Increasing Power Flexibility

Dr Michael Ritzau

Increasing Power Flexibility

Berlin Energy Transition Dialogue 2016

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F I E L D S O F E X P E R T I S E

• Strategy and political advisory • Energy markets analysis

• Economic and technical feasibility of power plant projects (Due diligence)

• Integration of intermittent generation from renewables • Grid access concepts and Grid extension planning • Dispute reolution

• Counseling in strategic, energy-related matters for decision makers

B A C K G R O U N D

1976 _{Graduated in electrical engineering at the RWTH Aachen} Doctorate in engineering (1989) at the Institute for Electrical Plant and Power Industry

1988 co-founder and managing director of

BET Büro für Energiewirtschaft und technische Planung GmbH in Aachen

Member of IAEE (International Association of Energy Economists)

Member of FGH (Forschungsgesellschaft Energie)

Member of working group fuel and water whithin VIK (Vereinigung industrielle Kraftwirtschaft)

Member in various panels of BMWi

P E R S O N A L D A T A Year 1956 Nationality german CV

Dr Michael Ritzau

Managing Director

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We accompany the energy industry as pioneers, experts and practical translators

WHAT DRIVES US

Hier: Veranstaltung, Ort Datum für alle Folien (Einfügen-Fußzeile-für alle übernehmen) Development of the

German gas network access model

Transaction projects & management consulting

Foundation of B E T Dynamo Suisse AG Assessing the development

of competition for the Federal Ministry of Economy Development of a

network access regulation

Foundation of B E T by Dr. Michael Ritzau & Dr. Wolfgang Zander Support of ministries on implementation of the energy concept 1988 1999-2000 1995 2003 Since 2007 SINCE 2011 2012 Conception of an energy market design for VKU

2013

Proposal for a new network charge system

2015

Thinking energy ahead– Utility company+

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We have aligned our structures to tackle the complex market requirements

HOW WE ARE ORGANISED

Hier: Veranstaltung, Ort Datum für alle Folien (Einfügen-Fußzeile-für alle übernehmen)

Grid Consulting

Management Consulting

Market Consulting

Transaction Advisory Services & Business Analysis Organisational & Personnel Development Decentralised Energy Systems Organisation & Data Management Regulation & Network Access Grid Evaluation & Grid Planning

Power Plants & Storage

Energy Systems & Fundamental Models Energy Markets, Sales & Portfolio Management Commercial Grid

Management

Coporate Strategy & Management GRIDS DATA MANAGEMENT REGULATION GRID MANAGEMENT STRATEGY & MANAGEMENT TRANS-ACTIONS ORGANISA-TIONS & PERSONNEL POWER PLANTS & STORAGE MARKETS & TRADE RENEWABLES SYSTEMS & MODELS

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The increasing share of renewable energy sources with intermittent generation has a

considerable impact on our present power system

WHAT WILL HAPPEN IF MORE RENEWABLE ENERGY SOURCES ARE INSTALLED?

BETD, Berlin, 17.03.2016 • Source Krzikalla et al (BET) 2013: „Möglichkeiten zum Ausgleich fluktuierender Einspeisungen aus Erneuerbaren Energien“, Studie im Auftrag des Bundesverbandes Erneuerbare Energie

Not taking into account bottlenecks in the grid

load renewable energy

generation residual load load renewable energy

generation

renewable energy

generation residual load

Residual load BEE-Scenario Scenario 55% RES

Scenario 40 % RES Actual (2014) 27 % RES

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There are o lot of options for increasing flexibility. The electricity market should

provide the appropriate price signal to trigger most efficient technologies

OPTIONS FOR INCREASING POWER FLEXIBILITY

BETD, Berlin, 17.03.2016

2015

2020

2030

2040

2050

Demand Site Management Industry

Power to heat, power to transport

Demand Site Management Domestic and commercial

New Hydro storage

Feed-in Management Wind & PV Reducing must-run operation

New flexible back-up plants

Power to Gas (H₂) Battery storage as a game changer Increasing flexibility of thermal power plants by retrofit

Power to Gas (CH4)

