electricity system ? Joachim Bertsch, Christian Growitsch, Stefan - PowerPoint PPT Presentation

Do we need an additional flexibility market in the electricity system ? Joachim Bertsch, Christian Growitsch, Stefan Lorenczik, Stephan Nagl Institute of Energy Economics, University of Cologne

Background • EU goal: 80 % of renewables in 2050 • Majority: Wind and photovoltaics  Stochastic electricity generation Two major impacts: • Capacity mix has to be flexible enough • Sufficient backup capacities needed

Background Discussion of implications for backup capacities and capacity mechanisms (e.g. Cramton and Stoft 2008, Joskow 2008 etc.) Lamadrid et al. (2011) propose a “new market for ramping services” CAISO discusses ramping product (Xu and Threteway 2012)  Is there a need for an additional flexibility market?

Methodological approach (I) Integrated system modelling • Contribution of all parts of the electricity system, leading to interdependencies between different flexibility sources • Inter-temporal dependencies (dispatch and investments) Previous research • Changes in optimal capacity mix from base to peak-load capacities (Nicolosi 2010, De Jonghe et al. 2011 etc.) • Utilization rate rather than operational constraints determine investments into peak-load capacities (Nicolosi 2012)

Methodological approach (II) Linear dispatch and investment model DIMENSION • Object function minimizing total system costs • Cost-efficient capacity and generation mix Additions to previous literature • Considering large deployment of renewables (EU goals) • Renewables-dependent balancing power • Demand side reactions • CCS power plants with detachable CCS unit

Flexibility within the model Ramping / Start-up constraints (depending on characteristics of technology) Positive and negative balancing power provision (depending on expected wind and photovoltaics feed-in) positive negative - Ramping of thermal power plants in part load - Thermal power plants in operation (ramping operation down) - Start-up of technologies (OCGT) - Storage technologies - Utilization of stored energy or stop of storage - Curtailment of wind power - Shifting through demand side management - Shifting through demand side management (reduction) (increase) - Utilization of previously curtailed wind power - Switching off CCS unit to increase power output

Results: Changes in residual load GW GW Residual load duration Hourly changes of residual load 100 100 80 80 60 60 40 40 20 20 0 0 -20 -20 -40 -40 0 4380 8760 -20000 -10000 0 10000 20000 MW h DE 2050 DE 2020

Results: volatility of residual load Positive Negative 2006 2011 2020 2050 2006 2011 2020 2050 Mean 2230 2242 3083 4105 -1753 -1853 -2604 -3656 Standard deviation 2092 2148 2572 3373 1332 1420 1922 2727 Max 11052 11396 14106 22775 -6273 -8016 -12069 -18984

Results: European capacity and generation mix GW TWh 5.000 2.500 4.500 2.000 4.000 3.500 3.000 1.500 2.500 1.000 2.000 1.500 500 1.000 500 0 0 2000 2008 2020 2030 2040 2050 2000 2008 2020 2030 2040 2050

Results: Availability of balancing power MW Positive balancing power availability in June 2020, Germany 30.000 25.000 20.000 15.000 10.000 5.000 0 Mon Tue Wed Thu Fri Sat Sun OCGT Storage Thermal plants DSM Wind availability CCS Flexibility requirement MW Negative balancing power availability in June 2020, Germany 50.000 40.000 30.000 20.000 10.000 0 Mon Tue Wed Thu Fri Sat Sun Storage Thermal plants DSM Wind availability CCS Flexibility requirement

Conclusion • Main trigger for investments are backup capacities • Cost-efficient backup capacities are flexible (e.g. gas turbines) • Under system adequacy, flexibility never poses a challenge in a cost-minimal capacity mix Any Market design providing incentives in cost-efficient generation technologies provides flexibility as an inevitable complement.

Backup

Literature • Capros, P., Mantzos, L., Tasios., N., DeVita, A., Kouvaritakis, N., 2010. Energy Trends to 2030 — Update 2009. Tech. rep., Institute of Communication and Computer Systems of the National Technical University of Athens. • Cramton, P., Stoft, S., 2008. Forward reliability markets: Less risk, less market power, more efficiency . Utilities Policy 16, 194 – 201. • Davison, J., 2009. The need for flexibility in power plants with ccs. • De Jonghe, C., Delarue, E., Belmans, R., D’haeseleer , W., 2011. Determining optimal electricity technology mix with high level of wind power penetration. Applied Energy 88, 2231 – 2238. • Denholm, P., Hand, M., 2011. Grid flexibility and storage required to achieve very high penetration of variable renewable electricity. Energy Policy 39, 1817 – 1830. • ENTSO-E, 2011. Yearly electricity consumption data for Europe. URL https://www.entsoe.eu/index.php?id=92 • EWI, 2011. Roadmap 2050 - a closer look. Cost- efficient RES-E penetration and the role of grid extensions. Tech. rep., M. Fürsch, S. Hagspiel, C. Jägemann, S. Nagl, D. Lindenberger (Institute of Energy Economics at the University of Cologne) L. Glotzbach, E. Tröster and T. Ackermann (energynautics).

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Literature • Joskow, P., 2008. Capacity payments in imperfect electricity markets: Need and design. Utilities Policy 16, 159 – 170. • Lamadrid, A., Mount, T., Thomas, R., 2011. Integration of Stochastic Power Generation, Geographical Averaging and Load Response. WP 2011-09, Charles H. Dyson School. • Luickx, P. J., Delarue, E., D’haeseleer , W., 2008. Considerations on the backup of wind power: Operational backup. Applied Energy 85, 787 – 799. • Martens, P., Delarue, E., D’haeseleer , W., 2011. A Mixed Integer Linear Programming Model for A Pulverized Coal Plant With Post-Combustion Carbon Capture. WP EN2011-01, TME Working Paper - Energy and Environment, KU Leuven Energy Institute. • Möst, D., Fichtner, W., 2010. Renewable energy sources in european energy supply and interactions with emission trading. Energy Policy 38, 2898 – 2910. • Nagl, S., Fürsch, M., Jägemann, C., Bettzüge, M., 2011. The economic value of storage in renewable power systems - the case of thermal energy storage in concentrating solar plants (Working Paper No. 11/08) Institute of Energy Economics at the University of Cologne. • Nicolosi, M., 2010. Wind power integration and power system flexibility - an empirical analysis of extreme events in germany under the new negative price regime. Energy Policy 38, 7257 – 7268.

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