assessment of the required share for a stable eu electricity supply until 2050 - 2011 - kirchsteiger

8/3/2019 Assessment of the Required Share for a Stable EU Electricity Supply Until 2050 - 2011 - Kirchsteiger

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European Commission

Assessment of the Required Share for aStable EU Electricity Supply until 2050

Final Report

Wietze Lise, Jeroen van der Laan, Koen RademaekersECORYS Nederland BV

In consortium with:Frans Nieuwenhout

Energy research Centre of the Netherlands (ECN)

Christian KirchsteigerDG Energy

Contract No TREN/R1/350-2008 Lot 2

EUR 24996

October 2011

Directorate-General for Energy


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LEGAL NOTICEThis study has been carried out for the Directorate-General for Energy in theEuropean Commission and expresses the opinion of the organisation undertakingthe study. These views have not been adopted or in any way approved by theEuropean Commission and should not be relied upon as a statement of theEuropean Commission's or the Energy DGs views.The European Commission does not guarantee the accuracy of the informationgiven in the study, nor does it accept responsibility for any use made thereof.Copyright in this study is held by the European Union. Persons wishing to use thecontents of this study (in whole or in part) for purposes other than their personaluse are invited to submit a written request to the following address:

European CommissionEnergy/Mobility and Transport DGLibrary (DM28, 0/36)B-1049 Brussels

Fax: (+32-2) 296.04.16


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Table of contents

Assessment of Needed Share for Stable EU Electricity Supply until 2050 3

Table of Figures and Tables 4Figures 4Tables 4

Preface 5Executive Summary 71 Introduction 9

1.1 The European Energy Strategy 91.2 Objectives and Output of this Study 111.3 Structure of this Report 11

2 Background and Literature Review 132.1 General Approach 132.2 Europes Energy Infrastructure 132.3 Integration of Intermittent Electricity Generation 152.4 Existing Scenarios on Intermittent Electricity Generation Integration 17

3 Quantification of Integration of Electricity Generated by Intermittent Sources 213.1 General Approach 213.2 Selected Scenarios on Intermittent Generation Integration 223.3 Estimating Costs of Integration of Electricity Generated by Intermittent Sources 233.4 Estimating Stable Supply versus Intermittent Generation Integration 24

4 Results and Assessment 274.1 Assessment of the Balancing Need due to higher shares of Intermittent Generation 274.2 Adaptation to Higher Shares of Intermittent Generation and Cost Estimates 294.3 Measures for Stable Supply versus Higher Shares of Intermittent Generation 324.4 Analysis of Drivers for increasing Shares of Intermittent Generation 34

5 References 37Annex A: Definitions 39Annex B: Graphs for Alternative Scenarios 41


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4 Assessment of Needed Share to Secure EU Electricity Supply until 2050

Table of Figures and Tables

Figures

Figure 1 - Description of Task 1 .....................................................................................................................................13

Figure 2 - Energy demand projections under different scenarios................................................................................... 20

Figure 3 - Description of Task 2 and Task 3 ...................................................................................................................21

Figure 4 - Regional division of EU-27.............................................................................................................................23

Figure 5 - The challenge for balancing due to higher shares of intermittent generation in 2030: (residual load duration

curve) .............................................................................................................................................................................28

Figure 6 - The challenge for balancing due to higher shares of intermittent generation in 2050: (residual load duration

curve) .............................................................................................................................................................................28

Figure 7 - The challenge for balancing due to higher shares of intermittent generation in 2050: hourly load variation .. 29

Figure 8 - Adaptation cost estimates to accommodate increasing shares of intermittent generation............................. 31

Figure 9 - Link between the share of flexible supply versus the share of intermittent generation................................... 32

Figure 10 - Link between the balancing need versus share of intermittent generation................................................... 33

Figure 11 - Link stable supply, net balancing need, share of intermittent generation cost and balancing cost for

integrating increasing shares of intermittent generation into the interconnected EU-27 power system.......................... 35

Figure 12 - Link between the share of flexible supply versus the share of intermittent generation................................. 41






Figure 18 - Link between the balancing need -peak versus share of intermittent generation......................................... 44




Tables

Table 1 - Equivalence between three sets of scenarios ................................................................................................. 19

Table 2 - Assumptions for the capital costs for adaptation to intermittent RES shares .................................................. 30

Table 3 - Fuel and CO2 price projections........................................................................................................................ 31

Table 4 - Assumptions for other adaptation cost items to intermittent generation shares .............................................. 31

Table 5 - Assumptions to derive levelised costs of intermittent generation .................................................................... 32


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Preface

The main objective of the study Assessment of the Required Share for a Stable EU Electricity

Supply until 2050 is to quantify the overall limits of energy system and thus supply stability

under the likely conditions of significantly increased future shares of generation from intermittentsources.