32% 40% 45% 50% 70% > 80% Share of Renewables1)

1) _{% of power consumption}

Grid extension

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Electric boilers replace the heat production in heating boilers; the electricity for this

will be purchased in the control energy market and the spot market

EXAMPLE 1: POWER-TO-HEAT

Innovationsforum Energie, Zürich, 10.03.2016

Heat generation is able to

compete with electricity

generation if

levies & network fees of

taxes are removed,

• expensive, alternative heat generation is replaced and / or

• simultaneously quality system service services are provided

Climate politically electric

boiler are only justified if

actually used with

Renewable energy overflow

Case Study

Stadtwerke

Lemgo

Bild- & Textquelle: Stadtwerke Lemgo GmbH

•

In 2012 Stadtwerke Lemgo took a 5 MW electric

boiler in operation

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The boiler replaced heat from heating plants and

is marketed in the control energy markets

•

Because of the combination of CHP and electric

boiler SW Lemgo have a special regulatory

situation regarding EEG Umlage, electricity taxes

and network tariffs.

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How does the installation of a battery storage improve the profitability of a PV self

consumption system for a supermarket in Germany?

EXAMPLAE 2: BATTERY STORAGE FOR IMPROVING THE SELF-CONSUMPTION RATE OF A PV-SYSTEM

I N I T I A L S I T U A T I O N W I T H O U T S T O R A G E

Hier: Veranstaltung, Ort Datum für alle Folien (Einfügen-Fußzeile-für alle übernehmen) 100 200 300 400 500 1 1001 2001 3001 4001 5001 6001 7001 8001

kW/h

storage capacity utilization in 2015

filling level storage [kWh] loadt segment I [kW] power adapetd Et location II [kW]

• Assumption for modeling lithium-ion battery: • storage efficiency: 85%

• self-discharge rate: 0,05%/yr (0,001 %/h) • max. depth of discharge: 70%

• Modelling was carried out on a high temporally basis

• supermarket uses PV plant (95 kWp) for self consumption • electricity demand of supermarket: 254 GWh/a

(P_min: 9 kW/a; P_max: 60 kW/a)

• self consumption rate of the generated electricity at 80% • still high economical attractiveness for the use of a PV

system for self consumption, although the„EEG-Umlage“ has to be paid proportionally since 2015

M O D E L L I N G B A T T E R Y S T O R A G E

Without battery storage the electricity surplus

will be feed in

Does the profitabilityof the PV self consumption system can be further increased by the installation of a battery storageto enhance the self-consumption rate to 100%?

Electricity generation of the PV plant exceeds only in a few hours of a year the load of the supermarket

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the full battery capacity (516 kWh) is used only a few hours per year; the utilization of

the (expensive) battery is relatively low

results of storage modelling

BATTERY STORAGE FOR IMPROVING THE SELF-CONSUMPTION RATE OF A PV-SYSTEM

• Does a battery storage with less capacity and a higher utilization is economically attractive?

What critical costs per kWh capacity a lithium-ion battery need to have to be cost-effective?

• What further deployment and optimization possibilities arise when installing a battery storage? What monetary value does have an advanced storage utilization to optimize electricity procurement?

• What storage capacity lead to a maximum NPV? What influence does have the consideration of a battery storage on the optimal size of the PV system?

N E E D S F O R F U R T H E R M O D E L L I N G

Hier: Veranstaltung, Ort Datum für alle Folien (Einfügen-Fußzeile-für alle übernehmen)

in order to achieve a self-consumption rate of 100% (no feed in), a relatively high

storage capacity (about 500 kWh) need to be installed

I

the full battery capacity is used only a few hours per year; over 20 years the lithium-ion battery

run-through 632 (theoretical) full charge cycles; the battery buffers primarily peaks

II

with the installation of the battery storage, the NPV of the PV self consumption system

can be improved bynearly

40,000 € to 81,160 € (discounted over 20 years)

III

battery storage capacity is up to date still cost

expensive; for 40,000 €a commercial lithium-ion battery system with 40 kWh is available

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The integration of renewable energy can be supported by virtual power plants.

