Åland Smart Energy Platform

VTT TECHNICAL RESEARCH CENTRE OF FINLAND LTD Åland Smart Energy Platform Feasibility study results Tasks: Benchmarking, Generation options, Funding possibilities

Introduction and contents

Starting point connected to Finland and Sweden electricity grids now large share imported from Sweden wind power plans from 20% to >100% share, potential for solar and biomass: ~ 100 % fossil free Åland possible, with advanced future energy system 14/09/2015 3

Åland Smart Energy Platform The challenge is managing increased variability and uncertainty by flexible smart energy network Platform to enable demonstrations for solutions to managing a high renewable power and energy system and markets Demonstration of smart energy technologies in real environment include smart grid options and advanced energy markets as enablers (real time metering and price formation) ability to manage concurrent fluctuations in production and demand while guaranteeing secure network operation in different fault situations optimizing production and demand on the basis of market signals and extensive use of smart grids 14/09/2015 4

Contents of this presentation 1. Benchmarking Benchmarking analysis of the leading international, especially Nordic demonstration sites For setting up the adequate ambition level for the demonstration ensuring the global uniqueness. 2. Generation options Feasibility and costs of potential generation options in Åland Illustrate different options with profiles, with future wind/pv/demand changes 3. Funding possibilities 14/09/2015 5

1. Benchmarking Åland Smart Energy Platform

What is being done elsewhere? Several Smart Grid demonstration platforms operational internationally, e.g. Gotland, Bornholm and Jeju Island in South Korea Local energy strategies parallel to demonstrations Bornholm: vision is to become a 100 green and sustainable society by 2025. Gotland, vision 2025: local supply of recycled and renewable energy corresponds to the energy use of the society of Gotland, including industrial demand As a part of these efforts Gotland demo aims at increase the hosting capacity for renewable power in the distribution grid by use of load shift from active customers and a battery based energy storage Bornholm demo aims at demonstrating a real-time market concept in a large-scale field test. 14/09/2015 7

Bornholm and Gotland: visions and goals Gotland, vision 2025: local supply of recycled and renewable energy corresponds to the energy use of the society of Gotland, including industrial demand Towards 2020 the goal is to reach 100 procent renewable energy supply, excluding fuel needs of cement industry In 2020, locally produced electricity from renewables is twice the amount of total electricity use in Gotland Source: Energiplan för Region Gotland (2014) Bornholm; vision is to become a 100 green and sustainable society by 2025. Strategy process with a goal of ending Summer 2015, more analysis and information in the pipeline? 14/09/2015 8

Gotland: the smart grid between the substations Källunge and Bäcks Installation of 2900 smart meters New updated substations (part 2 of the project) New sectioners and sensors achieving the self-healing grid (part 2 of the project) Installation of a photo voltaic system Installation of an energy storage (part 2 of the project) Source: Briefing document, CIRED 2013, Smart Grid Gotland project 14/09/2015 9

Gotland: market test 2 000 households (Smart Kund Gotland) and 30 businesses The market test will be used to test a number of different technical applications. Aims to achieve a load shift by of +/- 10%. Test is open for all households and businesses in the whole of Gotland, not just those located on the upgraded electricity grid between the Källunge and Bäcks substations. http://new.abb.com/smartgrids/projects/gotland/gotla nd-project-applications Source: Briefing document, CIRED 2013, Smart Grid Gotland project 14/09/2015 10

Gotland: high renewable, especially wind plans Some goals for Gotland, 2020: Solid biofuels from forests and agriculture: annual production 600 GWh Biogas production over 100 GWh Max 9 MWh fossil energy / person Outside ETS sectors min 75 % from renewables 650 700 MW wind power installed, projects for 1000 MW underway Source: Energi 2020 energiplan för Region Gotland (2014) 14/09/2015 11

Gotland: background information Source: Energi 2020 energiplan för Region Gotland (2014) 14/09/2015 12

Bornholm PowerLabDK http://www.powerlab.dk/facilities/intelligentcontrollab 14/09/2015 13