The emphasis of this Final Report is to present the results of the above mentioned study. As such,

the report includes a review of literature on European energy (infrastructure) policy and the

integration of electricity generated from intermittent sources (thus the generation of power that is

non-continuous) and the prospective scenarios for the embedded integration of intermittent

generation. Therefore, key scenarios from different institutions and data sources for 2050 (and

2030) have been analyzed, specifically based on the achievement of the targeted 80% reduction in

greenhouse gases in 2050 from 1990 levels. For the drafted scenarios a merit-order curve is

derived to show the increasing marginal costs for embedding higher levels of intermittent

generation technologies. In addition, suggestions are made for measuring stable supply, which is

a minimum needed level of stability to balance the power system in real time.

The policy implication of this analysis is that there are increasing costs associated to the

deployment of intermittent generation technologies in the EU-27. If the cost of integrating

intermittent generation was to be limited to about 25 billion EUR per year, no more than about 40%

of intermittent generation can be integrated in the European power market. The final choice of an

acceptable cost increase will be a political choice.

This report was written by Ecorys and ECN. From both organizations, the following people have

contributed to this report: Dr. Wietze Lise (Ecorys), Mr. Jeroen van der Laan (Ecorys), Mr. KoenRademaekers (Ecorys) and Mr. Frans Nieuwenhout (ECN).

We would like to thank Eurelectric for providing valuable data and information to the team.

This report was commissioned and financed by the Commission of the European

Communities. The views expressed herein are those of the Consultant, and do not represent

an official view of the Commission.

Rotterdam & Ankara, 4 October 2011


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Executive Summary

Power system balancing will become increasingly important to securing a stable European energy

supply. This will also become a significant challenge as the share of electricity generation from

intermittent energy sources (e.g. wind and solar PV) increases. This will result in a cost-increasingmerit order curve for adaptation to higher shares of intermittent generation, or increasing values for

stable supply indicators. The main objective of this studyis to show, in a quantitative way, the

required share of stable supply under various future shares of intermittent power generation.

This study has generated the following outputs:

1. Literature and data review of intermittent generation and existing scenarios;

2. Assessment of costs related to increasing shares of intermittent generation;

3. Assessment of stable supply by developing quantifiable indicators of the two different aspects of

stable supply, namely

a. Share of flexible supply (generation units which can be ramped up and down quickly to

respond to intermittent supply and demand variations);

b. The balancing need (which measures the needed flexibility of the power system as the

difference between peak and off-peak residual (demand net of intermittent generation)).

Based on the literature survey, the most appropriate scenario for this study was identified as the

IRENE-40 RES scenario, which also compares well to the ECF 80% RES scenario. Under this

scenario a reduction (with respect to 1990 levels) of 95% greenhouse gas emissions in the power

sector is realized by 2050 and, in addition, 80% of the generation is from renewable energy sources

(RES). This scenario was also chosen, because it can show the impact of the largest shares of

intermittent generation (up to 75%), which is the main objective of this study.

The EU-27 has been disaggregated into nine European regions, following the ECF 2050 Energy

Roadmap. On the one hand, it is not logical to speak about country-level power system

characteristics in 2050 (and 2030), because of the ongoing process of cross border market

integration. On the other hand, it is not useful to show EU-27-wide aggregates, as it would hide the

regional differences. To strike a compromise between these two extremes, data is used for nine

regions, following the ECF 2050 Energy Roadmap.

In order to quantify the costs of integrating electricity generated from intermittent sources an

Adaptation Cost Model (ACM) was developed to analyse the flexibility measures needed to

accommodate varying shares of intermittent generation to the EU power system in 2050.

The adaptation cost model is based on the following steps:

1. Derivation of the yearly peak and off-peak from the residual load duration curves (which is the

normal load duration curve minus intermittent generation (defined in this study as the total sum

of wind and solar PV)).

2. Derivation of the amount of flexible supply (defined in this study as the total sum of hydro, gas

and oil) and the amount of intermittent generation, over total installed capacity.

3. Division of EU-27 into nine regions for two years (2030 and 2050) to obtain reliable data for (v1)

intermittent generation, (v2) balancing need (defined in this study as the difference between

peak and off-peak over peak) and (v3) flexible supply.

4. Establishing the link between intermittent generation with balancing need (e1) and intermittent

generation with flexible supply (e2) through two regression equations.


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8 Assessment of Needed Share to Secure EU Electricity Supply until 2050

5. Based on an amount for the yearly peak for EU-27 (700 GW), the yearly off-peak can be

calculated through a derived regression equation between balancing need and intermittent

generation (e1).

