Quantifying the impacts of national renewable
Transcription
Quantifying the impacts of national renewable
Renewable Energy 80 (2015) 604e609 Contents lists available at ScienceDirect Renewable Energy journal homepage: www.elsevier.com/locate/renene Quantifying the impacts of national renewable electricity ambitions using a NortheWest European electricity market model Driscoll b, B.P.O. Gallacho ir a J.P. Deane a, *, A. a b Energy Policy and Modelling Group, Environmental Research Institute, University College Cork, Ireland Economic and Social Research Institute, Dublin, Ireland a r t i c l e i n f o a b s t r a c t Article history: Received 15 November 2013 Accepted 22 February 2015 Available online This work builds a comprehensive NortheWest European Electricity Market model for the year 2020 and uses it to quantify the impacts of ambitious national renewable electricity targets. The geographical coverage of the model comprises Germany, France, Belgium, Netherlands, Luxemburg, Great Britain and Ireland. The model simulates the electricity market operation for the entire region at half hourly resolution and produces results in terms of electricity prices, cross border flows, emissions and associated total system costs. The impact of two carbon prices is examined within the model. Results highlight the policy challenges that arise when individual Member States formulate renewable energy plans in isolation in the absence of integrated modelling of interconnected regions as cross border power flows play a more significant role in market dynamics especially in the presence of geographically dispersed variable renewable generation sources such as wind and solar. From a policy perspective results suggest that based on these national plans, congestion will be present on a number of key lines at long periods during the year. © 2015 Elsevier Ltd. All rights reserved. Keywords: Electricity European market integration Market modelling 1. Introduction The creation of a European internal electricity market is a priority of the European Union (EU). Since 1996, with the introduction of the “First Legislative Package” in the Internal Energy Market (Directive 96/92), there has been a move towards electricity market integration between national markets with a focus on common rules for generation, transmission and distribution of electricity. Despite two EU Directives1 and the creation of the Council of European Energy Regulators (CEER) the DG Competition report on energy sector inquiry found inefficiencies impeding a European internal electricity market. Issues highlighted include a high degree of market concentration, vertical integration, insufficient interconnecting infrastructure between nations and insufficient incentives to improve this as well as incompatible market design. Furthermore a lack of simplified and standardised regulations has been identified as a barrier to a European internal market [1,2]. * Corresponding author. E-mail address: [email protected] (J.P. Deane). 1 The First Legislative Package was adopted in 1996 and was replaced by the Second Legislative Package in 2003. There has since been a Third Legislative Package which was adopted in 2009. http://dx.doi.org/10.1016/j.renene.2015.02.048 0960-1481/© 2015 Elsevier Ltd. All rights reserved. Electricity market integration has been more successful in some regions over others. The Nord Pool, which includes Norway, Denmark, Sweden and Finland, has a tradition of cooperation and as such enjoys a high capacity of interconnection. Most European countries have significant institutional differences that mean power exchanges are inefficient, notably France with its near monopoly structure. In Ref. [3] the European integration process is examined using the pricing-to-market (PTM) phenomenon to test cross-border integration by comparing Norway and Switzerland's respective external electricity trades, demonstrating Norway has greater electricity market integration than Switzerland. Lise et al. [4] investigate the liberalisation of the NortheWestern European electricity market using the EMELIE model and conclude electricity is not necessarily produced where cheapest to do so, as firms with market power distort the market. Other research illustrating the disparity between regions includes [5e7]. The previous research indicates there is not uniform integration, and a single electricity market as envisaged by the EU has not been reached. Interconnection is a prerequisite for market integration across Europe. Mitigating market power through interconnection could reduce generation costs by reducing dependence on peaking plants as well as giving greater security of supply. Much of the literature considers specific case studies of a