Source: EcoGrid EU A Prototype for European Smart Grids. Guide to the large-scale project 14/09/2015 14

Bornholm: real-time market Source: EcoGrid EU A Prototype for European Smart Grids. Guide to the large-scale project 14/09/2015 15

Source: The Latest Activities on Smart Community and EV in Korea and Jeju, Feb 7, 2013, Yang, Young Oh 14/09/2015 16

Source: The Latest Activities on Smart Community and EV in Korea and Jeju, Feb 7, 2013, Yang, Young Oh 14/09/2015 17

Characterisation of demos Goal Gotland demo Bornholm demo Jeju Island, South Korea 1. Increase the hosting capacity for renewable power in the distribution grid by use of load shift from active customers and a battery based energy storage 2. Improve the power quality for the customers by a decrease of the number and duration of power outages with 20% 3. Attract up to 2000 residential and up to 30 business customers to become active on the electricity Active customer will contribute to a load shift of +/- 10% The objective of the project is to illustrate that modern information and communication technology (ICT) and innovative market solutions can enable the operation of a power system with more than 50% renewable energy sources (RES) such as wind, biomass and photovoltaic (PV). The project demonstrates a real-time market concept in a large-scale field test. As a part of national target in ~20 years perspective towards 2030 Nationwide smart grid 30 percent of the global smart grid market Five sectors 1) Smart Power Grid 2) Smart Consumer 3) Smart Transportation 4) Smart Renewable 5) Smart Electricity Service Three-stage project 14/09/2015 18

Characterisation of demos sectoral actions, numbers Demand participation Generation Storages Evs Gotland demo Bornholm demo Jeju Island, South Korea A pilot demand response solution with equipment in about 300 homes controlling heaters and water boilers (10/2014). 5 MW of extra wind hosting capacity to the system (curr. limit 195 MW) Limited implementation (10-20) charging poles for EVs suggested Battery storage units 1.7 MW (280 kwh) simulated PV: Three single-phase installations, each of 3.2 kw and one three-phase installation of 2 x 22.5 kw. 1900 electricity customers (statistical control, manual, and automatic control groups), 100 industry/commercial buildings PV: 1 MW under roll-out during the project, electric vehicles under roll-out (no number specified) 6250 households mentioned Introducing a real-time pricing system underway(2015) EV goals reported in 2013: 10% of stock (incl. bused) replaced by 2017, 30% by 2020, 100 % by 2030. => 371 000 cars, 225 000 rechargers, Currently 160 cars. By 2020: 1 GW offshore wind, 350 MW inland wind, 30 MW PV in total 3585 GWh. By 2030: 2 GW offshore, 100 MW solar PV 14/09/2015 19

Characterisation of demos sectoral actions, numbers Gotland demo Grid equipment The South HVDC station voltage control will be connected to the system controller in Visby and a control for optimum voltage control is being implemented Upgrades of the existing 30 kv overhead lines to 70 kv. Some reinforcements to substations Upgrade of two 70 kv substations with new protection and control (out of total 20) (Källunge- Bäcks) Bornholm demo No grid equipment upgrades identified / reported in available material Market model A market test conducted (~300 participants). The smart customer price used comprises three components: 1. Enhanced hourly spot price based on the Nord Pool Spot 2. Grid Tariff - Time of use tariff 3. A wind component, unique for Smart Customer Gotland special discount in situations of strong wind. Real-time market with high, 5- minute resolution highlighted as the novelty of the demonstration 14/09/2015 20

Characterisation of demos - partners Partners Gotland demo Bornholm demo Jeju Island, South Korea Partners: Vattenfall, ABB, GEAB, Svenska Kraftnät, Schneider Electric, KTH. Preferred suppliers: Echelon, ETM, Powel, SLS SINTEF, Energinet.dk (TSO), Östkraft, DTU- CET (centre for electrical technology), Siemens, IBM, ECN, ELIA (TSO/DNO), Tecnalia, AIT, TNO, Eandis (DNO), EDPD, Tallin University Technology, TUT, Landis+Gyr Note: partners from ~10 countries (EU FP7 project) SK Telecom, LG Electronics, Hyundai Heavy Industries and national utility Korea Electric Power Corp., or KEPCO. 14/09/2015 21

