Flexible interplay between power and bioenergy Erik Trømborg, NMBU CENBIO 14.03.2017 Norges miljø- og biovitenskapelige universitet 1
FlexElTerm *) : Flexible interaction between the power and heat sector Improved interaction may give benefits Partners Main objective: Analyse how increased interaction may improve: The value of national energy resources Security of energy supply Project period: 2013 2017 Web: www.flexelterm.no Twitter: @flexelterm Reserach partners: NMBU + Nordic Universitites *) Fleksibelt samspill mellom kraft og termiske energi i framtidens smarte energisystem 2
Background and motivation (1) 1) System challenges of high VRE shares: - High need for ramping and balancing - Low capacity credit (low capacity at peak load) - Risk of over-supply NORWAY: 1. Regulated hydro gives significant capacity flexibility, but still seasonal challenges in dry and cold years (?) 2. Increased variability in neighbouring countries imply increased short run variability in power prices 3. Capacity challenges on regional levels grid vs flexibility
Background and motivation (2) 1) System challenges of high VRE shares 2) The merit order effect of VRE Edenhofer et al. (2013)
Background and motivation (3) 1) System challenges of high VRE shares 2) The merit order effect of high VRE shares 3) The need for decarbonizing the heating sector Distribution of EU energy consumption (Source: EU Heating and Cooling strategy) Fossil fuel share in heating and cooling: 84% (Source: EU Heating and Cooling strategy)
Background and motivation (4) 1) System challenges of high VRE shares 2) The merit order effect of high VRE shares 3) The need for decarbonizing the heating sector Power to heat (P2H) for heating and cooling can, potentially, 1) reduce (some of the) system challenges, 2) increase the VRE market values, and 3) reduce emissions from the heating sector
Large volumes: District heating in Nordic countries 120 TWh corresponds to 75 mill m 3 if from solid wood only Heat demand (TWh) 140 120 100 80 60 40 20 Sweden Norway Finland Limited use of electricity due to eltaxes and grid rents. 22% of delivered heat from el-boilers and heat pumps in Norway DH 2015 0 2008 2009 2010 2011 2012 2013 Denmark 7
Project activities 1) Studies of technological developments Review of techological changes relevant for district heating (VTT report) Plant level analyses Use of electricity Thermal storage 2) Integrated modelling of the Nordic power and district heating markets 3) Policy implications Heat demand and impacts of heating systems Grid tariffs Framework conditions for district heating
The Balmorel model Partial equilibrium model for the Northern European power and district heating market Detailed electricity and heat market data on a regionalized level Investments determined endogenously or exogenously in a long term model The market is thereafter simulated at an hourly time resolution Hourly market conditions well suited for modeling of variable renewable energy sources 9
Modelling of the Nordic District Heating Market 1 Area 19 GWh Total 42 district heating areas 1 Area.1 TWh 2 Areas 2.4 TWh District heating consumption in 2030: 128 TWh 1 Area.1 TWh 1 Area 6 GWh 1 Area.3 TWh 1 Area 7 GWh 1 Area.2 TWh 1 Area.3 TWh 2 Areas.7 TWh 1 Area.1 TWh 1 Area 61 GWh 4 Areas 20.4 TWh 2 Areas 2.9 TWh 2 Areas 4.5 TWh 5 Areas 39.5 TWh 4 Areas 9.6 TWh 7 Areas 37.1 TWh Varmeetterspørsel (TWh) 60 50 40 30 20 10 0 50 34 36 8 Denmark Finland Norway Sweden 2030 3 Areas 14.9 TWh 10
Quantifying the P2H impacts main assumptions Main assumptions for 2030, fixed in all simulations More RE, especially VRE Some, but limited, growth in demand for power and heat More interconnectors to the Continent and UK Less nuclear power in Sweden Assumptions that are varied in different simulations Installed capacity of el-boilers and heat pumps Inflow (wet vs normal year) Price of CO2-emissions and biomass Grid tariffs electricity use in DH Tittel på Norges miljø- og biovitenskapelige universitet pres 11 enta sjon