6. The gross balancing need is defined as the difference between peak and off-peak electricity

demand (in GWs). The term balancing is used here to stress the importance of balancing

demand and generation.

7. The amount ofstable supplyfollows from the derived regression equation between flexible

supply and intermittent generation (e2).

8. The net balancing needis defined as the gross balancing need minus stable supply. The value

is non-negative, where a negative value means that there is no net balancing need.

9. In order to meet the net balancing need, abatement options and costs are derived, enabling

calculation of a merit order curve for intermittent generation integration into the grid.

10. For comparison, the intermittent generation costis also calculated, defined as the cost per

installed capacity (expressed in /kW/year), accounting for all capital and operational costs.

11. These steps when performed for increasing shares of intermittent generation lead to a curve for

balancing cost. Stable supply, net balancing need, intermittent generation cost and balancing

cost can all be presented in one graph to complete the adaptation cost model. The following

graph shows the result.

Figure - Link stable supply, net balancing need, share of intermittent generation cost and balancing cost for

integrating increasing shares of intermittent generation into the interconnected EU-27 power system

0

50

100

150

200

0% 20% 40% 60% 80%

Intermittent

generation

share

Billionperyear

0

400

800

1200

1600

GW

Balancingcost

Intermittentgenerationcost

Stablesupply(GW)

Netbalancingneed(GW)

Note: This graph combines the results of calculations of stable supply indicators, (residual) load duration curves and the

intermittent generation adaptation cost merit order curve.

Source: Ecorys calculations with the adaptation cost model.

The policy implication of this analysis is that there are significantly increasing costs

associated to the deployment of intermittent generation technologies in the EU-27, and in

that sense limits to further deployment. If the cost of integrating intermittent generation was

to be limited to about 25 billion EUR per year, no more than about 40% of intermittent

generation can be integrated in the European power market. The final choice of an

acceptable cost increase will be a political choice.


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9Assessment of Needed Share for Stable EU Electricity Supply until 2050

1 Introduction

This report on the Assessment of the Required Share for a Stable EU Electricity Supply until

2050 aims at identifying the requirements and preconditions for reliable integration of large(-r)

shares of intermittent generation from a balancing perspective into EU power systems over mid-and long-term future perspectives (2030 and 2050).

This report includes a literature review (Task 1) on the role and integration of intermittent generation

within the Energy Roadmap 2050 and prospective foresights of embedding (larger shares of)

intermittent generation, given existing scenarios. However, the main activity carried out in this study

is the construction of merit-order curves of flexibility measures to accommodate intermittent

generation (Task 2). These are based on estimates of the extent of adaptation measures needed

and their costs. These are presented graphically, with the share of stable supply and the balancing

need shown as a function of the share of intermittent generation. Finally, the relationship between

stable supply, net balancing need, share of intermittent generation cost and balancing cost has also

been presented graphically (Task 3).

Power system balancing will become increasingly important to securing a stable European energy

supply. This will also become a significant challenge as the share of electricity generation from

intermittent energy sources (e.g. wind and solar PV) increases. This will result in a cost-increasing

merit order curve for adaptation to higher shares of intermittent generation, or increasing values for

stable supply indicators. The main objective of this study is to show, in a quantitative

way/approach, the limits of system stability (or required share of stable supply) under

various future shares of intermittent power generation.

1.1 The European Energy Strategy

Energy is what makes Europe tick.1

Therefore, it is essential that the EU tackles the (major)

energy challenges (i.e. climate change, affordability of energy, stable supply). In response to these

challenges, the EU has put in place an ambitious energy policy, covering the whole lifecycle of

energy generation and from different sources. It is tailored to different policy initiatives and

strategies to stimulate the transition to a low-energy economy, whilst the energy that is consumed

becomes more sustainable, competitive and secure.

According to the current Commissioner for Energy, Gnther Oettinger, the energy challenge is

recognized as one of the greatest tests faced by Europe today. In particular, rising energy prices

and increasing dependency on energy imports, jeopardise Europe's economic competitiveness,

raising the risk of gradual deindustrialisation.

On 10 November 2010, the European Commission adopted the Communication on Energy 2020

A strategy for competitive, sustainable and secure energy which sets the priorities in the field

of energy for the next 10 years, including the actions needed for tackling the challenges of: the

achievement of an (energy) market with competitive prices, realising potential energy savings,

1 See for instance: http://europa.eu/legislation_summaries/energy/index_en.htm


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10 Assessment of Needed Share for Stable EU Electricity Supply until 2050

supporting further technological improvements and securing energy supplies. The identified

priorities and the formulated actions are related to:2

- The achievement of an energy-efficient Europe;

- The building of a Pan-European integrated energy market;

- The achievement of the highest level of safety and security and empowering consumers;

- Extending Europes leadership in energy technology and innovation;

- The strengthening of the external dimension of the EU energy market.

