System and market

integration of renewables

21 March 2018

Björn Verse, European Energy Policy Advisor

50Hertz‘ experiences and assessment

WindEurope Workshop

RES system integration

Brussels

Seite 2

Agenda

1. 50Hertz - part of the European electricity system

2. RES integration challenges in the 50Hertz grid area

3. 50Hertz‘ experiences with RES integration

1. Grid extension & Congestion management

2. Market development and integration

4. 50Hertz‘ assessment: Policy options on RES integration

1. Introduction:

50Hertz - part of the

European electricity system

Seite 4

50Hertz as part of the European Electricity System

1. 50Hertz

2. TenneT TSO

3. Amprion

4. TransnetBW

1

2

3

4 3

Seite 5

Transmission grids are the technical backbone of the energy

supply in Germany and in Europe

Source: 50Hertz * German Renewable Energy Law

Owner of the

transmission grid

System operator

Market developer

„Trustee“ for

managing EEG*

cash flows

In charge of operation, maintenance and the development of

extra-high-voltage lines and power junctions (substations)

as well as for the connection of large-scale generators and

consumers (including offshore)

Catalyst for the development of the energy market,

especially in Northern and Central-Eastern Europe.

Responsible for managing cash flows resulting from the

Renewable Energy Law (EEG).

Responsible for system stability of the transmission system

around the clock: frequency control and voltage regulation,

congestion management.

Seite 6

2013 2014 2015 2016 2017

FRA

SUI AUT

DK

SWE

CZ

7.340

21

BENELUX

2.699

21.266

7.340

21 44.789

9.624

95

7 Energinet.dk

TenneT PSE

ČEPS

Imports in GWh Exports in GWh 50Hertz Germany

Physical imports and exports Germany and 50Hertz

POL

Net exports in TWh

40,4

53,7

39,4

51,8

With 49 TWh in 2017 the 50Hertz grid area was a major electricity exporter

in Germany and Europe.

48,8

55,4

RES integration challenges

in the 50Hertz grid area

Seite 8

RES development in Germany

Wind PV Biomass

Markierungen proportional zur installierten Leistung

2000 2006 2017

- ~ 30,000 plants

- 1.665* MW installed Wind in

Germany

- ~ 221,000 plants

- 2.233* MW installed Wind in

Germany

- ~ 1,600,000 plants

- 45.628* MW installed Wind in

Germany

* BWE Figures

Massive RES growth in Germany since the introduction of the Renewables Energy

Law (EEG) in 2000 – with Wind and PV as the main growth drivers.

Seite 9

Disruptions / 100km line length

High grid stability despite fluctuating RES feed-in

RES share in final electricity consumption in 50Hertz grid area and Germany

Source: 50Hertz, *preliminary status as of 31.12.2017

0,0

0,5

1,0

1,5

2,0

2,5

3,0

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Ø TSO

50Hertz

0102030405060708090

100

2005 2009 2013 2017 2021 2025 2029 2033

Zielkorridor: Anteil EE amStromverbrauch in GER

Prognose: Anteil EE amStromverbrauch bei 50Hertz

Ist: Anteil EE am Stromverbrauchbei 50Hertz

53,4 %*

The 50Hertz grid area is frontrunner in integrating renewables while

guaranteeing a high grid system stability and security.

Target corridor: RES share in

final consumption in Germany

Forecast: RES share in final

consumption in 50Hertz grid area

Status quo: RES share in final

consumption in 50Hertz grid area

Seite 10

New German government RES targets:

Additional endeavours for the grid operators

New German RES target: 65 % RES share in electricity consumption by 2030

0

10

20

30

40

50

60

70

80

90

100

Wind onshore55% targetuntil 2030

Wind onshore65% targetuntil 2030

Wind offshore55% targetuntil 2030

Wind offshore65% targetuntil 2030

PV55% targetuntil 2030

PV65% targetuntil 2030

+ 16 – 20 GW

+ 2,5 – 5 GW

Insta

lled c

apa

city in

GW

+ 7 GW

69 87

15 19

69 75

results in additional 65 TWh from renewables

(in comparison to the previous German RES target of 55 % until 2030)