Islands for demonstrations key numbers (~2012-14), various sources Gotland Bornholm Jeju Island, South Korea Åland Population ca. 60 000 40 000 605 000 (confirm) 29 000 Area 3134 km2 589 km2 1849 km2 1580 km2 Total electricity consumption 887 GWh 268 GWh 5300 GWh 290 GWh Peak load 170 MW 55 MW ~ 65 MW Wind power plants 184 MW 36 MW ~ 20 MW + 50 MW CHP/Biomass PV capacity for import/export Industrial energy use 45 MW (district heating, local biofuels) n.a., small ~50kW install. mentioned 16 MW.. 11 MW e+h 5 MW h (mainly biomass) 2 MW 5 MW 60 kw + 208 kw 2 x 130 MW 60 MW 80 MW SE 100 MW FI 8760 TJ 2 433 GWh (large cement factory located) 191 TJ 14/09/2015 22

Scaled indicators (Åland=1) 14/09/2015 23

Wind and solar PV shares of electricity supply actual generation in 2013, goals and regional plans towards 2020 Sources; Eurostat data for nations, indicative data for islands combined from various sources NREAP goals for 2020 (revised 50% wind share goal for Denmark) Energiplan för Region Gotland Åland scenario representing additions analysed in the project 14/09/2015 24

Energi 2020 energiplan för Region Gotland Comparisons: wind, Åland and demo islands Sottunga 100 MW included Corresponding goal for 2020: 700 MW Eckerö 50 MW included 14/09/2015 25 * Note: current peak load used. capacity

Comparisons: wind addition plans Corresponding 700 MW capacity (goal for 2020) 14/09/2015 26

Comparisons: PV 14/09/2015 27

Comparisons Åland and larger energy systems Data sources: Eurostat (2013 contry data), Åland information collected in the project ( here 2011 values) 14/09/2015 28

Åland wind plans included: the scale changes Data sources: Eurostat (2013 contry data), Åland information collected in the project 14/09/2015 29

Expected RES deployment in the EU Member States and 2020 RES targets Source: EC Renewable energy progress report (2015) Analysis from 2014 14/09/2015 30

Rough comparisons - larger energy systems and demo islands * Estimate for 2015, förnybar och återvunnen energi Comparisons to be done with caution Data sources: Eurostat, Energi 2020 energiplan för Region Gotland (2014), Åland information 14/09/2015 collected in the project 31

Volume and duration of demos ( ) Duration Pre-study 2010-2011 (6 months) Two phases planned Sep 2012 - Dec 2016 Gotland demo Bornholm demo Jeju Island, South Korea 2011-2015 2009-2013 (1st + 2nd phase) Subsequent steps mentioned up to 2030 Volume Pre-study 1.1 M 21 M 44 M Two phases planned (total ~3.7-4.2 M ) Currency transformations using average annual currency rates 2010-2014 1 = 9.0 SEK 14/09/2015 1 = 1.3 $ 32

European comparisons of Smart Grid project budgets 459 projects reviewed : 14/09/2015 Source: Smart Grid Projects Outlook 2014 33 http://ses.jrc.ec.europa.eu/smart-grids-observatory

SWOT Internal origin Strengths high share of wind electricity already planned in between two electricity market price areas possibility to test in developed market environment of Nordpool small island system, flexibility to test small share of industrial consumption consumer solutions more visible Weaknesses small island area: possibilities to test all options, like industrial markets small number of actors/competition in Åland gas options no infrastructure/pipelines yet External origin Opportunities potential to expand renewable energy shares by other options than wind power (PV, biomass) small scale testing for benefits - upscaling to larger markets and energy market areas Testing in weak grids digitalisation test place for emerging technologies testing in full society, for a small island system combining heat and gas to electricity markets Threats interest of testing new technologies, in full society scale? Finding enough benefits/incentives gas options interest to demonstrate? combined heat and power options (boilers, heat storage), interest to demonstrate? 14/09/2015 34