particular interconnector J.P. Deane et al. / Renewable Energy 80 (2015) 604e609 utilising a variety of models. A static optimal dispatch model is employed in Ref. [8] to study the effects of additional interconnection between Great Britain and Ireland and finds that private investment in interconnection would be less than the socially optimal level as the interconnector receives less revenue as interconnection increases. The META-Net modelling approach is used in Ref. [9] to find interconnection between Korea and Japan results in reduction of total system cost of electricity sectors but CO2 emissions are largely determined by generation plant mix and nuclear energy policy. Ref. [10] modelled the optimal amount of investment in new generation capacity, using a linear program, and optimal investment in interconnection, using a mixed integer program, in a case study for eight Northern European regions. It was found that interconnection investment reduces total costs only when there is a target for renewable generation. Further papers are available on electricity market modelling trends in general; see Refs. [11,12]. While previous research has created market and operational models of electricity markets such as those mentioned above [8e10] this paper contributes to existing knowledge through focussing on the NortheWestern European region with capacities calibrated to the year 2020 with a particular focus on renewable energy. Novel contributions of this work are the development and dissemination of a freely available NortheWest European power system database and model and the use of this model to analyse National Renewable Energy Actions Plans (NREAP) from an integrated regional perspective. This paper describes the development of (to the authors' knowledge) the first detailed electricity market model of the year 2020 for the NortheWest European region including the countries of Belgium, France, Germany, Ireland, Netherlands, Luxemburg and Great Britain. Renewable Energy capacitates are aligned in the model to National Renewable Energy Actions Plans (NREAP) submitted by each country to the European Union. The goal of the work is to develop a comprehensive database of electricity power plant in NortheWest Europe to improve the understanding of the development of regional markets within the EU. The dataset is freely available.2 Secondly the database and model are used to determine the impacts of renewable electricity targets on electricity prices and regional flows within the study area. Section 2 describes the software model used in this work. Section 3 describes the data sources and model configuration. The results are presented in Section 4 and initial conclusions drawn in Section 5. 2. Model The software used throughout this work to solve the unit commitment and dispatch problem is PLEXOS [13]. PLEXOS is a power systems modelling tool used for electricity market modelling and planning [14e16]. PLEXOS, normally a commercial modelling tool, is free to academic institutions for non-commercial research. This software was chosen because it is a flexible platform allowing user defined constraints. It is not a ‘black box’ and the users can browse and verify the equations of the problem via a diagnostic tool. The PLEXOS modelling tool is used by the Commission for Energy Regulation (CER) in Ireland to validate Ireland's Single Electricity market and has a history of use in Ireland [17]. A description of the model equations can be found in Ref. [16]. PLEXOS co-optimises hydro, thermal, renewable, and reserve classes. Modelling is carried out using mixed integer linear programming that aims to minimize an objective function subject to the expected cost of electricity dispatch and a number of constraints. 2 Contact Corresponding author. for dataset. 605 The objective function of the model includes operational costs, consisting of fuel costs and carbon costs; start-up costs, consisting of a fuel offtake and a start cost; penalty costs for unserved energy and for failing to meet reserve requirements. System level constraints consist of an energy balance equation ensuring supply (net pumping demand) meets regional demand at each period. Water balance equations ensure water flow within the pumped storage units is conserved and tracked. Constraints on unit operation include minimum and maximum generation, maximum and minimum up and down time and ramp up and down rates. Three Startup/shutdown profiles and times are enforced (hot, warm and cold). In this specific analysis generating units are assumed to run up instantaneously (ie no run up rates). We have tested the inclusion of run up rates on model runs and found the impact on results to be insignificant; however simulation times are much