50Hertz‘ experiences with

RES integration

Grid extension & congestion management

Seite 12

Grid loads >5h/a

2009 2017

Load ≤ 50 % 50 % < Load < 70 % Load ≥ 70 % No indicator

Transmission grid congestions in the 50Hertz grid area

Görries

Güstrow

Bentwisch

Rostock

Lüdershagen

Lubmin

Iven

Sieden-brünzow

Passewalk

BertikowVierraden

Krajnik

Putliz

Perleberg

Stendal/West

Helmstedt

Wolmirstedt

Magdeburg

Förderstedt

Neuenhagen

ThyrowEisenhütten-stadt

Klostermansfeld

Marke

Schönewalde

Ragow

Wolkramshausen

Lauchstädt

Vieselbach

Eisenach

Mecklar

Altenfeld

Goldisthal

Redwitz

Rempten-dorf

Großschwab-hausen

Herlasgrün

Hradec

Zwönitz

Crossen

Röhrsdorf

Markersbach

Niederwiesa

Eula

Pulgar

TauchaSteumen

Schmöln

Freiberg Nord

Hagenwerder

Bärwalde

Graustein

Preilack

Dresden Süd

Henningsdorf

Brandenburg West

Mikulowa

Lüneburg

Krümmel

HH-OstHH-Nord

Brunsbüttel

HH-Süd

Dollern

Wessin

Altentreptow Nord

Parchim Süd

Hamburg Nord

Jessen Nord

Gransee

Altentreptow Süd

Putliz Süd

Heinersdorf

Kummerfeld

Audorf

WP Wikinger

Seite 13

* Preliminary data, Source: 50Hertz **Net costs as of 31.12.2017

0

2.000

4.000

6.000

8.000

10.000

12.000

2013 2014 2015 2016 2017

2.821

10.359

7.083

6.108*

2.189

0

50

100

150

200

250

300

350

400

2013 2014 2015 2016 2017

354

180 187*

89

63

“§13.2” national RES curtailment “§13.1” national redispatch “§13.1” cross-border/international

redispatch

Congestion management in the 50Hertz grid area

Congestion management costs were stable in 2017 at the level of previous years –

despite additional 2.100 MW of RES capacity added to the 50Hertz grid.

Congestion management volumes in GWh Congestion management costs in Mio € **

Seite 14

~ 20 GW

~ 25 GW

Increasing

transmission need

(25 GW)

Till 2025:

Increasing power transport capacities to

connect consumption centers with RES

generation

Increasing European connectivity to

improve RES and market integration –

the key element of EU energy policy

Targets

Rising RES shares require an adaptation of the

transmission grid infrastructure

A strategic grid development in a European context is the key for a successful

energy transition.

Seite 15

50Hertz-grid extension – “EnLAG” (2009):

Nr 3, part Vierraden – Krajnik (PL) 3 km

Nr 4, Lauchstädt – Vieselbach – Altenfeld

– Federal state Thuriginia / Bavaria 159 km

Nr 9, Görries – Krümmel 66 km

Nr 11, Neuenhagen – Wustermark 29 km

50Hertz-grid extension – “BBPlG” (2013/15):

Nr. 26, Bärwalde – Schmölln 46 km

Nr. 27, Abzweig Förderstedt 12 km

Nr. 28, Abzweig Parchim/Süd 1 km

Progress in transmission grid extension in the 50Hertz grid area

8% 92%

4% 96%

50Hertz

Deutschland

59% 41%

36% 64%

50Hertz

Germany

Operational: ~456 km In construction: ~129 km Permitting phase: ~629 km

Seite 16

0

2000

4000

6000

8000

10000

Jan2009

Jan2010

Jan2011

Jan2012

Jan2013

Jan2014

Jan2015

Jan2016

Jan2017

Jan2018

Grid extension decreases costs Avoided congestion management costs due to 50Hertz‘ Südwest-Kuppelleitung (SWKL)

Status as of 21.03.2018

High temperature lines

50Hertz Adaptation of

substation

First system SWKL

Second system

SWKL

Transmission lines Remptendorf-Redwitz / Altenfeld-Redwitz

Seite 17

50Hertz counter-measures to master unplanned load flows

through the European transmission grid

Re-dispatch

(„virtual PST“)

Phase shifters

(physical PST) Grid extension

- Reduces system-security-

relevant flows

- The challenge is to grant

efficiency and cost

effectiveness

- Reduces system-security-

relevant flows

- Requires major investments

- Grants security of the whole

electricity system

- Paves the way for an

integrated European market

Short-term Mid-term Long-term

50Hertz‘ experiences with

RES integration

Market development and integration

Seite 19

Day-Ahead-

Market

Intraday-

Market

mFRR aFRR FCR

t-6 years t-(1-3) days t-15min t+6sec t+30sec

Energy

Cross Border Capacity Auction

Auction

Cross Border

Transmission Capacities

Market

Coupling

(MRC)

Balancing

Capacity

mFRR Balancing Capacity

FCR / aFRR

Forward Market

t-1 week t+15min

Balancing

Activation of Balancing

Energy by Balancing

Service Providers

Market

Coupling

(XBID)

FCR – Frequency Containment Reserve (PRL)

aFRR – automatic Frequency Restoration Reserve (SRL)

mFRR – manual Frequency Restoration Reserve (MRL)