Åland unique possibilities for becoming world leading smart energy platform Linking single separate technology demonstrations to collaborative demonstrations by different industrial actors and to system wide demonstrations Linking electricity with heat, especially, and gas options Electric boilers, heat pumps and heat storages Transport sector: electric vehicles, power to gas options Electricity markets: situated between two market price areas opens for cross border trading and additional flexíbility Smart market demonstrations options: active customers, new tariff constructions, capacity mechanisms, etc. Digitalisation of the electricity system management Distribution network automation Microgrid/Island mode testing possibilities Possibilities for becoming testing site of data hub functionalities 14/09/2015 35

2. Generation options

Technology Platform Physical infrastructures Power system Automation Transportation Buildings District heating Markets Generation T&D networks Prosumer Functionalities Communication EVs, bioliguids, biogas Ferries NZEB, Heat pumps Biomass Heat storage

Platform to test solutions for managing high renewables energy system 14/09/2015 38

Wind +PV exceeds demand: During 2670 hours Max 57 MW 53 GWh

Wind +PV exceeds demand: During 4765 hours Max 157 MW 255 GWh 14/09/2015 41

Potential demonstration options generation Wind and PV production Voltage and frequency regulation Surveillance and control for flexibility features Microgrid type demonstration: small island/village? Small scale wind + PV +Storages, heat pumps SCADA, communications, management system 14/09/2015 42

Potential demonstration options heat/gas/storage options Surveillance and control for flexibility features District heating system: thermal storage when excess wind/pv electricity Controlling of heat pumps Biogas and Power2gas A power2gas option with gas pipelines Gas engine LNG storage Battery storage Electric vehicles: infra, information exchange 14/09/2015 43

Scenario assessments on generation options Scenarios for wind and solar increases Illustrations on different heat/gas/storage options with profiles, with future wind/pv/demand changes Year 2012 data used as a basis for calculations January and July as demonstration months 14/09/2015 44

Excess electricity CHP production and electric boiler (7.5 MW) included

Excess electricity CHP production, HFO diesel (only el.), and electric boiler included

Excess electricity CHP production, HFO diesel (only el.), electric boiler, and exemplary P2G generation (30 MW, 34.3 GWh annual electricity use included)

Excess electricity CHP production and electric boiler (7.5 MW) included 14/09/2015 48

Excess electricity CHP production, HFO diesel (only el.), and electric boiler included 14/09/2015 49

Excess electricity CHP production, HFO diesel (only el.), electric boiler, and exemplary P2G generation (100 MW, 213 GWh annual electricity use included) 14/09/2015 50

Excess electricity CHP production, HFO diesel (only el.), electric boiler, and exemplary P2G generation (30 MW, 34.3 GWh annual electricity use included) 14/09/2015 55

Excess electricity CHP production, HFO diesel (only el.), electric boiler, and exemplary P2G generation (100 MW, 213 GWh annual electricity use included) 14/09/2015 59

Additional info Heat/CHP generation, electric boilers, gas engines options to profiles Bio-CHP is CHP based electricity that is being produced in the existing biomass plant in electricity deficit situations with sufficient heat load HFO Diesel CHP is CHP based electricity that is being produced in existing Wärtsilä diesel plants (G1 and G4) in electricity deficit situations with sufficient heat load HFO Diesel (only el) is electricity that is being produced in existing Wärtsilä diesel plants (G1 and G4) with insufficient heat load for CHP mode Electric boiler 7.5 MW 14/09/2015 60

High solar PV example: electricity consumption and generation and in Åland, July, current +max Solar 28 MW * Solar PV capacity corresponds 40 % of the 14/09/2015 estimated roof area 61