longer. They are therefore excluded in these market simulations. In chronological mode, PLEXOS solves for each period and maintains consistency across the full problem horizon. Temporal resolution settings in relation to solving are user defined and flexible. Users can choose interval lengths of one minute to one hour in hourly, daily or weekly periods over the full problem horizon (typically one year or more). For example, a model run with an optimisation length of one hour and period of one day with a horizon of one year will run 365 individual daily optimisations at a resolution of one hour each. To avoid issues with intertemporal constraints (i.e. unit commitment of large units and storage end levels) at the simulation step boundaries, a ‘look ahead’ period is used. ‘Look ahead’ means that the optimiser is given information about what happens ahead of the period of optimisation, and then solves for this full period (i.e. simulation period þ look ahead period). However, only results for the simulation period are kept. In this work the ‘Look ahead’ is set to 6 h. Pumped Storage units are also optimized in the model. Within the model, maintenance schedules for generation units can be fixed exogenously if a known maintenance schedule is available, otherwise the model can determine an optimal maintenance schedule based on the annual maintenance rate and mean time to repair for each unit. The objective function of the maintenance scheduling formulation is to equalize the capacity reserves across all peak periods. Random outages for units are calculated based on Monte Carlo simulations. Outages occur at random times throughout the year with frequency and severity defined by forced outage rate, mean time to repair and repair time distribution. At simulation run time, PLEXOS dynamically constructs the linear equations for the problem using AMMO3 software and a solver to solve the equations. In this work, Xpress MP [18] with a duality gap set to 0.1% is used. Within the PLEXOS modelling tool, wind and other renewables are essentially treated as ‘free’ generation (i.e. the marginal cost is zero), although this can be changed by the user. 3. Data sources A number of publicly available sources were drawn upon to gather the large amount of information required for to develop the 2020 Northwest Europe Electricity model [19e25]. These sources can primarily be divided into power plant technical data, renewable energy installed capacities, projected interconnection capacity between each country and load profiles. These are discussed below. In all, the current model and database contains over 900 individual power plants. Information on power plant capacity and type were taken from Transmission Systems Operators (TSO's), 3 AMMO performs a similar role in PLEXOS as other mathematical languages such as AIMMS, AMPL, or GAMS but is written exclusively for PLEXOS. 606 J.P. Deane et al. / Renewable Energy 80 (2015) 604e609 Table 1 Installed thermal capacity (MW) and number of thermal plant in each country for 2020. MW capacity AI UK Coal 855 21,384 Gas 4320 49,622 Nuclear 0 6078 Number of thermal power plant Coal 3 13 Gas 24 76 Nucleara 0 5 FR DE BE NL 2935 10,606 64,670 49,610 27,955 8052 470 11,000 5060 6652 22,919 504 5 26 58 141 249 6 2 69 6 10 66 1 a Information on german nuclear 2020 capacity and phase out is taken from the federal ministry for the environment, nature conservation and nuclear safety. For the UK information is taken from the department of energy and climate Change. Regulators, generation adequacy report and individual company web sites. In cases where a Generation Adequacy Report provided information only as far as 2018 it is assumed that this thermal capacity is unchanged for 2020. A breakdown by primary fuel type for each country is provided in Table 1 for installed MW capacities and number of thermal power plant. Some jurisdictions such as the All Island4 (AI) system provide very detailed information of power plant technical characteristics [17], where possible direct information on thermal generation type is used however in most countries detailed information is not available and has to be inferred from best available sources. Each power plant in the model is described by a maximum capacity, a minimum stable level, start costs, minimum up and minimum down time and where applicable ramp rates. Average heat rates are used to describe the efficiency of each power plant. The efficiency of each plant is inferred from the fuel type, size and where possible the age of the plant. Information from Ref. [26] and the IEA-ETSAP technology database [27] is used to approximate the average efficiency of each plant type by country. Generation plant that are predicted to come online between 