On the basis of these priorities, DG Energy is preparing concrete, legislative initiatives and

proposals which will fit into the energy agenda for 2020 (and 2050). Meanwhile, (energy) policy

initiatives have been drafted towards an EU energy infrastructure,3

energy efficiency within the EU4

and smart grids.5

However, the latest initiative and the reason for conducting this study is the

(on-going) process of preparing the EU Energy Roadmap 2050.

The EU Energy Roadmap 2050

The Commission Services are establishing different roadmaps (e.g. DG CLIMA Roadmap for

moving to a competitive low-carbon economy in 2050 (published in 03/2011) and the DG ENV

Roadmap on Resource Efficiency (published in 09/2011)) as a focused and tailored follow-up andpath-way of the Roadmap for a Low-Carbon Economy by 2050. This latter roadmap focuses on

reductions in greenhouse gas (GHG) emissions across the EU economy and in the context of the

targets set by the European Council to reduce GHG emission levels by 80-95% (95% in the power

sector) by 2050 with reference to 1990 emission levels. In particular, the European Council has

recognised that, in order achieve these targets, a true revolution is needed in the way that energy is

generated and provided to customers. Therefore, DG Energy is working on an EU Energy 2050

strategy which will provide (mid- and) long-term actions, based upon the overall framework of the

Europe 2020 strategy. As such, the EUEnergy Roadmap 2050 (planned to be published in

11/2011) will be driven by the need forenergy security, sustainabilityand competitiveness

given the changing global energy context.

The mission of the EU Energy Roadmap 2050 is to provide a practical, independent and objective

analysis of pathways to achieve a low-carbon economy in Europe, in line with the energy security,

environmental and economic goals of the European Union. This is consistent with the established

objectives of EU energy policy sustainability, energy security and competitiveness with a focus

on cost-effective decarbonisation. After the publication of the EU Energy Roadmap 2050, clear

sectoral targets could be proposed for the mid-term (e.g. 2030) and long-term perspectives (2050

and beyond).

In this context, stable supply is an important topic, which includes the important aspect of overall

system stability under conditions of future integration of high shares of intermittent generation. Themain objective of this study is to quantify the overall limits of energy system and thus

supply stability under the likely conditions of significantly increased future shares of

generation from intermittent sources.6

2 European Union (2010), Energy 2020 A Strategy for Competitive, Sustainable and Secure Energy, European

Commission Directorate-General Energy, November 2010, Brussels3

European Union (2011), Energy Infrastructure Priorities for 2020 and beyond, a blueprint for an integrated European

Energy Network, European Commission Directorate-General Energy, Brussels4 European Union (2011), Energy Efficiency Plan 2011, COM (2011) 109, European Commission Directorate-General

Energy, March 2011, Brussels5 European Union (2011), Smart Grids: from innovation to deployment, COM (2011) 202, European Commission

Directorate-General Energy, April 2011, Brussels6

European Union (2011), Background Paper: Energy Roadmap 2050 State of Play, Background document to the EUInformal Meeting of Energy Ministers, European Commission Directorate-General Energy, May 2011, Brussels


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1.2 Objectives and Output of this Study

The general objective of this study is to assess the required share for stable EU electricity supply

until 2050 (and on the mid-term 2030), given the increasing shares of intermittent generation to be

integrated into the power system.

The following methods were used:

Review of literature and data for intermittent generation and existing (long-term) scenarios;

Compilation of a reliable and comparable set of scenarios for the assessment;

Constructing merit-order curves for the scenarios on adaptation costs to increasing shares of

intermittent generation;

Assessment of intermittent generation and balancing costs, balancing needs and stable supply.

The study generated the following outputs:

1. Literature and data review of intermittent generation and existing scenarios;

2. Assessment of costs related to increasing shares of intermittent generation;

3. Assessment of stable supply by developing quantifiable indicators of the two different aspects of

stable supply, namelya. Share of flexible supply (generation units which can be ramped up and down quickly to

respond to intermittent supply and demand variations);

b. The balancing need (which measures the needed flexibility of the power system as the

difference between peak and off-peak residual (demand net of intermittent generation)).

