Flexibility options

applied today:
Examples from
Germany
Philipp Godron, Agora Energiewende

Jakarta, 14 November 2018

The Energiewende is a long-term energy strategy, aiming to
phase out nuclear power and reduce greenhouse gas
emissions significantly
Gross electricity generation in Germany 1990, 2017 and 2050
Phase out of Nuclear Power
700 Gradual shut down of all nuclear power plants until
2022
600

500 Reduction of Greenhouse Gas Emissions

Reduction targets below 1990 levels:
400
TWh

- 40% by 2020; - 55% by 2030; - 70% by 2040;

300 - 80% to - 95% by 2050

200 Development of renewable energies

Share in power consumption to increase to:
100 New government target:
40 - 45% in 2025; 55 - 60% in 2035; ≥ 80% in
0
65% RE by 2030!
2050
1990 2017 2050
Increase in efficiency
Renewables Nuclear Lignite Hard Coal Natural Gas Others
Reduction of power consumption compared to
2008 levels: - 10% in 2020; - 25% in 2050
AGEB (2016), BReg (2010), EEG (2014), own calculations * preliminary

2
Renewables have become the most important source in the
electricity system – followed by lignite and hard coal
Share in gross electricity generation by fuel 2017 Gross electricity generation by fuel 1990 - 2017

700
Wind + solar 623 634 648 655

Oil + cap.: 99 GW 577

600 550
Natural other: 537 62 87
73 81
gas: 13% 4% 49
500 36 41 118 93
Onshore
Nuclear: wind: 14% 134 117
143
12% 141

TWh
400 147
155 148
Offshore wind: 3%
Renewables: 146
300 154
33% 148
Hard coal: Solar: 6% 171 143 76
92
14% 200
Biomass (inc. 141
waste): 8% 163
170 218
100 153 154 189
Lignite: 23% Hydro: 3% 105
38 63
0 20 25
1990 1995 2000 2005 2010 2015
Renewables Nuclear Lignite Hard coal Gas Oil Other

AGEB (2017) AGEB (2017)

3
A comparative glance between the German and Indonesia
power mixes shows several differences
Power generation (TWh) in Germany and in Indonesia (2017) Comparative indicators between Indonesia and Germany (2017)

700
ID DE
600
Yearly power consumption [TWh] 220 600
500
Peak load [GW] 33 81
400
Share of coal (hard coal and 53% 37%
TWh

300 lignite) [% power production)

200 Share of vRES 1% 23%
100
[% power production]
Total population [Million] 260 81
0
Indonesia Germany GDP [Billion $] 932 3 355
Renewables Nuclear Coal Natural Gas Other

AGEB (2018), RUPTL (2017) AGEB (2018), RUPTL (2017)

4
5

Flexibility, in Germany, is a matter of today already:

In Oct. 2017, strong wind and continued operation of nuclear,
coal, and natural-gas CHP plants led to negative electricity prices
Net power generation and consumption by energy source and wholesale
Net power generation by conventional energy sources, 27 to 31 October 2017
market prices, 27 to 31 October 2017

100 100
Net electricity production and consumption

80 80
60 60
40 40
20 20

Euro/MWh
(GW)

0 0
-20 -20
-40 -40
-60 -60
-80 -80
-100 -100
27-Oct 28-Oct 29-Oct 30-Oct 31-Oct
Biomass Hydro
Offshore Wind Onshore Wind
Photovoltaics Conventionals
Demand Wholesale prices (right axis)

Agora Energiewende 2017 Agora Energiewende 2017

Don‘t be afraid of the flexibility challenge:
How Germany coped with the partial solar eclipse
in March 2015
Solar power production on March 20, 2015 Due to the solar eclipse, electricity production from solar PV
ramped down 12 GW within 65 minutes, and ramped up again
roughly 19 GW within 75 minutes

These ramps are unusual today, but will occur frequently in

2030 in Germany, when roughly 50% of electricity will be
produced by renewables
19 GW
Electricity supply remained stable during the hours of the
eclipse. Flexibility was traded in the intraday market.
Solar power production on March 20, 2015
12 GW Prices and volumes traded on the Intraday market, March 20, 2015

Agora Energiewende (2015): Die Sonnenfinsternis 2015 www.epexspot.com

Several options can deliver flexibility at various costs
Costs/savings of one GW of flexibility in Germany (43% renewable scenario)
→Grids, flexibilisation of conventional
Mio. € / GW / a
generation and demand side
200
Extra costs

management (DSM) are the

150 cheapest flexibility options in GER
100
50 →Here, the flexibility needs are so far
met by flexible power plants and
0
interconnectors with neighbours
-50
Savings

Nachbarstaaten

zusätzliches

Kurzzeitspeicher

Kurzzeitspeicher
Flexibilisierung

Langzeitspeicher
→From an overall system perspective,
Netzanbindung

zusätzliche

new storage is required only at very

DSM

Grid Flexibili- Short- Short-

KWK

Long-term

720h
connection sation of DSM term high shares of renewable energies.

