Scaling up renewable energies

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Seite 1 - Experiences with high shares of fluctuating RE in electricity grids - Granada, April 26, 2016 Jens Burgtorf Head of Project ‚Technology Cooperation in the Energy Sector‘ Scaling-up Renewable Energies

Transcript of Scaling up renewable energies

Page 1: Scaling up renewable energies

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- Experiences with high shares of

fluctuating RE in electricity grids -

Granada, April 26, 2016

Jens Burgtorf

Head of Project ‚Technology Cooperation in the Energy Sector‘

Scaling-up Renewable Energies

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GIZ Services in the Energy Sector

Increase of capacity and competence

Provision of current expert knowledge about technology and management

Strengthening sector institutions and key actors

Creation of cost-effective pre-conditions

Assistance in creating supportive political conditions on the national level

Support in the implementation of national renewable energy strategies

Assistance in including the private sector

Support in creating a multi-stakeholder dialogue in the energy sector

Playing the role of a ‘trustworthy agent’ among political institutions, civil society, the research sector and the business sector

Supporting national and regional political processes

Technical advisory services

Technology transfers and introduction of innovative RE/EE technologies

Planning and implementation of demonstration projects

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GIZ Energy Projects Worldwide

GIZ

worldwide

energy projects: 137

Africa: 30 %

Asia: 27 %

Europe: 12 %

Latin America: 18 %

MENA region: 6 %

Trans-regional: 7 %

Current projects

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Objectives of vRE development in emerging and developing countries

Security of supply e.g. by reducing import dependence

Cost efficiency / economic benefits from vRE generation

Grid stability

Capacity expansion

Energy access

Climate change

Industrial and innovation policies

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Drivers and challenges for renewable energy

scale-up (RE) Current state

Strong demand growth

Partially weak infrastructure

Monopolistic market structure

Striving for cost efficiency and co-benefits (jobs

etc.)

Drivers for renewable energies

Strongly decreasing investment costs

Historically low interest level

Growing number of support initiatives

Price parity in important market segments

(particularly PV ↔ diesel generators)

etc.

Challenges for renewable energies

Historically low fossil fuel prices

Risk of geopolitical conflicts

Partially high financing and transaction costs

Lack of governmental guarantees

Strong interest in rapid capacity deployment

Uncertainty due to power market reforms

Uncertain development of climate finance

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Global framework conditions for RE have changed in recent years

Market transformation is disruptive and causes structural changes

Developing & emerging economies are embarking on RE “take-off”

phases

Mainstream concepts and methods used in 1st generation RE countries

(GER, ES, US) are no longer appropriate

Sectors with – intended - high shares of vRE require a consistent focus on

(i) Specific national challenges

(ii) Changing international boundary conditions for RE

(iii) Robust cost-benefit analysis for optimal, country specific RE

pathways

RE Outlook – 2016 and beyond

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• Almost any power system can digest 5%-

10% of vRE fairly easy

• Put “System friendly deployment” at the

center of your strategy

• Follow a system-wide approach for

integration

• Integrate evolving yield prognostics into

system operation from the start

• Avoid Hot Spots

IEA study supports benefits of vRE in 15 case countries

Flagship publication, IEA: The Power of Transformation, April 2014

However, the integraton of larger shares of vRE

require attention to detail

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Supporting the Development of “Sustainable

Energy Systems”

Erneuerbare Energie

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The System Perspective

Sustainable Power System

Does not focus on the specific costs and emissions of a technology or

project per kWh,

but on the total emissions and costs of the power system

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Boundary conditions for planning markets with

higher shares of vRE

• National Macro-economic perspective needed to guide discussion

• vRE to be integrated into historically grown systems and markets

• Paradigm: Generation is adapted to load -> Unit Comittment

• vRE intermittent & CAPEX dominated / Unit Commitment OPEX

oriented

• Technical Nature of vRE – high geospatial dependency

• Grid Integration a challenge

• Increased cycling from thermal generations [due to unit commitment

constraints] therefore needs attention to detail

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Boundary condition for planning markets with

higher shares of vRE – cont‘d

• High CAPEX necesitates sound financing conditions

• Market integration a challenge – Regulations and Tariffs needed

• So far, only few tools and methods which can adequately handle the

intermittent nature of vRE

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A systematic approach to vRE assessments