1.3 Structure of this Report

The remaining Chapters of this Final Report are organized as follows:

Chapter 2 presents the literature and data review (Task 1) on the integration of intermittent

generation and the existing scenarios;

Chapter 3 contains the methodology and approach for estimating the costs of intermittent

generation integration (Task 2) and estimating the balance of stable supply (Task 3);

Chapter 4 comprises the results and assessment of the quantitative and qualitative outputs of

Task 2 and Task 3, including a comparison between and conclusions following the different

scenario results.


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2 Background and Literature Review

In this chapter, electricity generation from intermittent sources (and its integration into the energy

infrastructure) is described and a synthesis of the relevant data and literature, including literature on

existing scenarios on intermittent generation integration, is provided. The first section presents thegeneral approach for conducting this literature and data review (Task 1). The second section

describes the background of the integration of intermittent generation, and the third section

elaborates on existing scenarios on this matter.

2.1 General Approach

The purpose of this study is to assess the required share for a stable EU electricity supply until

2050 (and the mid-term 2030). This means that the proper context needs to be analysed in relation

to the EU Energy Roadmap 2050. Therefore, it is important to first review what information and data

on intermittent generation is available/published, and which scenarios have been prepared to

assess intermittent generation and its integration into the energy infrastructure. Thus, the starting

point for the study (Task 1) is to undertake an inventory of (publicly) available information on

possible scenarios of an EU power system until 2050.

Figure 1 illustrates which components/activities have been carried out, and their accompanying

outputs.

Figure 1 - Description of Task 1

The following sections provide a synthesis of the literature (and other information sources) related

to intermittent generation, in particular in relation to infrastructure integration. It also details the

different (existing) scenarios - where intermittent generation is included - relevant for the derived

adaptation cost model in Task 2.

2.2 Europes Energy Infrastructure

The Energy Policy for Europe, agreed by the European Council in March 2007, establishes energy

security, sustainability and competitiveness as its key energy policy objectives. These key

objectives include the completion of the internal EU energy market, and that renewable energy

sources (RES) should contribute (at least) 20% to our final energy consumption by 2020.7

In that

7

European Union (2011), Energy Infrastructure Priorities for 2020 and beyond, a blueprint for an integrated EuropeanEnergy Network, European Commission Directorate-General Energy, Brussels


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respect, adequate, reliable and integrated energy networks are a prerequisite to achieve the EUs

energy policy goals, as well as for the EUs economic strategy. Developing an integrated energy

infrastructure policy will contribute to a properly functioning internal market, enhance energy

security and enable the integration of intermittent generation. Therefore, a new EU energy

infrastructure policy is needed to coordinate and optimise development and investment in the

energy network within Europe. This is needed to avoid increasing costs, resulting from the existing

out-dated and poorly interconnected energy infrastructure.8

As a response, DG Energy has defined some priorities for the mid- and long-term to prepare the

energy infrastructure for the 21st

century, as part of moves to a new European energy infrastructure

policy. The ten-year network development plan (TYNDP) forms the basis to set these priorities to

secure the EU electricity supply. However, it does not take into account investments in new

offshore generation capacities in the North Sea area and does not take into account ensured timely

implementation of cross-border interconnections.

Therefore, the following priority corridors have been proposed to make Europes electricity grids fit

for 2020:9

- Offshore grid in the North Sea area and connection to Northern and Central Europe tointegrate and connect electricity generation facilities in the North Sea;

- Interconnections in South Western Europe to accommodate renewable electricity

generation, in particular between France and the Iberian Peninsula;

- Connections in Central Eastern and South Eastern Europe to strengthen regional

networks in North-South and East-West power flow directions;

- Completion of the BEMIP (Baltic Energy Market Interconnection Plan) to integrate the

Baltic States into the European market through reinforcement of internal networks and

strengthened interconnections with neighbouring countries.

Besides the priority corridors for the EUs electricity grids, the European energy infrastructure

strategy 2020 also sets out other priorities. Another priority is to roll-out smart grid technologies by

providing the necessary framework, including initial incentives for rapid investments in new

intelligent energy networks. Such a framework is important for a well-functioning market for energy

services that stimulates energy savings and efficiency in a competitive retail market, and is also

important for the promotion of the integration of intermittent generation to the energy grid system.

Interconnected smart grids (or super grids) can transmit large amounts of (intermittent) renewable

energy sources and allow for the decommissioning of older electricity generation sources.10

Therefore, DG Energy will assess the need to implement additional legislation to keep smart grid

implementation on track and will set up a platform for dissemination of the most up-to-date

experiences and good practices concerning their deployment across Europe.

