Preparatory Paper on Focal Areas to Support a Sustainable Energy System in the Electricity Sector

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1 Preparatory Paper on Focal Areas to Support a Sustainable Energy System in the Electricity Sector C. Agert, Th. Vogt EWE Research Centre NEXT ENERGY, Oldenburg, Germany corresponding author: The decarbonisation of electricity generation relies on the utilisation of renewable energy; this is the essence of the current transformation of our energy systems towards sustainability. While a dynamic reduction in the cost of the conversion technologies (such as solar cells and wind energy plants) has been achieved over the past few years and their suitability for large-scale deployment has been proven, numerous challenges at the systemic level of future energy provision still remain unresolved. The key issues in this regard are, firstly, that the electricity available from renewable energy at any given time is determined not by the demand but by the weather and, secondly, that the new technologies are characterised by their decentralised nature. It is against this background that the challenges at the technical, economic, regulatory and social levels are defined. The following examples illustrate this: Security of supply How can security of supply be guaranteed in the face of seasonal variations or during phases of low wind lasting for many days in the dark winter months? Electricity market How might an intelligent market design look, which is able to accommodate the natural fluctuation of renewable energy sources as well as taking into account the fact that although wind and solar power require initial investment, their subsequent operating costs are close to zero? Power grid adaptation How can the distribution grids be upgraded to accept the input of large amounts of energy from decentralised sources? How will a geographical balance between consumption and generation on transmission grid level be ensured? Acceptance How can we ensure that the currently high social acceptance for the transformation of the energy sector is maintained? 1

2 The relevant issues cannot be adequately addressed by national strategies due to the high level of integration of the European markets. Possible approaches to finding solutions therefore require an increasingly international perspective. This preparatory paper discusses five sets of interrelated questions that are of central importance at the technical level. The electricity market, legal frameworks and acceptance aspects, together with the currently existing challenges facing research in connection with these topics, are set out in detail in a separate background paper of the German-Dutch Expert Symposium ( A Note on System Integration ). Solution areas relevant to the technical challenges presented by the transformation of the electricity system 1. Reserve capacities / flexible generation It is already the case that large parts of the installed generating capacity are not operated continually, but instead serve to cover peak loads and compensate for outages (e.g. while maintenance work is carried out). Because power generation technologies based on fossil fuels will need to be employed significantly more than previously in operation modes that cover bottlenecks in generation from renewable energy, the proportion of discontinuously operated plants will rise still higher. This gives rise to a variety of challenges, such as: The requirements with regard to the response time of power plants will increase. This favours power plant types that are designed accordingly, such as gas-fired power plants or new types of coal-fired power plants that are currently in development. The ratio of operating cost to investment cost will be shifted in the direction of the investment side, since the annual operating hours of the fossil-fuelled plants will be reduced. This favours power plant types that have a low specific investment cost but which need not necessarily be characterised by high levels of efficiency (e.g. gas turbines). Nevertheless, efforts towards the minimisation/optimisation of CO 2 emissions should also be made here. An adjusted electricity market design should be developed so as to allow the realisation of the appropriate technology portfolio on the part of the fossil reserve capacities in good time. In doing so, particular attention should be given to the long investment cycles on the part of the power plant operators. At the same time, the curtailment of part of the electricity from renewable energy sources will become commonplace; this must also be taken into account in the market design. Moreover, it should be noted that so-called carbon capture and storage (CCS) technologies could be helpful in reducing to the greatest possible extent CO2-emissions from the combustion of fossil energy sources in reserve power plants; these will, however, entail high investment and operating costs. Any evaluation of this technology must also take into account that we are dealing with a transitional technology whose use will be for a limited duration, given that geological disposal sites for carbon dioxide are limited. The potential for alternatives based on biomass is likewise considered to be relatively low, since their uses in the chemicals industry as a substitute for fossil raw materials 2

3 and in the production of fuels for the transport sector take priority over their use for the generation of electricity at this point. 2. Load management / smart grids While, on the one hand, the variation with time of power generated from the sun and wind cannot be influenced, there is, on the other side of the equation, significant potential for flexibility in electricity consumption. Examples of quantitative significance that may be cited here are: On the industrial and commercial side, there is considerable potential for achieving temporal shifts in the demand for electricity (for example: aluminium smelting plants, refrigerated warehouses). On the private household side, the crossover between the electricity and heating sectors is of particular relevance from a quantitative point of view: heat pumps and combined heat and power (CHP) systems can often be operated according to the availability of electricity without leading to any loss of comfort for the user. Of importance here are appropriate storage systems for heat energy, so as to be able to decouple generation and consumption on the thermal side. Furthermore, the increasing proliferation in the private sector of PVsupplied smart homes optimised for self-use of the generated electricity will be highly relevant to grid management, since the manner in which these buildings are operated has a significant influence on the load profile in the distribution grids. By adjusting the way in which they are operated, smart homes can make a valuable contribution to the cost effective operation of the distribution grids. All systems feeding electricity into the grid will have to be utilised to an increasing extent for the provision of services to the grid. In particular, inverter technology must be designed to provide the relevant functionality. Flexible charging and discharging of electric vehicles will offer the potential to make a contribution to the stabilisation of the grid, since the precise point in time at which a vehicle is charged is not generally of particular relevance for the user. The batteries of electric cars might therefore play a stabilising role for the power grids. Preference could be given to charging when the overall demand for electricity is low or in times of high availability of renewable energy. In the longer term, it may also be possible to feed power from the cars back into the power grid if bottlenecks should occur in the generation of electricity. A prerequisite for comprehensive active load management is the real-time availability of information about the value (production demand) of electricity. Only on this basis are the participants able to take appropriate measures in order to make temporal adjustments to the electricity demand and reduce supply bottlenecks. The incorporation of the potentially large number of controllable consumers into the distribution grids, in particular, gives rise to the need for convergence of the energy and ICT infrastructures ( smart grids ). 3

