The Future of Storage Centralized or Decentralized?

Transcription

1 The Future of Storage Centralized or Decentralized? Dr Josef Janssen Head of Trading & Origination BKW Energie AG, Berne 5. St.Galler Forum für Management Erneuerbarer Energien 23. Mai 2014, St. Gallen

2 Content 1. In which markets are pumped-storage hydro power plants (PSH) employed to mitigate fluctuating renewable power production? 2. What is the impact of renewables on markets? 3. How do market developments impact on PSH? 4. What is the experience of BKW with decentralised storage? Seite 2

3 BKW key figures 2013 Production power (TWh) 11.2 Wind power (MW) 357 Sales power (TWh) 9.3 Trading power (TWh) 133 Grid kv (km) 22'053 EBITDA (Mio. CHF) Net profit (Mio. CHF) FTE 3'138 Share holders (%) Kanton Bern 53 Group E 10 E.On 7 BKW 9 Free float 23 Seite 3

4 BKW hydro power Production: 3.9 TWh Flexible hydro power plants BKW/Titel/Kurzzeichen Seite 4 Turbines: MW Pumps: 225 MW Operator of largest pumped-storage hydro power plant (PSH) in CH Kraftwerke Oberhasli, Berner Oberland - Grimsel BKW 50% Turbines 1125 MW, Pumps 360 MW Energy production 2,3 TWh Energy content lakes 590 GWh

5 Increasing capacity of fluctuating wind and PV generation requires flexible power plants. - PV & wind generation and residual load in DE (day-ahead forecast) [MW] Solar D-1 Wind D-1 Last D-1 Residuale Last D-1 Seite 5

6 Significant differences between forecasts and effective production need to be balanced. Intraday forecasts are updated hourly by means of real-time production data and new wind generation forecast Seite 6

7 Residual load is increasingly balanced by flexible power plants in different market segments. Day-ahead Auction by EPEXSpot at 12:00 noon Products: hours Intra-day Continues trading at EPEXSpot Up to 45' before delivery Products: quarters, hours Control reserve Primary (0.5 5 ') Secondary (5 15 ') Tertiary (> 15 ') In the present market design, these markets are the only source of income for PSH and other flexible power plants > future depends on economic conditions, how are they developing? Advantage of PSH: CO2-free storage of excess renewable energy production Seite 7

8 Peak-shaving by PV generation has important impacts on PSH via day-ahead markets. Avg. Hourly price profile day-ahead auction Economic impact Hourly price profile of day is becoming flat -> peak-shaving Less potential for arbitrage between different hours Less hours of pumping and turbining Decreasing margins of pump cycles If PV capacity continues to increase, shift from one to two daily cycles possible In addition to peak shaving, negative prices increasingly occur (minimum of minus 500 EUR/MWh) Seite 8

9 Liquidity in intraday markets is increasing due to boom of PV and wind, but not necessarily profit potential. Seite 9

10 Demand for control reserve is not increasing, due to portfolio effects and increasing quality of forecasts. - Forecast error solar DE - -> Control reserve markets do not mitigate adverse market developments for PSH - Forecast error wind DE - Seite 10

11 Cross-border capacities limit use of Swiss PSH for renewables in Germany. - Cross-border flows CH: winter pattern - - Cross-border flows CH: summer pattern - As a consequence of cross-border limits, price signals reflecting solar and wind generation in DE are weakened at border DE-CH Seite 11

12 In the future, existing PSH will continue to be operated, but new projects are questionable. Existing plants Pumped-storage: 1'383 MW, 1.6 TWh Pumped-storage without inflow: 456 MW BKW is dispatcher of largest plant (KWO) (Storage: 8'073 MW, 17.4 TWh) New plants under construction Linth Limmern (Axpo): 1000 MW (2015/16) Nant de Drance (Alpiq): 900 MW (2018) Veytaux (FMHL): 240 MW (2015/16) New plants in planning Grimsel 3 (KWO/BKW): 660 MW (freeze) Lago bianco (Repower): 1000 MW (???) Seite 12

13 Besides operating PSH, BKW is also committed to decentralised storage. Compressed air energy storage (CAES) Pilot project at Mont-Soleil energy park Jura Testing of Enairys Hydro-Pneumatic Energy Storage (HyPES): 25 kw, 10+ kwh Since 2011 Demand-side management Smart RSA Load-shifting of boiler usage and electric heating in households (see below) Decentralised energy storage in households BKW is looking for pilots for testing EU project "FlexStore" Role BKW: Testing of Li-Ion / Vanadium Flow Batteries («LiRox») Location Mont-Soleil energy park Jura Seite 13

14 Functioning of Hydro-Pneumatic Energy Storage Seite 14

15 In 2014, BKW has launched innovative product of "Smart RSA". RSA = Rundsteuerungsanlage / ripple control RSA are used for remote control of boilers and electric heating in households Smart RSA: power supply to boiler and electric heating is based on price optimisation -> shifting load from expansive hours to cheaper hours within off-peak period No additional control device on site required Potential in Switzerland: 5'000 MW Conclusion: Optimising existing decentralised energy storage facilities is profitable already nowadays - Electricity meter with RSA - Seite 15

16 Conclusions (1) Due to increasing capacity of PV, economic situation of PSH is becoming worse, even if required for renewables («renewables-psh paradox») (2) Additional investments in PSH requires appropriate change of market design (e.g. flexibility / capacity markets for CO2-free technologies) (3) Optimising existing decentralised storage in the near-term future commercially more promising than new technologies (4) The future of storage will be centralised and decentralised (5) Grimselwelt of PSH offers a wide variety of touristic attractions (e.g. visit of KWO, hiking, Trift hanging bridge, Gelmer train, etc.) Seite 16

17 Thank you for Your attention! - Questions? Fragen? Contact: Josef Janssen Dr oec. HSG Head of Trading & Origination BKW Energie AG Viktoriaplatz 2 CH-3000 Bern Fon Josef.Janssen@bkw.ch Seite 17

18 Further readings: Bundesamt für Energie (BfE) (Dez. 2013): Energiespeicher in der Schweiz Bewertung von Pumpspeicherkraftwerken in der Schweiz im Rahmen der Energiestrategie 2050 Perspektiven für die Grosswasserkraft in der Schweiz Seite 18