8h
to conven- 1h term
storage
storage storage
tional (720h)
neighbours (1h) (8h) →However, short-term storage can
CHP
already today deliver several ancillary
services at competitive costs.
Agora Energiewende

7
Variable output must not be confused with uncertain output!
Difference between day-ahead wind energy forecast and real feed-in
(week in May 2015 in the North-East of Germany) → Forecasting methodologies have
greatly improved in Germany
recently
→ The largest share of the difference
between day- ahead forecast and
and real feed-in is balanced by well-
functioning short-term markets
(intraday and balancing)
→ Only minor deviations need to be
covered by the system operator

50 Hertz

Agora Energiewende | 11 Key Points for a Consensus on Coal 8

In Germany, balancing costs have declined over the last seven
years: improvements on the balancing market
have outweighed the impact of increasing renewables.
Balancing reserve and cost development in Germany since 2008

Since 2008, vRES capacity has been multiplied

by three in Germany, while balancing costs have
decreased by 50% over the same period.
Other factor have overcompensated the VRE
expansion (depressing the requirement for
balancing reserve requirement) :
- TSO cooperation
- More competitive balancing power markets
- Improvement of forecasts
- More liquid spot markets

Adapted from Hirth et al. (2015)

9
Large countries benefit from significant internal wind and
solar power smoothing effects
Smoothing effects of vRES feed-in within Germany for calendar week 9*
Normalized solar power generation for German regions

Fraunhofer IWES (2015) * based on 2011 weather data

10
Market integration limits wind & PV curtailment (or storage
needs) at times with high feed-in, increasing RES value
Curtailment of vRES within PLEF and Europe in autarchy and integration
scenarios
Curtailment is greatly reduced by market
integration

Curtailment in autarchy case is ten times

higher due to lack of exchange options with
other regions

Not only cross-border grids are important,

but also enough transfer capacities within
countries must be available

Still, avoiding curtailment altogether would

be difficult to achieve just by increasing
transfer capacities, as highly correlated
Fraunhofer IWES (2015) feed-in situations can occur

Vienna, 22 February 2017 | Christian Redl 11

In Europe, seasonal weather patterns match monthly wind and
PV generation, yielding a more stable total renewables output
Monthly wind power and PV generation in Europe in 2030

TWh

Fraunhofer IWES (2015) Weather year 2011

Vienna, 22 February 2017 | Christian Redl 12

How are grid operation and grid planning intertwined?
The power market (“financial“) and actual operation of the grid (“physical“)
≠
Power market:
“copper plate“ Grid operation
ct/kWh • Bottlenecks in distribution
Supply and transmission grid: no
more “copper plate“ in real
time. Local congestions may
occur.
• Avoid exceeding limit values
(current, frequency, voltage).
• Provision of ancillary
Demand services in order to ensure
kWh grid stability and reliability.
Own illustration
A word on grid integration…
Grid planning
→ If there are delays in grid expansion
(e.g., in regions with high RES-E
deployment), grid bottlenecks may occur.
Grid operation
→ In case of congestion grid operators may
have to redispatch or curtail generation
to ensure system stability.
------------------------------------------------------
→ There is an optimum betweeen
“classical“ grid expansion and utilisation
of intelligent network technologies +
flexibility options.
13
“Emergency measures“ taken during grid operation:
redispatch of conventional power, curtailment of renewables
The volume of redispatch and curtailment has been increasing over the years.
Redispatch and curtailment:

• 3%-peak-shaving in grid planning.

• Curtailment is a measure of last resort

(RES-E generation and CHP).

• Most of RES-E generation is curtailed in

the North of Germany (more than two
thirds in the Federal State of Schleswig-
Holstein).

• Costs for redispatch and curtailment are

socialized among electricity consumers
via network charges.

Ecofys (2017) based on data by Bundesnetzagentur and MELUR (Smart-

Market-Study on behalf of Agora Energiewende)
Dr. Stephanie Ropenus 28th November 2017 14
Key priorities for
managing the
flexibility challenge
More grids to transport wind energy to the south of Germany
AND promotion of regional markets as a new framework for
decentralization
Installed wind capacity (103 GW,
Scenario „Best Sites“) 2033
Fraunhofer IWES (2013)
German network development plan
2025 Reinforcing the grid infrastructure is crucial
(wind power will be installed mainly near the coast
in the north of Germany, but key consumptions
centres are located in the south)
→ There has been a delay in grid expansion,
thus redispatch, loop flows and curtailment
have increased significantly
→ New policy to use underground cables
whenever necessary. Measures to reduce
consternation and compensation for
concerned parties need to be considered from
the very beginning
Decentralization is a new and lasting structural
characteristics of the Energiewende:
- congestion in the grids are likely to persist
- citizen and politic attach great importance to
decentralized solutions.
BNetzA (2015)
16
Enhance the cooperation between regions / countries and
deepen power market integration
Time series of onshore wind generation in May 2030 at different levels of aggregation
Due to “smoothening effects”, wind output is less
volatile and has fewer extreme values at higher
aggregation levels (regional, EU).

The flexibility requirements of interconnected

power systems decrease, implying :
- reduced residual load gradients & balancing
requirements;
- less renewables curtailment.