25.04.2016

In order to maximize the Net Benefits of vRE in existing power systems, a

closer look on the following aspects is needed during the planning phase:

• vRE Generation Potential

• Local (regional) and aggregated vRE generation profiles

• Saisonalities of Load and Generation

• Grid Integration

• Grid infrastructure including automation and Grid Code Compliance

• Power Flow, Short Circuit and Stability considerations

• Spinning Reserve Requirements

• Local (regional) Load Profiles and aggregated Load

• Market Integration

• Electricity Market / System Design and organization of energy sector

• Power Park Characteristics (CAPEX, OPEX) and generation alternatives

• Financing

• Risk Premiums for Legal, Country, FX, Regulatory and Procedural Risks

• Interest Rates, Liquidity of Capital Markets

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• “optimal dispatching solution”

will require increased cycling

from thermal generators

• Important to assess contractual

arrangements

Exemplary dispatch of a summer week in 2018, 2030, 2050

2018 2030 2050

Based on research by DLR

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Characteristics of Power Systems

Germany Majority of partner countries

Stagnating demand Dynamically growing demand

Highly meshed grid Weak grid and transmission

system infrastructure and

operation

Continuity of service Frequent blackouts

Power exchange Different institutional set-ups

Ability and willingness to

pay

(Energy) poverty

Connect & forget Where, when, & how much

power, which technology?

Mediocre RE resources Excellent RE resources

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National RE Governance for Optimal Scale-Up

National RE scale-up pathways need to:

• Handle the massive intended volumes efficiently

(by optimizing costs and benefits on project and

system level);

• be country-specific, and

• empower all stakeholders with cutting-edge

planning and implementation capacity

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Policies for National RE Pathways

• Develop plausible and evidence-based roadmaps to scale-up green

investments

• How much RE should be implemented at which point in time – and

where – to optimize national welfare?

• Formulate an overarching & transparent regulatory framework

• Clarify objectives, regulation, procedures, and responsibilities

• Ensure long-term, legally enforcable contracts for investors

• Best case: back decisions with government guarantees

Active public guidance to private sector RE investments will be

needed to avoid unnecessary losses.

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Why Policies Matter

Putting the value of RE to the system at the center of the

strategy will reduce (financial) costs:

• A plausible contribution of RE to the system‘s cost-

efficiency and stability will make future harmful changes less

likely, lowering politcal risk

• A plausible RE policy & deployment plan will assure a long-

term market volume for RE, thereby attracting investors

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Contact:

Jens Burgtorf ([email protected])

Head of Project ‚Technology Cooperation in the Energy Sector‘

Thank you for your attention

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BACK-UP SLIDES

Erneuerbare Energie 25.04.2016

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Integration challenge for higher shares of vRE

The power system and power markets will need to cope with a highly

fluctuating power production from wind and solar [Case for Germany]

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The Evolution of German RE Policies

1st Generation (early 1990s)

Objective: R&D,

technology demonstration, initial diffusion to citiziens

Instruments: „1000 roofs programme“ & „100 000 roofs programme“

Subsidies initially paid up front against kWp (capacity)

2nd Generation (2000s)

Objective: Technologies (especially PV) mature, but expensive thus, focus lies on bringing down costs via Economies of Scale (EoS)

Instrument:

Renewable-Energy-Act (EEG) with incentive paid against „kWh results“ (energy yield)

3rd Generation (current)

Objective: Massive and cost-efficient integration of RE into national and EU power systems.

Instrument: Intelligent, evolving and cost-benefit optimized bundle of market-based incentives and regulatory measures

Policies that have been adjusted to boundary conditions and national priorities

(t)

Technical feasibility Reduced costs System Perspective: Low cost at high value