*

* Nordpool allows local trading within the control area until real time

Overview of current electricity market setup in Germany

Seite 20

Short-term markets – Trading volume has increased in order to

better balance RES forecast errors

0

5

10

15

20

25

30

0

1

2

3

4

5

6

7

8

Da

y-A

he

ad

Tra

din

g V

olu

me

in

TW

h p

er

mo

nth

Intr

ad

ay T

rad

ing

Vo

lum

es in

TW

h p

er

mo

nth

Intraday 15min cont. Intraday 15min auct. Intraday hours Day-Ahead

Day-Ahead Volume

Intraday Volume

Seite 21

Grid Control Cooperation (GCC) – Avoiding counteractive

balancing to reduce overall balancing costs

National GCC (Module 1-4)

International GCC (Module 1

Imbalance Netting)

CEPS

Swissgrid

Energinet.dk

TenneT

Elia (10/2012)

(10/2011)

(02/2012)

(03/2012)

RTE (4/2016)

(06/2012)

Germany (since 2008)

Module 1 - IGCC: Avoid counteractivation

Module 2: Common dimensioning

Module 3: Common procurement of capacity

Module 4 – National GCC: Activation based on common

Merit Order List (04/2014) APG

Seite 22

Eight countries

Cooperation

started in 2011

Main feature:

Imbalance netting

>300 Mil. EUR saved since 2011

50Hertz‘ achievements in integrating balancing markets

on a cross-border scale

Six countries

Cooperation

started in 2012

Main features:

Common procurement

International Grid Control

Cooperation (since 2012)

Frequency Control Reserve (FCR)

cooperation

Seite 23

Renewables and ancillary services

? Renewables have to contribute to balancing the system in the future

50Hertz stands for RES integration into the markets for ancillary services.

The very high share of RES in the 50Hertz control area demonstrates the high demand

for those activities.

Objective: Reducing the conventional must-run capacities!

Seite 24

Innovative approaches towards system and market integration

of renewables

Example battery storage

Five batteries in the control

area of 50Hertz participate in

primary control

E-mobility storing solutions

possible in the future

February 2016:

Prequalification of two wind

farms (60 MW) for tertiary

reserve by 50Hertz

Example negative

control power

Storm „Xaver“2013/12

After a loss of one two system

line, wind park brings voltage

back to the initial level

Example voltage control

RES system and market integration is proceeding. Besides voltage control, wind

has a strong potential for providing negative control power.

Seite 25

Concept of the WindNODE Flexibility platform

-60

-40

-20

0

20

40

60

80

100

Conventional power plants

and large Storage

mainly

wind generators

[€ / M

Wh

]

new

Flexibility providers

§ 13. 1 EnWG

“conventional redispatch“ § 13. 2 EnWG

“RES curtailment”

In order to reduce RES curtailment costs, additional flexibility sources will be

incorporated in the established redispatching process in the 50Hertz grid area.

Therefore new processes and communication structures (between grid

operators and between flexibility provider and grid operator) are needed.

WindNODE Flexibility Platform

Seite 26

Project targets

Efficient integration of 100% or even more RES-E into

the grid & system

Tangiable solutions, which are scalable

Strategy: Promoting flexibility in the grid

Intelligent interconnection of all elements in an

increasingly renewable-based electricity system

(Microproducers, prosumers, demand response, heat

storage, e-mobility, „Smart Home“ applicants)

DSOs and TSOs participate in the project

Optimization of volatile feed-in and demand

Preconditions

Digitalization

Enhanced price signals

Sector coupling and regulatory frameworks

German WindNODE project to foster RES integration

Source: WindNODE (www.windnode.de/konzept)

50Hertz‘ assessment

Policy options on RES integration

Seite 28

• Optimized usage of existing grid infrastructures

• Appropriate incentive framework for grid operators

• Improved permitting procedures, taking into account public acceptance

• Clear RES curtailment and compensation rules

• Bid-/market-based procurement of redispatch measures problematic due to

potential strategic bidding and market power of generators

• Fair cost-sharing principles for cross-border redispatch in order to incentivize grid

investments in the long-run

• Strengthening short-term wholesale markets

• Developing new flexibility markets through close TSO and DSO cooperation on

EU level

Policy options

Grid extension

Congestion management

Market development and integration

Thank you for your attention!

Björn Verse

European Energy Policy Advisor

Communications and Public Affairs

50Hertz Transmission GmbH

Heidestraße 2

10557 Berlin, Germany

+49 30 5150 2069

+49 151 6114 73 26

bjoern.verse@50hertz.com

www.50hertz.com

Brussels, 21 March 2018