High solar PV example: electricity consumption and generation and in Åland, July, current + Solar 28 MW + Eckerö 50 MW 14/09/2015 62

High solar PV and EV example: electricity consumption and generation in future Åland, January, current + Eckerö 50 MW + solar; 10 000 EV included * Solar PV capacity corresponds 40 % of the 14/09/2015 estimated roof area 63

Next steps to pre-feasibility phase 2 Generation and market simulations - options of the future electricity and heat system Cost efficiency of options throughout the energy system Optimized scheduling of flexibility services Analysis of pathways towards 100% RES, support for target setting Tools/models available EnergyPlan KOPTI 14/09/2015 64

Interest to demonstrate Company Technologies Functionalities Fortum Electric vehicles: EV charging infra, energy metering for EV, information transfer Electrifying ferries and boating Large battery storage (>1 MWh) in conjunction with wind/pv Utilising the data Temporary EV battery usage for the grid Benefit of battery storage and PV electricity Balancing / Frequency regulation Empower Energy market information management hub Electricity market operation practices and processes

Interest to demonstrate Company Technologies Functionalities Wärtsilä Synchronous condenser option to provide electricity and stability in disturbance situations LNG terminal / distribution Biogas liquidification plant for fuel distribution ABB Smart apparatuses for MV, substation automation and SCADA/DMS Microgrids (for LV and MV networks) PV power plant (~1MW) Residential PV for public and private houses (interconnected to LV grid) Fast EV charging infra Battery Energy Storage (~1 MW) Gas engine as reserve power Ensuring gas fuel for consumers (until biogas/power2gas options self sufficient) Self-healing distribution grids Frequency regulation

Examples on currently identified projects /project areas/activities in Åland Development of Energy Portal Åland: analysis tools and communication channel for consumers while serving platform information needs Smart homes: technologies for flexibility/control/new business possibilities Smart Grid focus on grid and distribution networks, availability, demand response, customer communication, peak handling etc. Solar powerpark: Prospectus on technical, economical viability Electric vehicles/transport: Private / Bus / Local line ferries / Local ground transport Energy efficiency and modernisation: households and enterprises Energy advisory and information: Build, live, commute Realizing bioenergy potential as part of wholistic energy supply Forestry sector development, energyplantations as part of environmental protection zones, future biogas options... 14/09/2015 67

First estimates of demostration investments BAU Additional investments options supporting platform Platform cost Wind Eckerö 50 MW Föglö 18 MW (Wind now 20 MW. Small scale wind 37.5 kw) Wind farm investments Sottunga 100-150 M Power production curtailment by x % (1 % corresponds 50 k with 30 /MWh) Extra voltage and frequency regulation capacity Surveillance and control for flexibility features PV Small scale PV 60 kw, 208 kw site under construction. Additional investment cost for rooftop PV 1 MW by 2018? (1.3 M ) 10 MW by 2025? (10 M ) Extra incentive for rooftop PV (e.g. investment subsidy 15-30 % -> 200 k - 400 k for the first 1 MW) Power production curtailment by x % (<1000 cost) Extra voltage and frequency regulation capacity Surveillance and control for flexibility features Microgrid type demonstration: small island/village? Based on site specifications Small scale wind + PV +Storages, heat pumps extra cost of the microgrid system (SCADA, communications, management system) Roughly 100 200 k? 14/09/2015 68