2012 and 2020 are generally given the maximum efficiency for that plant type. Natural gas plant that are less than 100 MW capacity are assumed to be OCGT, whereas plant greater than this are assumed to be CCGT unless specific information can show otherwise. Table 2 shows the range of values that are used to determine actual plant technical characteristics. Intermediate values for start costs and efficiency between these ranges are linearly interpolated. Coal plant in the UK are also assumed to have limitations on the annual number of running hours and is reflected in a estimation of maximum annual capacity factors of 38%. This is to try and capture the impact of the Large Combustion Plant Directive and the Industrial Emissions Directive. Pumped storage plants are modelled as individual units (38 plants) with a pumping efficiency of 75% in all cases. All units are also assumed to operate on a daily cycle where the storage reservoir is forced to return to its initial level at the end of each day. This is potentially a restrictive operational rule and further research will look at the impact of relaxing this constraint. Transmission within each country is ignored and a ‘copper plate’ assumption is made. Interconnection between each country is included with values for 2020 sourced from ENTSO-E's Ten Year Network Development Plan [22] and from regional TSO. Fig. 1 shows the MW interconnection capacities assumed between each country for the target year 2020. Within the model only net exports from France are considered as boundary conditions for the study (i.e. imports/exports from all 4 The All Island System refers to the power system of both Northern and Republic of Ireland. The system is currently operated as the Single Electricity Market. Table 2 Technical characteristic for thermal power plant. Fuel type MW capacity (MW) range MSL (MW) Efficiency Min Up/Down time (hrs) Start cost (V000) Coal Coal Coal Coal Gas Gas Gas Gas Gas Gas Gas Gas New Gas Nuclear 50 100 300 600 25 50 100 150 200 400 600 800 800 e 30 40 120 240 10 20 40 60 80 160 240 320 320 e 36.20% 37.10% 38.00% 39.20% 32.00% 33.00% 35.00% 35.00% 55.00% 55.80% 56.60% 57.00% 58.00% 40.0% 6 6 6 6 6 4 4 4 4 4 4 4 4 24 V10 V20 V80 V150 V2 V5 V10 V15 V40 V120 V170 V200 V200 V250 other countries are ignored). This is done by imposing monthly export targets on France which are based on historic net exports to Spain, Switzerland and Italy from 2011. This is a major caveat on this work as it assumes any changes in carbon tax will have no impact on these historic flows. Within the model intertemporal constraints such as monthly or annual capacity factors are decomposed to daily constraints by firstly undertaking lower resolution simulations over the course of the year and passing these target values to the daily simulations. Hourly load profiles for each region were obtained from ENTSOE [28] for the year 2011. These profiles were linearly scaled to match the estimated gross final consumption of electricity as submitted by each country as part of it NREAP submission [29]. Values for the “additional energy efficiency” scenario are assumed in all cases. These values are shown in Table 3. Renewable energy capacities are also taken from the specific country NREAP. These are shown in Table 4. Annual capacity factors for each type of renewable generation derived from the report are imposed within the model as shown in Table 5. Also monthly Fig. 1. Projected interconnection between each country. J.P. Deane et al. / Renewable Energy 80 (2015) 604e609 Table 3 Gross final consumption and peak demand for each country. Table 6 Correlation between daily average predicted wind speed in each country. Country Gross final consumption (GWh) Peak (MW) BE DE FR IE LU NL UK 110,787 561,927 545,598 32,715 6617 135,850 376,812 18,056 88,586 105,035 5290 1248 22,122 67,393 Hydropower Pumped storage Geothermal Solar PV Concentrated solar Marine Onshore wind Offshore wind Solid biomass Biogas Bioliquids Total CHP UK FR IE GB NL BE FR DE AI GB NL BE FR DE 100% 65% 33% 33% 33% 43% e 100% 43% 43% 35% 48% e e 100% 88% 58% 65% e e e 100% 56% 63% e e e e 100% 82% e e e e e 100% Table 7 Annual average shadow price (V/MWh) and for each country assuming a carbon price of V20/tonne and V45/tonne. Table 4 Installed renewable capacity (MW) in each country. Installed capacity (MW) IE 607 DE BE NL LX 234 4920 28,300 4309 140 68 44 292 2800 6800 7900 0 0 1300 0 0 80 298 4 0 0 0 2680 4860 51,753 1340 722 113 0 0 540 0 0 0 0 75 1300 380 0 0 135 0 4094 14,890 19,000 35,750 2320 6000 131 555 12,990 6000 10,000 2000 5178 0 91 3140 2382 4792 2007 2253 30 62 1100 625 3796 427 639 29 0 0 0 237 18 0 0 80 270 3007 3765 662 0 56 historic capacity factors for French hydro also