Besides the necessity to invest in and develop further the energy network for a stable European

energy supply, an expanded European grid can help to cope with intermittency challenges as

these are becoming increasingly significant on a national scale. On a local scale, storage capacity

solutions are typically considered, as these can compensate for intermittency of electricity and

8 European Union (2011), Energy Infrastructure Priorities for 2020 and beyond, a blueprint for an integrated European

Energy Network, European Commission Directorate-General Energy, Brussels9 European Union (2011), Energy Infrastructure Priorities for 2020 and beyond, a blueprint for an integrated European

Energy Network, European Commission Directorate-General Energy, Brussels10

EREC (2009), [R]enewables 24/7 Infrastructure needed to save the climate, European Renewable Energy Council andGreenpeace, November 2009, Brussels


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reduce the need for renewable electricity curtailment.11

The most cost-effective solution is to

expand an inter-regional grid system across Europe which is part of the Commissions Blueprint

for an Integrated European Energy Network.

In order to successfully operate a European electricity transmission grid, developments in the

following areas would be needed12

:

1. Planning and development of a European grid to ensure that investments in capacity to

transmit generated electricity are made correctly and where they are needed;

2. Physical and market aspects of the (successful) operation of a European grid for maximising

the (economic) benefits which can be achieved by the infrastructure;

3. Development of transmission technologies such that effective options for environmental,

energy efficiency and investment considerations are available.

The network developments listed above (or, in other words, investments in high voltage assets)

have induced impacts on the Transmission System Operators (TSOs), particularly through changes

to the legal and regulatory framework.13

TSOs should support the (new) EU energy infrastructure

policy by means of increasing market integration and the connection of higher shares of intermittent

generation, while maintaining a desired level of power system security. Furthermore, the TSOs willhave to deal with an increasing number of uncertainties and a (more) complex global legal and

regulatory framework (e.g. permitting procedures). Importantly, TSOs also still have to secure the

financial means to finance and build the network developments on schedule.

Achieving a stable and secure demand-supply balance will be a challenging task for TSOs. This

has become more and more important due to the increased role of variable electricity sources, like

intermittent generation.14

Electricity from renewable energy sources is expected to play a bigger

role in achieving the demand-supply balance given the potential large scale introduction of, for

example, direct electrical heating in low-carbon/energy houses, heat pumps and electric cars that

will ask for controllable load and storage capacities. In that respect, this is an important challenge

to secure a stable demand-supply balance. Moreover, the (proper) integration of intermittent

generation will play a key role in safeguarding a stable electricity supply within Europe over a longer

term.

2.3 Integration of Intermittent Electricity Generation

Europe is facing several major energy challenges, including the depletion of indigenous energy

sources, increasing fuel costs and the threat of energy supply disruptions. At the same time, it also

recognises the need to reduce GHG emissions and, consequently, the consumption of fossil fuel

generated electricity. In this respect electricity generated from nuclear (can) play(s) a key role.

15

Over the next 10-15 years, 332 GW of new electricity capacity 42% of the current capacity in the

EU needs to be built to replace ageing power plants, to satisfy increasing energy consumption

11 ECF (2010), Roadmap 2050 Practical guide to a prosperous, low-carbon Europe Technical Analysis, European

Climate Foundation, Volume 1 2010, Brussels12

EASAC (2009), Transforming Europes Electricity supply An Infrastructure Strategy for a reliable, renewable and secure

power system , European Academies Science Advisory Council, EASAC Policy Report 11, Cardiff13 ENTSOE (2010), Ten-Year Network Development Plan 2010-2020, European Network of Transmission System

Operators for Electricity, June 2010, Brussels14 EASAC (2009), Transforming Europes Electricity supply An Infrastructure Strategy for a reliable, renewable and secure

power system , European Academies Science Advisory Council, EASAC Policy Report 11, Cardiff15

NEI (2007), Nuclear Energy: A Key tool in reducing Greenhouse Gas Emissions, Nuclear Energy Institute, Policy Brief,Washington


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and to achieve the energy targets for 2020.16

Directive 2009/28/EC on renewable energy

implementation aims to increase the share of electricity generated from renewables in the EU-27

from 8.6% in 2005 to 20% by 2020. In 2007, the share of renewable energy sources increased to

9.9%. However, at that pace (0.65% per year), only a share of 18.35% would be reached by 2020.