First estimates of demostration investments BAU Additional investments options supporting demonstration platform Platform cost Gas engine 5 MW diesel 2 x gas turbines (11.2 MW) 2 x heavy fuel oil diesels (23.1 MW) Old plants to be retired? - 650 /kwe for 2*20V34SG-D - 620 /kwe for 4*20V34SG-D - LNG storage: the dimensioning based on 500 running hours per year Storage - 3000 $ / 7 kwh ; 3500 $ / 10 kwh (Tesla Powerwall not including all components needed) Large storage >1 MWh to be demonstrated E.g. 50 k for 100 kwh storage capacity to be provided by the platform EV Low number of electric vehicles. More EVs to show visible effects Incentives for evs. Charging infra 0.5-1 M depending on amount and type of charging stations District heating system Current capacity 11 MW e+h 5 MW h (mainly biomass) -Adding flexibility: thermal storage to CHP plant 11 MW CHP (9 MW heat, 2 MW power) -Changing fuels (now CHP mainly oil and heat only 5 MW mainly biomass) -Electric boiler -Heat storage Surveillance and control for flexibility features (thermal storage when excess wind/pv electricity) Heat pumps Existing stock + Potential to increase Surveillance and control for flexibility features (controlling of heat pumps) Biogas and Power2gas - Small/scattered biogas possibilties. Would support a power2gas option with gas pipelines 14/09/2015 69

Power plant and storage cost and efficiency estimates Source: Danish energy agency Technology data for energy plants, update Jan 2014 http://www.ens.dk/en/info/facts-figures/scenarios-analysesmodels/technology-data 14/09/2015 70

Small bio-chp 14/09/2015 71

Stirling engine, gasified biomass 14/09/2015 72

Large onshore wind turbines 14/09/2015 73

Small onshore wind turbines 14/09/2015 74

Large ground PV systems 14/09/2015 75

Heat boiler, wood chips 14/09/2015 76

Heat boiler, wood pellets 14/09/2015 77

Heat boiler, gas fired 14/09/2015 78

Power storages 14/09/2015 79

Power storages (NaS) 14/09/2015 80

Power storages (VRB) 14/09/2015 81

Seasonal thermal storages 14/09/2015 82

Water pits 14/09/2015 83

Large steel tanks for heat storage 14/09/2015 84

3. Funding possibilities

Funding possibilities - national Ministry of Employment and the Economy (TEM) kärkihanke; investment subsidy and innovation funding for industry for demonstrations SITRA planning TEKES R&D programmes Digital business 17.9.2015 R&D and 7.10. enterprises Link to SHOK programme FLEXe ideas for demonstrations Academy of Finland New Energy programme, for basic/scientific research Ålands landskapsregering funding 14/09/2015 86

Funding possibilities - EU & Nordic Horizon2020 call opening 30.9. deadline 5th April LCE2-2016: Demonstration of smart grid, storage and system integration technologies with increasing share of renewables: distribution system target the DR and demonstrate at least 3 of the following: DR, smartening the DR, demostrate energy storage tech, manag. System and of services, connections between networks, smart integration of grid users from transport Consortium: Gotland, Bornholm interest already as a Nordic collaboration. SEAS collarboration, Turkey. Contacts to Spain and Portugal. EU Eranet grid plus, not yet information on next call Nordic Energy Research calls to be monitored. During feasibility study development a funding application was made with a consortia driven by VTT linking Åland, Bornholm, Gottland and Färö participants. 14/09/2015 87

Funding possibilities: EU /H2020 LCE2-2016: Demonstration of smart grid, storage and system integration technologies with increasing share of renewables: distribution system LCE 4-2017: Demonstration of smart transmission grid, storage and system integration technologies with increasing share of renewables EE12-2017: Integration of DR in Energy Management Systems while ensuring interoperability Innovation actions Innovation actions Innovation actions 5.4.2016 target the DR and demonstrate at least 3 of the following: DR, smartening the DR, demostrate energy storage tech, manag. System and of services, connections between networks, smart integration of grid users from transport. 14.2.2017 target the transmission grid and demostrate at least 2 of the following: power transmission techn and manag of large scale generation, large scale storage, comms/ict tech, wholesale market, cross-border collab. 19.1.2017 demonstrate interoperable solutions in buildings. LCE1-2016/2017: Next generation innovative technologies enabling smart grids, storage and energy system integration with increasing share of renewables: distribution network Research and innovation action 5.4.2016 Must target technologies, tools, services in on of the following fields: storage, synergies between energy networks, DR, intelligent electricity distribution grid. Predesign interfaces, demonstrate, interoperability, business models 14/09/2015 88