The integration of wind energy when paving the way for renewables in Germany

Transcription

1 The integration of wind energy when paving the way for renewables in Germany EER Academic Seminar No. 6 COPENHAGEN (DTU) 6 NOVEMBER 2015

2 Agora Energiewende Who we are Think Tank with 20 Experts Independent and non-partisan Project duration Financed with 14 Mio. Euro by Mercator Foundation & ECF Mission: How do we make the energy transition in Germany a success story? Methods: Analyzing, assessing, understanding, discussing, putting forward proposals, Council of Agora

3 Agora Energiewende How we work Stakeholder Team of Agora Council of Agora Impulse Team Germany Director Team Europe Central Services Impulse Regular exchange and changing advisory committees in different projects Studies, public events etc. Internal discussion and exchange of the 28 permanent members

4 Agora Energiewende Council of Agora Holger Krawinkel Prof. Dr. Klaus Töpfer Science Chair Dr. Hildegard Müller Public Utilities Dr. Patrick Graichen Federal Politics Dr. Martin Iffert Energy Sector Energy-Instensive Industry 27 Mitglieder StS Rainer Baake Dr. Boris Schucht Renewable Energies Regional Politics Min Franz Untersteller Grid operators Regine Günther Sales Environmental Associations Federal Authorities Trade Unions European Union Wolfgang Lemb

5 The Energiewende in the power sector in a nutshell

6 The Energiewende means fundamentally changing the power system Gross electricity generation 1990, 2014 und 2050 Phase out of Nuclear Power Gradual shut down of all nuclear power plants until 2022 Reduction of Greenhouse Gas Emissions Reduction targets below 1990 levels: - 40% by 2020; -55% by 2030; - 70% by 2040; - 80% to -95% by 2050 Development of renewable energies Share in power consumption to increase to: 40-45% in 2025; 55-60% in 2035; 80% in 2050 AGEB (2015a), BReg (2010), EEG (2014), own calculations * preliminary Increase in efficiency Reduction of power consumption compared to 2008 levels: -10% in 2020; -25% in

7 The Energiewende implies a new energy world characterized by flexibility, decentralized structures and a wide variety of actors Illustrative visualization of the old and the new electricity system Hochspannung Mittelspannung Niederspannung Own illustration 7

8 Changes in the power sector State of affairs 2015

9 Renewables are the most important source in the electricity system followed by lignite and hard coal Share in gross electricity generation by fuel 2014 Gross electricity generation by fuel AGEB (2015a) * preliminary AGEB (2015a) * preliminary 9

10 Nuclear phase out until 2022 with renewables overcompensating the loss in nuclear power Gross electricity generation of nuclear and renewables Chernobyl Chernobyl 1. Nuclear 1. Nuclear phase-out phase-out Fukushima Fukushima Start Start Anti-Nuclear Anti-Nuclear Movement Movement Withdrawal Withdrawal of of the the 1. Nuclear 1. Nuclear phase-out phase-out 2. Nuclear 2. Nuclear phase-out phase-out AGEB (2015a), AGEE (2015), BNetzA (2014), Statistisches Jahrbuch der DDR ( ), own calculations 10

11 The nuclear phase out is stretched over 20 years Agreed shut down of nuclear power plants according to nuclear phase out law Own illustration based on energytransition.org (2014) 11

12 Greenhouse gas emissions are currently at -26% compared to 1990 levels with the energy sector being the largest emitter Greenhouse gas emissions by sector and climate targets AGEB (2015a), UBA (2015), own calculations * preliminary 12

13 The Renewable Energy Act aims at increasing the share of renewables to 40-45% by 2025 and 55-60% by 2035 Share of renewable energies in gross electricity consumption and targets AGEB (2015a), EEG (2014) * preliminary 13

14 Key power trends : Nuclear, natural gas and consumption decline, renewable energies, exports and lignite increase Changes in gross electricity generation, consumption and exchange balance, * AGEB (2015) * preliminary 14

15 Since 2001, Germany has produced more electricity than it consumes 2014 marked a new record with 6% of power production being exported to neighbouring countries Gross electricity generation and gross electricity consumption AGEB (2015a) * preliminary 15

16 The Energiewende is based on a broad consensus - public discussion mostly on concrete implementation Voting results in the Bundestag on Energiewende Public opinion on Energiewende 2015 Deutscher Bundestag (2011) BDEW (2015a) 16

17 The Key Insight: It s all about Wind and Solar!

18 MW Wind Energy has become a mature technology, with wind turbines of 2-3 MW being standard Size development of wind turbines : up to 3.0 MW : up to 0.1 MW 1995: up to 0.3 MW 2000: up to 0.8 MW 2005: up to 1.5 MW 2010: up to 1.8 MW IEA (2013) 18

19 Due to falling module prices, feed-in tariffs for solar PV dropped massively in the last 10 years - and the end of the cost digression is not yet reached Average PV feed-in tariff for new installations Expected cost digression for large-scale PV ZSW et. al (2014), own calculations Fraunhofer ISE (2015) 19