Hence, in order to be able to fully deploy renewable energy sources, some (non-cost) barriers need

to be removed, like administrative hurdles and barriers to grid connection.17

In particular, there is a

clear need to support the integration of energy from intermittent generation into the transmission

and distribution grid, this can involve greater use of energy storage systems.18

Moreover, in the

intermediate term to 2030 (but more important for the longer term to 2050), significant increases of

supply can be achieved by electricity generated from intermittent sources.19

Electricity generated

from intermittent sources has high potential in the European energy mix (in excess of 30%) when

new grid infrastructure technologies and operational approaches are in place.20,21

Successfully

doing this is dependent on the Commissions priorities for an integrated EU energy infrastructure

being properly implemented and adopted,

To meet the targets of Directive 2009/28/EC regarding the intermittent generation shares in the

energy mix, additional network capacity is needed in particular for electricity generated via

onshore wind. Of all the renewable electricity generating technologies onshore wind is the largestcontributor to total installed capacity. As such, the role of onshore wind will be crucial for achieving

the 34% share of RES needed by 202022

. In 2010, natural gas was the largest contributor of new

generation capacity (51% or 28 GW), followed by PV (22% or 12.3 GW) and wind (16.7%, or 9.3

GW).23

Along with the increase in onshore wind power generation (and RES in general), comes an

increasing need to improve the energy infrastructure to ensure an efficient accommodation of this

new intermittent generation24

Electricity generated by weather-dependent intermittent sources (e.g.

wind, solar) cannot be stored at a large scale in an economically viable way and has to be

produced in real time to follow consumption. Beyond a certain share of installed capacity,

intermittent generation technologies, like solar and, especially, wind, pose a significant challenge

for real time power system balancing, where, in addition to demand side variation, there is also

supply side variation.25

There are various ways to balance demand and supply in the case of a mix with high shares of

intermittent generation. These include additional backup generation capacity, additional

transmission capacity and smart grids (as discussed above). Therefore, changes in network

16EWEA (2009), Pure Power Wind energy targets for 2020 and 2030, European Wind Energy Associations, November

2009, Brussels17

Ecorys et al (2008), Assessment of non-cost barriers to renewable energy growth in EU Member States AEON,Commissioned by European Commission Directorate-General+ Transport and Energy, May 2010, Rotterdam

18 European Union (2009), Directive 2009/28/EC on the promotion of the use of energy from renewable sources and

amending and subsequently repealing Directives 2001/77/EC and 2003/30/EC, European Commission Directorate-

General Trans and Energy, Brussels19

IEA (2011), Harnessing Variable Renewables A Guide to the Balancing Challenge, Hugo Chandles, August 2011, Paris20

DLR (2008), Renewable energy deployment potentials in large economies, REN21 Renewable Energy Policy Network

for the 21st Century, April 2008, Stuttgart21

Ecofys (2008), Global potential of renewable energy sources: a literature assessment Background report, REN21

Renewable Energy Policy Network for the 21st Century, March 2008, Utrecht22

EWEA (2009), Pure Power Wind energy targets for 2020 and 2030, European Wind Energy Associations, November

2009, Brussels23 http://www.icis.com/heren/articles/2011/01/31/9430970/eus-renewable-growth-falls-short-in-2010.html24 EWIS (2010), Towards a successful integration of large scale wind power into European Electricity grids, European Wind

Integration Study, March 2010, Brussels25

ENTSOE (2011), Scenario Outlook and System Adequacy Forecast 2011-2025, European Network of TransmissionSystem Operators for Electricity, February 2011, Brussels


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infrastructure and operation, including clear and transparent energy policy guidelines, are critical

since this will create the option to deliver the decarbonisation of the energy supply securely and

affordably through a range of generation mixes, including those involving high levels of intermittent

generation. For example, It is estimated in the Energy Roadmap 2050, that an extension of up to

170 GW new transmission capacities will be needed for this purpose, in which the role of smart

grids (or super grids) will become increasingly important to cushion local intermittency so that

(some part of) demand and supply can be balanced in a decentralised manner.

2.4 Existing Scenarios on Intermittent Electricity Generation Integration

An inventory has been undertaken of (publicly) available information on possible scenarios for the

development of EU power system and infrastructure to 2050 in order to conduct the quantitative

assessment of the costs of intermittent generation integration and stable supply.

The most relevant, and comparable, existing scenarios for the intermediate (2030) and long (2050)

term on different shares of intermittent generation in the EU energy mix and integration are:

- Pathways from the Energy Roadmap 2050 study of the European Climate Foundation (fourscenarios);

26

- Scenarios from the on-going IRENE-40 project in Europe (five scenarios);27

- Scenarios from the Power Choices study of Eurelectric (two scenarios)28

.

These existing scenarios are interesting and relevant as they rely on some common grounds in

terms of data and information sources, which are:

a. The PRIMES baseline (2009) scenario for installed capacity and demand;

b. The (obviously for the latter one) scenarios of Eurelectrics Power Choices study;

c. The (draft) ten-year development plan (TYNDP) of ENTSO-E, on which the 2050

extrapolations of energy infrastructure developments are based.

