCON).
• Fogelberg, S., Lazarczyk, E., 2015, Wind Power Volatility and the Impact on Failure Rates in the Nordic Electricity Market, IFN Working Paper 1065.
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Literature• Hirth, L., 2013. The market value of renewables: the effect of solar and wind power variability on their relative price. Energy
Economics. 38. pp. 218 – 236. • Gil H.A., Gomez-‐Quiles, C., Riquelme, J., 2012, Large scale wind power integration and wholesale electricity trading benefits:
Estimation via ex post approach Energy Policy 41. pp. 849 – 859. • Ketterer 2014, The impact of wind power generation on the electricity price in Germany. Energy Economics. 44. pp. 270 – 280. • Jacobsen and Zvingilaite, 2010, Reducing the market impact of large shares of intermittent energy in Denmark. Energy Policy.
38(7). 3304-‐ 3413. • Georgilakis, P.S. (2008). “Technical challenges associated with the integration of wind power into power systems.” Renewable and
Sustainable Energy Reviews 12, pp. 852-‐863.• Kumar, N., Besuner, P., Lefton. S., Agan, D. and D. Hilleman (2012). “Power plant cycling costs.” NREL. Accessed on April 13th 2015
from http://www.osti.gov/scitech/biblio/1046269• Troy, N., Denny, E. and M. O’Malley (2010). “Base-‐load cycling on a system with significant wind penetration.” IEEE Transactions on
power systems 25, pp. 1088-‐1097• Troy, N. (2011). Generator cycling due to high penetrations of wind power. Doctoral Thesis, School of Electrical, Electronic and
Communications Engineering, University College Dublin, Ireland.• Kumar, N., Besuner, P., Lefton. S., Agan, D. and D. Hilleman (2012). “Power plant cycling costs.” NREL. Accessed on April 13th 2015
from http://www.osti.gov/scitech/biblio/1046269• Green, R., Vasilakos, N., 2010, Market behaviour with large amounts of intermittent generation. Energy Policy. 38. pp. 3211 – 3220.
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Sources for images
• https://en.wikipedia.org/wiki/Windmill• http://www.lehuaparker.com/2014/06/18/tilting-‐at-‐windmills/• https://en.wikipedia.org/wiki/History_of_wind_power#Antiquity
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