from the year 2011 are imposed on this resource in France. Hourly wind profiles for the study region were developed by the wind forecasting company [30]. A number of historic ‘hindcasts’ were simulated for the year 2011 to derive hourly wind speeds at a number of regions within each country. These wind speeds were aggregated and combined with a standard power curve to produce normalised hourly capacity factors for each country which were then scaled to the annual reported capacity factors for each country in each respective NREAP. The daily correlations for each region are shown in Table 6 for onshore wind speeds. Hourly solar profiles were obtained from the JRC [31] and again scaled to match reported NREAP values. Fuel price are taken from IEA World Energy outlook 2011 [32]. No transportation or seasonality of price is assumed. A range of pan European carbon prices from V20\tonne to V45\tonne are simulated. 4. Results The PLEXOS model was populated with individual unit characteristics and technical details. A number of simulations were undertaken to determine the resultant flows of electricity and market Table 5 Estimated annual capacity factors (%) for renewable generation for each country. Annual CF (%) IE UK FR DE BE NL LX Hydropower Pumped storage Geothermal Solar PV Concentrated solar Marine Onshore wind Offshore wind Solid biomass Biogas Bioliquids Total CHP 34% 0% 0% 0% 0% 35% 29% 36% 86% 59% 0% 80% 15% 0% 0% 10% 0% 35% 26% 39% 75% 58% 0% 80% 29% 12% 68% 14% 21% 35% 24% 34% 65% 68% 0% 65% 53% 12% 63% 9% 0% 0% 23% 36% 59% 70% 70% 63% 36% 0% 95% 10% 0% 0% 21% 35% 54% 38% 16% 51% 31% 0% 0% 9% 0% 43% 25% 42% 61% 83% 0% 0% 32% 8% 0% 8% 0% 0% 21% 0% 72% 57% 0% 65% SP (V20) SP (V45) AI BE DE FR GB LU NL 60.75 70.94 57.20 70.56 52.14 71.32 31.06 38.92 61.80 71.00 56.91 73.17 55.26 69.65 prices (as represented by shadow prices) of electricity under a number of carbon price assumptions namely V20 and V45 per tonne. In PLEXOS, shadow prices are automatically determined as part of the solution to the optimisation problem. The price reported represents the shadow price of the constraint that matches supply and demand. This can be considered as the change in the objective function for an incremental change in demand. Table 7 shows the model derived annual system marginal prices as approximated by the Shadow Price (SP) of electricity for each region for a carbon tax scenario of V20 and V45 per tonne. Lowest prices are observed in France with its large capacity of both nuclear and renewable capacity. Higher prices are seen in both the AI and GB system where gas fired generation are setting the price more frequently. The addition a carbon tax of V45/tonne adds on average an extra V13/MWh to shadow prices across the region. Tables 8 and 9 present the resultant cross border interconnector flows for both carbon price scenarios. France is a significant net exporter of low cost electricity and its high interconnection to other regions makes it attractive as an export market. However as shown in Fig. 2 there are long periods of congestion (i.e. number of hours the line flow is at the max flow) predicted on the Interconnector Table 8 Annual imports and exports for each country for carbon price scenarion of V20/ tonne. AI BE DE FR GB LU NL Imports (GWh) Exports (GWh) Net export (GWh) 1541 39,284 26,821 2311 34,450 6647 16,873 2483 5474 28,004 98,086 4907 1238 14,255 942 33,810 1183 95,776 29,543 5409 2618 Table 9 Annual imports and exports for each country for carbon price scenarion of V45/ tonne. AI BE DE FR GB LU NL Imports (GWh) Exports (GWh) Net export (GWh) 1967 30,640 34,099 1984 28,480 5645 5127 2386 7163 7611 94,831 7204 320 14,946 419 23,477 26,488 92,847 21,276 5326 9819 608 J.P. Deane et al. / Renewable Energy 80 (2015) 604e609 Fig. 2. Number of hours that selected lines experienced congestion. Table 10 Tonnes of CO2 emissions for each country. AI BE DE FR GB LU NL Total production. Germany and the UK with a high portion of coal fired generation are the largest absolute emitters in the region. Interestingly the CO2 emissions in Belgium increase significantly at the higher carbon tax level, linked to the greater amount of exports. The inclusion of an extra V25 of carbon tax is seen to reduce emissions by approximately 50 MT. Total generation cost is the cost including fuel, variable operations and maintenance costs, start and shutdown costs and emissions costs. Generation cost is the total variable cost of generation. Total generation costs are primarily a function of fuel type and system size and this is reflected in high total generation cost in Germany. Total system costs rise by approximately 10 billion euros when moving from a carbon tax of V20/tonne to V45/tonne across the region. Approximately 7.8 billion euros of this increase in cost is directly attributable to the change in carbon tax (Table 11). 