Results: When are el-boiler used? 6000 1200 5000 1000 Weekly energy (GWh) 4000 3000 2000 800 600 400 1000 200 0 0 0 4 8 12 16 20 24 28 32 36 40 44 48 52 Week Wind power Heat demand Electric boiler
Power prices, normal inflow 80 75 70 65 60 /MWh 55 50 45 40 35 0, 10 og 20 % extra installed el-boiler capacity (wrtpeak load 2030) 0 % 10 % 20 % 50 % 30 0 4 8 12 16 20 24 28 32 36 40 44 48 52 Week Average price 45.6 47.6 48.1 48.2 0 % 10 % 20 % Standard deviation 11.9 10.9 10.8 10.8 Power to heat (TWh) 2,5 8,6 10,4 11,3
Power prices, wet year 80 70 60 50 /MWh 40 30 20 10 0 0 4 8 12 16 20 24 28 32 36 40 44 48 52 Week 0 % 10 % 20 % 50 % Average price 26.9 38.6 40.2 40.8 El-priser 2030 i et antatt våtår 0 % 10 % 20 % Standard deviation 16.3 13.2 13.0 13.0 Power to heat (TWh) 2,5 14,9 17,8 19,1
Increase in wind power s market value (%) under «normal» assumptions % increase in the price recived by wind power producers GWh/ year Increasingly competitive conditions for el-boilers Tittel på Norges miljø- og biovitenskapelige universitet pres 15 enta sjon
Increase in wind power s market value (%) in wet year % increase in the price recived by wind power producers Wet year versus normal year GWh/ year Tittel på Norges miljø- og biovitenskapelige universitet pres 16 enta sjon
CO2-price: Impact on P2H: 40 000 35 000 30 000 P2H (GWh) 25 000 20 000 15 000 5 /t Nomal year Wet year 10 000 20 /t 5 000 35 /t - 50 /t 0 10 20 30 40 50 60 Average Nordic electricity price ( /MWh)
Plant level analysis: Heat only plant with wood chips as base load with and without el-boiler: MWh 10 000 9 000 8 000 7 000 6 000 5 000 4 000 3 000 2 000 1 000-2030 Normal without el-boiler Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec MWh 10 000 9 000 8 000 7 000 6 000 5 000 4 000 3 000 2 000 1 000-2030 Normal with elboiler 1 2 3 4 5 6 7 8 9 10 11 12 Bio LPG Bio El-boiler LPG MWh 10 000 9 000 8 000 2030 Wet with elboilerl MWh 10 000 9 000 8 000 2030 Dry with el-boiler 7 000 7 000 6 000 6 000 5 000 5 000 4 000 4 000 3 000 3 000 2 000 2 000 1 000 1 000-1 2 3 4 5 6 7 8 9 10 11 12-1 2 3 4 5 6 7 8 9 10 11 12 Bio El-boiler LPG Bio El-boiler LPG
Electricity use in a heat only plant: Investment in el-boiler is profitable if grid rents support flexible use In Norway electricity will replace fossile fuels + partly biomass in wet years and windy periods Use of thermal storage will also reduce the use of fossile peak load and competes with electric boiler, especially in biobased plants 35 30 25 20 15 10 LPG Electric boiler Woodchips 5 0 T281 T314 T347 T380 T413 T446 T479 T512 T545 T578 T611 T644 T677 T710 T015 T048 T081 T114 T147 T180 T213 T246 T279 T312 T345 T378 T411 T444 T477 T510 T543 T576 T609 T642 T675 T708 November Desember 19
Key findings A power to heat (P2H) strategy can add substantial flexibility to the power system Reduced VRE integration challenges and costs Increased market values of VRE -> less need for financial support to reach certain RE targets P2H solutions provide more flexibility when Grid tariffs are low Biomass prices are high Carbon prices are low Flexible heating solutions have a promising benefit-to-cost ratio compared to other flexibility alternatives Norges miljø- og biovitenskapelige universitet
Prosjekt: BioNEXT The role of bioenergy in the future energy system - ENERGIX What are the comparative advantages of different bioenergy solutions in the Nordic countries, and what are the barriers to developing them? What types of feedstock, technologies and end-product mixes are likely to be the most profitable? What are the expected long-term developments and underlying uncertainties of market demand and prices? What are the positive external effects of different bioenergy solutions GHG emissions from fossil fuels, flexibility and energy security, support for the development of a vital forest sector? What are the policy instruments that can drive the industrial innovation and learning towards successful commercial breakthrough? 22