Cross border system integration (grid

interconnection, cooperation in system operations
and market design) is key for minimizing flexibility
challenges.

Fraunhofer IWES (2015) * One pixel is equivalent to an area of 2.8 x 2.8 km; PLEF are the countries AT, BE, CH, DE, FR, LU, NL

17
Storage: Future market for battery systems can be small or large,
depending on regulatory framework and development of EV market
Estimated future markets of battery storage in Germany (GW) The costs of lithium-ion batteries are declining
fast. E-mobility may experience its commercial
breakthrough in the 2020s. Household storage
will also become cheaper
180 Balancing
160 The market for residential storage depends on
140 Residential how taxes and tariffs are set for households and
120 storage commercial customers – the current business
100 case is based on avoiding these taxes and tariffs.
80 Mean demand (2014)
Electric Vehicles constitute the largest share of
60 Transport the storage market potential and could potentially
40 constitute twice the size of power demand. This
20 will have impacts: car batteries may be used
0 directly in the power system or via 2nd life use
min max min max min max
2023 2033 2050 Balancing Market is small and will not lead to
great demand for battery systems; projects that
are already under way will probably already meet
Agora Energiewende 2014 the current demand

18
ICT as an enabler for more flexibility:
Market actors (producers, direct marketers, suppliers,
consumers) can trade their products within shorter timeframes.

→ Coordination problem: communication

and control of a great number of actors.

→ Interplay of power markets and the grid:

in the future more short-term products
and higher flexibility of market actors
needs to be incentivized.

→ Incentives for deployment of flexibility

options also reduce “emergency
measures“ such as curtailment of RES-E
generation.

→ ICT technically enables communication

and control of decentralized units and
flexibility options. However, incentives for
flexibility are still crucial to reap benefits.

Dr. Stephanie Ropenus 28th November 2017 19

RES-E generation contributes to system stability in Germany
already today by providing ancillary services.

Ancillary services by RES-E plants

→ Remote control of renewable installations (wind turbines & PV > 100 kW)
→ Frequency control: (negative) regulating power
→ Reactive power capability
→ Fault ride through

Reduction of conventional must run when RES-E takes on more system responsibility.

→ Grid codes stipulate minimum technical requirements for wind turbines and solar PV.
→ Question of what can be procured additionally on ancillary services markets?
→ Market access for renewable energy generators necessitates more flexible access conditions
(example: regulating power market participation of wind power producers in Denmark).

Dr. Stephanie Ropenus 28th November 2017 20

Managing the flexibility challenge: main takeaways
→ Wind energy and solar PV are reshaping power systems. Hence, it is crucial to increase system flexibility

→ Various flexibility solutions exist already today for coping with the fluctuating output of wind and solar energy

→ The flexibility needs in high-RES systems are so far largely met by flexible power plants [see afternoon
presentation]

→ Power system integration at regional and international level mitigates flexibility needs due to smoothing
effects

→ Price signals of a functioning power market (or simulating one) incentivize generators and consumers to
adjust their generation and consumption

→ Information and communication technologies help provide real-time information and control of power system
operation in world with high shares of Renewables

→ Storage solutions are required only at very high RES levels (>50-60%). However, new markets for battery
storage and power to gas technologies are expected to emerge, especially in the transport and chemical sector

23
The good news: system reliability can remain high while the
share of renewables increases
SAIDI (System Average Interruption Duration Index) Germany 2010 - 2016

30

25
2.9
20 2.8
2.6 2.6
2.6 2.5
min/a

2.6 2.8
15
2.3 2.2 2.1
10 21.5 19.3
16.9 14.6 14.9 15.3 15.9 15.3
12.3 12.7 12.8
5

0
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Medium voltage SAIDI Low voltage SAIDI

BNetzA

Dr. Stephanie Ropenus, Agora Energiewende 17th July 2018 22

Agora Energiewende T +49 (0)30 284 49 01-00 Please subscribe to our newsletter via
Rosenstraße 2 F +49 (0)30 284 49 01-29 www.agora-energiewende.de
10178 Berlin @ info@agora-energiewende.de www.twitter.com/AgoraEW

Thank you for

your attention!

Questions or Comments? Feel free to contact me:

Philipp.Godron@agora-energiewende.de

Agora Energiewende is a joint initiative of the Mercator

Foundation and the European Climate Foundation.
More information and studies available at our website
www.agora-energiewende.org

24
Market actors trade supply and demand on power exchanges
and bilaterally. The central real-time balancing market
manages deviations between expectations and outturn
Sequence of market-based transactions in the German power market

“Flexibility markets”
Central coordination by TSOs

Forward Day-ahead Intraday Balancing

markets market market market
Energy markets for decentral transactions

Years to weeks 12 AM: Day-ahead auction Trading of 60-/15-minute products “Gate closure” Real-time delivery
before delivery for each hour of next day till 30 min. before delivery 30 min. before delivery for 15 min. intervals*

Own illustration * Imbalance penalties incentivise market actors to obey physically to their market trades

Brussels, 15 September 2017 | Christian Redl 25