5. Discussion and conclusion CO2 emissions (V20/tonne) CO2 emissions (V45/tonne) 13,292,776 3,879,131 236,575,446 5,313,165 97,804,477 220,357 52,659,860 409,745,212 8,409,913 7,736,829 197,255,119 1,882,753 96,148,749 217,730 45,214,760 356,865,853 lines particularly from France as power is wheeled through Belgium into the UK or into The Netherlands and on to Germany. The level of congestion places strong limitations on the ability of the system to move electricity around efficiently. The impact of a higher carbon price tends to reduce imports and exports across most countries; this is primarily because of its impact on the price of baseload generation such as coal and the reduced price difference between coal and gas fired generation. Germany is an exception to this trend as a higher carbon price drives an increase in imports particularly from France this is accompanied by a reduction in exports from Germany, particularly to Netherlands which reduces imports and generates more from local gas fired generation. The UK also reduces imports from France and Belgium in favour of CCGT's fired generation which is brought into merit by a higher carbon price. Annual CO2 emissions for each region are presented in Table 10 while Fig. 3 displays the carbon intensity of each power system measured as the total electricity produced in that region (including for export) divided by the total emissions associated with that The above analysis describes and details the development of a 2020 electricity market model calibrated to each country's NREAP projections for the Northwest region of Europe. The focus of individual NREAPs is generally limited to impacts at a Member State level. The value of this work is assessing the impacts at a regional and inter-Member State level. The results highlight the importance of integrated modelling of interconnected regions, as cross border power flows play a more significant role in market dynamics especially in the presence of geographically dispersed variable renewable generation sources such as wind and solar. The results show that the formulation of individual Member State National Renewable Energy Plans can lead to issues on interconnectors at a regional level. Flows on the interconnectors are an important aspect of any future EU market and the results here shows that congestion will be present on a number of key lines at long periods during the year. This is especially true for France and neighbouring regions as low cost nuclear and renewable electricity will flow to higher priced regions. The wheeling of power through Belgium and Netherland into either the UK or Germany is also seen at times. The work also highlights the contribution that integrated modelling can make to policy decisions by providing insight into the impact of varying levels of carbon pricing and in particular how this level of pricing impacts on total generation costs and emissions reductions in each specific country. Regional market prices, as inferred from the shadow price of electricity, are naturally seen to be lowest in regions with strong nuclear or renewable capacity. The impact of a higher carbon price has a lower impact on these regions. The carbon intensity of the full power system as presented here is expected to be approximately 236 gCO2/kWh for a carbon price of V20/tonne and reduces to 206 gCO2/kWh for an increased carbon price of V45/tonne. Germany with its legacy of coal fired generation and the UK are the largest emitters in absolute terms. Table 11 Total generation costs (V000) for each country for both carbon tax scenarios. Fig. 3. Carbon Intensity (g\kWh) for both carbon price scenarios. AI BE DE FR GB LU NL Total Total generation costs V20/tonne Total generation costs V45/tonne V1,151,278 V1,095,898 V12,942,379 V3,357,793 V9,265,986 V42,378 V3,645,669 V31,501,381 V1,371,389 V1,868,779 V16,849,366 V3,247,612 V12,048,453 V47,358 V5,935,828 V41,368,784 J.P. Deane et al. / Renewable Energy 80 (2015) 604e609 This work presents the first important step in the analysis of regional market integration in the EU. Further work will focus on the where increased interconnection would have the most beneficial impacts under a range of carbon scenarios and market structures within the study region. Acknowledgement The authors acknowledge the useful and constructive comments and ideas that were provided by Prof John FitzGerald and Prof. Sean Lyons from the Economic and Social Research Institute during the preparation of this paper. References [1] Battaglini A, Brtnik P, Komendantova N, Patt A. 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