4 3. Grid expansion The further development of the grid infrastructure is characterised by two significant challenges: Because of the variation in the geographical distribution of the availability of electricity from renewable energy sources, there is a growing need for interregional balancing. This is particularly essential because interregional electricity transport is typically many times cheaper than local electricity storage. A significant expansion of the transmission grid capacities is therefore an essential element of the transformation process in the energy sector. Whereas, in the past, the electricity generation capacities were mainly located at the level of the transmission networks, the decentralised technologies of renewable energy are installed on the distribution grid side. This is already creating major challenges for the distribution grids and will do so to a greater extent in the future with regard to both transport capacities (e.g. dimensioning of transformers) and voltage stability. Hence there is a significant requirement for expansion measures (controllable local grid transformers, grid upgrades, etc.). Technology suppliers and grid operators need a common strategy with regard to the aforementioned points in order to be able to establish the necessary facilities (high-voltage direct-current transmission, controllable local grid transformers) in a coordinated fashion. 4. Electricity storage Against the backdrop of the approaches towards ensuring the flexibility of the power supply system that have already been mentioned, it is also important to perform a detailed analysis of the various storage technologies. Studies on the basis of energy balance calculations have shown that in Germany about 40 to 50 percent of electricity can be generated from renewable energy before significant quantities of storage capacity are required (assuming that the measures set out above, Sections 1 to 3, are implemented). We may then distinguish between two fundamental technology scenarios when selecting the types of storage appropriate for systemic application: a) The a few hours of electricity in small electrochemical storage facilities scenario employing small-scale technologies, typically with high efficiency: In principle, this includes all electrochemical approaches to electricity storage (redox-flow batteries, lead batteries, Li-ion batteries and the like). Because of their modularity, these technologies are primarily suited to the modernisation of the distribution grid infrastructure (smart grid, smart home, vehicle to grid). Typical scenario calculations envisage a relevant total storage capacity of approximately 4 hours of German electricity consumption here. 4

5 b) The a few days of electricity in large chemical storage facilities scenario employing large-scale technologies, typically with low efficiency: Because there is little remaining potential for new pumped storage power plants in the region under consideration, this will primarily include those technologies that follow chemical storage routes with subsequent reconversion to electricity (e.g. hydrogen and synthetic methane in geological caverns). Because of the necessity for large storage caverns, this scenario lends itself to performance and energy dimensions more suited to use at the level of the transmission networks. Typical scenario calculations envisage a relevant total storage capacity of several days of German electricity consumption here (typically: about 1 week). Given plausible boundary conditions, energy balance calculations show that both of the aforementioned scenarios give rise to comparable load management results up to a share of renewable energy of about 80% in the electricity sector. It is only when the fraction of renewable energy becomes still higher, such that it is approaching full coverage, that the large chemical storage scenario has the edge over the use of batteries. It is therefore anticipated that efficient decentralised batteries will be employed at a very much earlier stage than large chemical storage facilities suffering from poor efficiency. 5. Technology portfolio of renewable energy Solar power, wind power, biomass, hydropower and geothermal energy are possible candidates for the generation of electricity from renewable energy, though taking the sustainably realisable potentials into account reduces the portfolio to essentially solar and wind power. What these two forms of energy have in common is their high temporal and spatial fluctuation. They do, however, differ fundamentally with regard to variation with time in the output of the electricity generated in each case. From a given electricity demand load profile, it is therefore possible to calculate for each geographical region the optimal technology portfolio, in terms of renewable energy, that minimises the deviations between the supply (of wind and solar power) and the demand for electricity over time. The better this optimisation can be guaranteed, the fewer the deviations between supply and demand that must be compensated by the downstream side of the system. The result of the optimisation depends on which geographical region is chosen as a basis for calculation. Changes in the timing of demand for electricity in the future will also affect the results of the corresponding optimisation calculations. Taking the currently typical capacity factors of 0.1 (PV) and 0.2 (onshore wind) as a basis for calculation, we find in the case of Germany that, from this perspective, a currently optimal portfolio of generation technologies requires roughly the same proportions of installed solar and wind power. The political conditions and the design of the electricity market should therefore be formulated to favour an optimised balance of photovoltaic power and wind power. 5

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