20 The key insight for the Energiewende: It s all about wind and solar! Gross electricity generation of renewable energies : AGEB (2015a); : own calculation on basis of BNetzA (2014)/BNetzA (2015b) * preliminary 20

21 Which kind of actors have evolved while technology has been developing? Example: Wind energy in Germany Types of wind projects So-called Hofanlagen in the vicinity of buildings at the early beginnings in the 90ies. + Bürgerwindpark citizens wind farms & cooperatives. + Project developers. + Turnkey solutions/ funds and revisions (last revision: 2014) Feed-in Law Renewable Energy Act + Investors & institutional actors (banks, investment companies, ). 21

22 With wind and solar, the new power system will be based on two technologies that completely change the picture Gross electricity generation of renewable energies Electricity generation and consumption in a sample week 2023 GW Specific characteristics of Wind and Solar PV 1 Intermittent 2 High capital costs 3 Very low variable cost AGEB (2015a), BNetzA (2014), BNetzA (2015b), own calculations Potential for other project developers due to smaller project sizes than largescale power stations. Fraunhofer IWES (2013) Potential for innovation! 22

23 Wind integration- Key challenges related to the grid

24 Grid Expansion: Transmission and distribution grids. Expansion of the transmission grid from North to South. Installed wind capacity (103 GW, Scenario Best Sites ) 2033 Planned transmission grid extensions until 2022 Wind power will be installed mainly near the coast in the north of Germany, but consumption centers are located in the south. Additional power lines are necessary to transport wind electricity from north to south. Acceptance issue: prioritization of cable undergrounding and compensation measures. In 2016, the government will propose a new grid development plan which will enable to use underground cables whenever necessary. Fraunhofer IWES (2013) Bundesbedarfsplangesetz (2013) Curtailment of wind (and solar PV) especially in the north. 70% of measures due to congestions in distribution grid in 2013: 555 GWh in total (<1%). Curtailment of RES-E based on 13(2) EnWG amounted to 13 GWh in New: 3% approach! Electricity Market Law 24

25 Excurses: Physical flow and price difference on the interconnection between Western Denmark and Germany Price difference: Price in Western Denmark minus price in Germany. Positive flow: Import to Western Denmark. Negative flow: Export to Germany. Even in 2014 and with implicit market coupling, there were situations with the flow direction being contrary to the direction incentivised by price differences. This is likely due to subsequent arrangements in the markets for ancillary services. Source: Ea Energy Analysis (2015). 25

26 Grid reliability: Provision of ancillary services by renewables. The German electricity system is characterized by high system stability. System Average Interruption Duration Index (SAIDI)* in Europe 2013 CEER (2015) * without exceptional events 26

27 Provision of ancillary services: Example of regulatory interplay for German wind power Renewable Energy Act (EEG) Reference to Ancillary Services Ordinance ( 9(6) EEG). Ancillary Services Ordinance (SDLWindV, 2009): Obligatory for wind turbines grid connected after 31 st March E VDE-AR-N 4120 Technical grid connection requirements for 110 kv (high voltage) level. VDE-AR-N 4110 Technical grid connection requirements for medium voltage level. VDE-AR-N 4105 Technical grid connection requirements for low voltage level. German regulation NCRfG Network Code on Requirements for Grid Connection Applicable to all Generators DCC Demand Connection Code European level Source: S. Ropenus, own elaboration In addition in German regulation: Transmission Code 2007

28 Wind integration - Key challenges related to the market and support schemes

29 Feed-In Tariff(s) Just one or how many? Technology Feed-in tariff level Annual degression Wind onshore 8.9 ct/kwh (initial feed-in tariff for at least 5 years) ct/kwh (basic feed-in tariff). 0.4% on a quarterly basis (flexible cap: degression may increase up to 1.2% depending on higher net increase in capacity; degression may decrease to zero if too little is deployed as compared to target). Photovoltaics 9.23 ct/kwh to ct/kwh, depending on installed capacity size. 0.5% on a monthly basis (flexible cap: degression may increase up to 2.8% depending on higher gross increase in capacity; degression may decrease to zero if too little is deployed as compared to target). Wind offshore 15.4 ct/kwh (initial feed-in tariff at least 12 years). 3.9 ct/kwh (basic feed-in tariff). Degression of initial feed-in tariff: of 0.5 ct/kwh in 2018, of 1.0 ct/kwh in 2020, by 1.0 ct/kwh annually from Biomass/ biogas 5.83 ct/kwh to ct/kwh, depending on specific technology and installed capacity size. 1.5% on an annual basis for landfill gas, sewage treatment gas and mine gas. 0.5% for biomass on a quarterly basis (flexible cap: degression of 1.27% if annual gross increase > 100 MW). Hydropower 3.5 ct/kwh to ct/kwh, depending on capacity size. 0.5 % on an annual basis.

