Large scale Utilization of Wind Power - Preconditions and Assumptions

Transcription

1 Large scale Utilization of Wind Power - Preconditions and Assumptions Photos: DONGEnergy A/S 1 Risø DTU, Technical University of Denmark Professor Risø DTU 14/1/9

2 The Scene is Set EU Targets in place: by EU ETS is approved Emissions of Greenhouse gases to be reduced by % compared to 199 EU Renewables Directive is approved % of Final Energy Consumption to be supplied by Renewables and Wind Power will be an important contributor % Energy Conservation by 1% of Transport fuels have to be supplied by Renewables Risø DTU, Technical University of Denmark 14/1/9

3 National RES Target Denmark Lithuania Latvia Sweden Finland Estonia United Kingdom Spain Slovenia Slovak Romania Portugal Poland Netherlands Malta Luxembourg Italy Ireland Hungary Greece Germany France Czech Republic Cyprus Bulgaria Belgium Austria % 1% % 3% 4% 5% 3 Risø DTU, Technical University of Denmark Share 5 Target 14/1/9

4 Future Challenges Medium term Volatility in prices might be a barrier towards future investments Delaying the necessary process towards a sustainable energy system Longer term Integration of Wind Power into the energy system is a pressing matter Do we have the right market set up? 4 Risø DTU, Technical University of Denmark 14/1/9

5 Future Support System Feed-in tariff and Large Scale deployment of Wind Power does not go well together In Denmark % of power production should be taken out of the market A Market Compatible System is needed Premium System: Spot Price plus an adder Green Certificate System could also do the job, if defined for a large geographical area 5 Risø DTU, Technical University of Denmark 14/1/9

6 14/1/9 6 Risø DTU, Technical University of Denmark Prices $ /b b l Oilprice, 1,, 3, 4, 5, 6, D K K / M W h Nord Pool Spot Price, 5, 1, 15,, 5, 3, 35, /t C O EU CO allowance price

7 Prices 6, 5, Nord Pool Spot Price l b /b $ h 4, W / M 3, K D, Volatility will probably be an Oilprice 1,, integral part of the future system, simply because we are moving on a knife edge. 35, We are in a significant 3, transition 5, period and marginality will be the, /t C O 15, 1, EU CO allowance price rule rather than the exception ,, 7 Risø DTU, Technical University of Denmark 14/1/9

8 Wind Power Compared to Natural Gas Power Plant h 6 W 5 / M Natural gas Natural gas Natural gas Wind (4$/bbl) (6$/bbl) (1$/bbl) Power coastal site Wind Power inland site Regulation costs CO 5 /t Basic 8 Risø DTU, Technical University of Denmark 14/1/9

9 Wind Power Compared to Coal Fired Power Plant h 5 W 4 / M 3 1 Regulation costs CO Basic 9 Risø DTU, Technical University of Denmark 14/1/9

10 Determination of the Power Price Supply DKK/ MWh Demand Condensing plants and Gasturbines CHP plants Nuclear and Wind 1 Risø DTU, Technical University of Denmark MWh 14/1/9

11 The Consequence of CO on Power Price Supply DKK/ MWh Demand Condensing plants and Gasturbines CHP plants Nuclear and Wind 11 Risø DTU, Technical University of Denmark MWh 14/1/9

12 The Consequence of Fuel price increase on Power Price Supply DKK/ MWh Demand Condensing plants and Gasturbines CHP plants Nuclear and Wind 1 Risø DTU, Technical University of Denmark MWh 14/1/9

13 Where are we now? Price volatility increases the risk for investors Wind Power constitutes a firm component in the Power Industries portefolio However low fuel prices might imply losses for wind power investments ETS market will not by itself generate the needed economic incentives for large scale deployment of wind power Specific support schemes are needed The closer we relate support to the power market price the higher will be the required risk premium to investors 13 Risø DTU, Technical University of Denmark 14/1/9

14 Determination of the Power Price, when the wind is high Supply DKK/ MWh Demand Condensing plants CHP plants Nuclear and Wind 14 Risø DTU, Technical University of Denmark MWh 14/1/9

15 Wind Power and Spot Prices at present Spot Price DKK/MWh Low wind Variation due to wind High wind Hours 15 Risø DTU, Technical University of Denmark 14/1/9

16 Wind Power and Spot Prices high penetration of wind power Spot Price DKK/MWh Low wind Variation due to wind High wind Hours 16 Risø DTU, Technical University of Denmark 14/1/9

17 Wind Power and Spot Prices very high penetration of wind power Spot Price DKK/MWh Low wind Variation due to wind High wind Hours 17 Risø DTU, Technical University of Denmark 14/1/9

18 A Market Problem? Will the market initiate the necessary investments in new capacity and storage facilities? More transmission capacity to other countries New domestic capacity, preferably fast reacting natural gas combined cycle plants or gas turbines Medium term storage facilities (batteries, hydrogen etc.) Medium term possibilities for switching off power consumption at selected locations 18 Risø DTU, Technical University of Denmark 14/1/9

19 The Importance of Wind Power Fulfilling its Bid Wind Power MW Wind Power Prediction Uncertainty on Wind Power Production hour 19 Risø DTU, Technical University of Denmark 1-36 hours Time 14/1/9

20 Better Predictions Wind Power MW Wind Power Prediction Uncertainty on Wind Power Production hour Risø DTU, Technical University of Denmark 1-36 hours Time 14/1/9

21 Shorter bidding periods Wind Power MW Wind Power Prediction Uncertainty on Wind Power Production hour -5 hours 1 Risø DTU, Technical University of Denmark Time 14/1/9

22 Continuously bidding Wind Power MW Wind Power Prediction Uncertainty on Wind Power Production hour 8 hours Time Risø DTU, Technical University of Denmark 14/1/9

23 Conclusions Wind power is going to be a significant part of the future energy system 1% of Global electricity consumption today 5% in 5 Price volatility on fuel markets might increase the risk premium for investments in wind power in the short term Electricity markets are not developed to technologies with variable output In the longer term new market designs could improve the integration of wind power 3 Risø DTU, Technical University of Denmark 14/1/9