Together with large-scale integrated district heating systems, CHP can contribute

significantly

HOW CAN VIRTUAL POWER PLANTS CONTRIBUTE?

A

virtual power

plant is the combination of

measures to increase flexibility in all

components

of the electricity network

(generation, grid, consumers).

Virtual power plants

enable the combination

and control of generation and demand to an

optimized overall system

.

Various control concepts:

• Decentralized control of virtual power plants

according to market signals considering local

restrictions (thermal load for CHP, electrical load)

• Control by a central instance (control room)

BETD, Berlin, 17.03.2016 CHP DSM Heat

Virtual

power plant

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Is the future energy supplier a big supervisor of various flexibilities?

STATUS QUO AND TARGETS

Innovationsforum Energie, Zürich, 10.03.2016 Utility+supports

households in implementing their own

supplies and uses the storage for system

optimization Utility+ supportes

households in decentralised heat supply as contractor and uses the flexibility to optimize the system"

Utility+operates its own power generation equipment and uses the

transformation of other energy forms for energy

storage “

„Versorger+_supports

industry and trade in the uplift of flexibility

options“ „Versorger+_gaines

access to public transport to use the flexibility in the schedule

management

Utility+_{needs access}

to electric mobility to time to stagger load

operations

?

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The alternate tariffs offers the possibility to adapt their consumption and injection

behavior flexibly to market and network situation

MAIN FEATURES OFF THE NETWORKS TARIFFS

Innovationsforum Energie, Zürich, 10.03.2016 Differentiation of network tariff according to

self-consumption and energy output

Network tariff scale according to spot price

(1) Netzbetreiber, die keine direkte Kopplung an den Spotpreis vornehmen wollen, können in begründeten Fällen ein eigenes Netzsignal verwenden.

•

No general punishment for

self-consumption

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Incentive for

network-relevan

t behavior

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Maintenance of the energy price (kWh)

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Strengthening market signal via network

charges

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Network tariff scale stimulates

market-relevant behavior

1

•

Analog to this an adaption of

„

EEG-Umlage“

is advisably

Spot price Energy price consumption <1 ct/kWh 2.5 ct/kWh Extra charge Energy output 1 bis 8 ct/kWh +3.5 ct/kWh 2.5 ct/kWh >8 ct/kWh +6.5 ct/kWh 2.5 ct/kWh Base tariff Alternate tariff Total consumption Self-consumption Energy output 6 ct/kWh 5 ct/kWh Level of energy price 2.5 ct/kWh

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Next to base tariffs and alternate tariffs, additional tariffs give the consumer the

possibility to save costs by load control through the network

MAIN FEATURES OFF THE NETWORKS TARIFFS

Innovationsforum Energie, Zürich, 10.03.2016 Additional tariff 1: load shifting

Additional tariff 2: unsecured load

(1) Analoge Systematik zu den bisher abschaltbaren Tarifen nach §14a EnWG. Nutzer, die keine steuerbaren Tarife möchten, können (ggf. mit Beteiligung an den Ausbaukosten durch Einmalzahlungen) auch reguläre Kapazität erhalten.

•

Networks operator

shifts the electricity

output

(e.g. loading over night)

•

Controlable tariffs

prevent

disproportionate network expansion

through

Gleichzeitigkei

t

1

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Expansion of the available capacity by

(n-0)-secure network operation

•

Analog to gas supply

(n-0) loa d (kW /h) (n-1) 18:00 20:00 22:00 24:00 00:00 02:00 loa d (kW )

E N E R G I E .

W E I T E R

D E N K E N

B E T Büro für Energiewirtschaft und technische Planung GmbH

Aachen, Leipzig, Hamm (D) | Zofingen (CH) Alfonsstraße 44, D-52070 Aachen, Telefon +49 241 47062-0 Telefax +49 241 47062-600 www.bet-aachen.de

E N E R G I E .

W E I T E R

D E N K E N

Dr. Michael Ritzau Telefon +49 241 47062-420 Fax +49 241 47062-600 E-Mail [email protected] K O N T A K T P E R S O N