30 Challenge: Power Market Design At the current wholesale power prices, no new power plant can be financed be it fossil or renewable Wholesale electricity prices* Reasons for the decline in power prices CO 2 price dropped: CO 2 prices in the EU Emissions Trading system dropped since 2008 by around 70% due to high amount of excess certificates Falling resource prices: Coal prices decreased by a third since 2008 Merit-Order-effect: Increasing power production of renewables is pushing expensive power plants out of the market Decreasing demand: Power demand is continuously falling since 2007 (-5% by 2014) Excess capacities: Large quantities of lignite and coal power plants are pushing gas power plants out of the market EEX (2015) * rolling annual futures 30

31 On the way to a new Electricity Market Law (Strommarktgesetz) Green Paper White Paper Strommarktgesetz (Electricity Market Law) October 2014 July 2015 Fall Summer 2016 (July) Referentenentwurf Entwurf eines Gesetzes zur Weiterentwicklung des Strommarktes (Strommarktgesetz) 31

32 Flexibility is the paradigm of the new power system baseload capacities are not needed any more Electricity generation and consumption in a sample week with 50% RES share Competition between flexibility options Flexible fossil and bioenergy power plants (incl. CHP) Grids and transmission capacities for exports/imports Demand Side Management Storage technologies (batteries, powerto-gas) Integration of the power, heat and transport sectors (power-to-heat, electric cars) Own calculations on basis of Agora Energiewende (2015b) 32

33 Market Model 2.0: Reliance on Energy Only Market (EOM) + new reserves to secure supply in extreme situations ( belt and braces approach ) Netzreserve ( Grid Reserve ) Security of supply and grid INTERPLAY reliability (accounting for congestions in the grid) Climate and capacity reserve Security of supply (after market closure) Capacity reserve: auction Transition period: additional function of climate reserve to contribute to reduction in emissions New! 33

34 Climate reserve - Implementation 34

35 Onshore wind high deployment, question of future development Onshore wind installed......in 2014: 4,750 MW gross installation (by comparison: corridor with net deployment of 2,500 MW) => 38 GW in total...in the first half of 2015: 1,185 MW (gross deployment; net: 1,093 MW). 42 GW onshore wind expected by industry at the end of Support: Classical feed-in tariff. EEG revision last year: Direct marketing & Contract for Difference. Offshore wind:...initially, there were some obstacles due to new technology and challenges specific to offshore wind in Germany (deep sea, high distance to shore) => initial 10 GW target by 2020 reduced to 6.5 GW....in the first half of 2015: 422 offshore wind turbines (1,765 MW) got grid connected. In total there are 668 offshore wind turbines with a total capacity of 2,778 MW. Change to tendering scheme as of

36 Challenge: Power Market Design The government is planning to propose in 2016 both a new power market law and a new renewable energy law Schematic diagram of the governments envisaged power market design Coordinate supply and demand Guarantee security of supply and build up of renewables Reaching climate targets Own illustration Power Market 2.0 (complemented by flexible markets for balancing energy) Resource Adequacy Capacity reserve (partly consisting of old lignite power plants) Renewables Auctions for large wind- and solar power plants, feed-in tariffs for small scale RES EU Emissions Trading Power Market 2.0 Power market is to become highly flexible, so as to continuously let fossil power plants, renewables, demand and storage interact with each other Resource Adequacy Peak prices in times of scarcity are to refinance fossil backup power plants; for emergency situations, a capacity reserve is installed Renewables Renewables receive 20year-market premium, support level for large wind and solar power farms is to be determined by auctions as of 2017 EU Emissions Trading CO 2 price is to be restored through ambitious EU ETS reform including enhanced market stability reserve and higher emission reduction factor 36

37 Common Challenges opportunity for exchange of knowledge

38 Lessons Learned and Energy Transitions Denmark den grønne omstilling Objective: 100% renewables across all energy sectors in 2050 (fossil fuel-free system). 50% wind share in electricity consumption by 2020 (already in 2014: 39%). Germany die Energiewende Objective: More than 80% renewables in electricity consumption by % renewable share in electricity consumption by Transition from a fossil fuel-based towards a renewable energy based system with increasing shares of variable renewable generation. Transition from a fossil fuel-based towards a renewable energy based system with increasing shares of variable renewable generation. Strong integration with the heating sector (CHP), role of wind & biomass. Wind and solar PV as main pillars. 38

39 Agora s Lessons Learned from Denmark Series Event 1: Renewable Energy Integration and Flexibility 24 th September 2015 in Berlin Wind power integration and the Danish flexibility experience - Report by Ea Energy Analysis Role of the heat sector System integration of wind energy Deep Dives Interconnection and cross-border market integration Event 2: Future Paths of Renewables Scenarios, the Grid and Support Schemes 12th of November in Berlin *Save the Date* - Policy Paper by Agora & DTU Management Engineering Scenarios for the future energy system and the integrated Danish approach Grid expansion and system reliability Support schemes and tendering of offshore wind 39

40 Agora Energiewende Rosenstraße Berlin T +49 (0) F +49 (0) Thank you for your attention! Questions or Comments? Feel free to contact me: stephanie.ropenus@agora-energiewende.de Agora Energiewende is a joint initiative of the Mercator Foundation and the European Climate Foundation.