Each of these above mentioned scenarios will be discussed briefly in the following sections:

2.4.1 Eurelectric Power Choices study

Eurelectric has developed its own electricity scenarios for development of the European power

sector using the PRIMES model. The Power Choices study presents two scenarios for the

electricity sector in the EU to 2050:

1. A baseline projection orBaseline 2009 scenario, and;

2. The more ambitious (in terms of emission reductions) Power Choices scenario.

The Baseline 2009 scenario shows the projected electricity trends assuming that all existingrelevant EU policies affecting European electricity demand and supply are implemented in the

Member States. The Power Choices scenario explores the technical developments and policy

changes necessary to reduce greenhouse gas (GHG) emissions by 75% by 2050. The Eurelectric

Baseline 2009 scenario provides an intermediate projection of the development of the European

electricity sector to 2050, reflecting existing trends and policies. The European Emissions Trading

Scheme (EU ETS) determines the carbon emission reduction to 2020, after which the trend

26 ECF (2010), Roadmap 2050 Practical guide to a prosperous, low-carbon Europe Technical Analysis, European

Climate Foundation, Volume 1 2010, Brussels27 IRENE-40 (2011), Internal Report Task 2.3: Scenario Synthesis, FP7 research programme, Energy research Centre of

the Netherlands (ECN), commissioned by the European Commission DG Energy, Brussels28

Eurelectric (2009), Power Choices Pathways to Carbon-Neutral Electricity in Europe by 2050, Full Report, Union of theElectricity Industry, November 2009, Brussels


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continues linearly (-1.74% per year). Nuclear energy policies remain unchanged in the Baseline

2009, so the expected phase-outs in Germany and Belgium take place as planned. Consequently,

the carbon intensity of the electricity sector declines by 40% to 2050 through energy efficiency

measures and deployment of renewable energy sources. Electricity use for road transport remains

limited. The scenario indicates that electricity generation from intermittent generation grows

strongly. For instance, wind power generation increases from 161 TWh in 2010 to 967 TWh in 2050

to account for almost half of all renewable electricity generation by 2050.29

2.4.2 European Climate Foundation Energy Roadmap 2050 study

The on-going ECF study Energy Roadmap 2050 introduces and compares four pathways to reach

a reduction of at least 80% greenhouse gas (GHG) emissions with respect to 1990 levels by 2050.

Hence, the ECF study is somewhat more ambitious than the Eurelectric study. This target

translates into a reduction of at least 95% of GHG emissions in the power sector by 2050. The ECF

study is based on a baseline, where the 80% GHG reduction target is not met and three alternative

options/outcomes with different shares of RES generation. This leads to the following results:

- Baseline: 34% RES, 49% Coal/Gas, 17% nuclear;

- 40% RES, 30% CCS, 30% nuclear;

- 60% RES, 20% CCS, 20% nuclear;- 80% RES, 10% CCS, 10% nuclear.

The 100% RES pathway is also mentioned, but this pathway is not analysed in the same level of

detail as the 4080% RES pathways.

There is a notably large role of solar PV, which varies from 195 GW (40% RES) to 815 GW (80%

RES) by 2050. The ECF study estimates for these 80% GHG reduction scenarios the needs in

terms of transmission capacity (50165 GW), back-up capacity (70255 GW), demand response

(020%), and RES curtailment (13%). The ECF scenarios provide an estimate of grid expansion

needs, namely 50165 GW until 2050 at a cost of 50200 billion over 40 years (35% of cost to

the power sector) to reach the 80% GHG reduction target.

2.4.3 IRENE-40 FP7 study

Another set of scenarios have been formulated within the on-going IRENE-40 project30

of which an

in-depth preliminary quantitative database has been made available to this project, namely hourly

residual demand curves (demand minus intermittent generation) for the EU27 plus Norway and

Switzerland. This data gives a good overview of demand and supply under different scenarios, but

does not formulate the needed network solutions for which additional model analysis would be

required. For instance, under high growth scenarios a new super-grid may have to be added to the

existing grid to optimally balance demand and supply.

These scenarios are close to the ECF (Energy Roadmap 2050) pathways and also close to the

Eurelectric scenarios. Five scenarios are formulated in the IRENE-40 project, namely a business-

as-usual (BAU) scenario, where the 80% (95% for the power sector) GHG reduction will not be

achieved and four alternatives to achieving the 80% GHG reduction by 2050. These scenarios differ

in the demand growth and the technology mix.

29 Ecorys et al (2010), Investment Needs for future adaptation measures in EU nuclear power plants and other Electricity

generation technologies due to effects of climate change, Commissioned by: European Commission DG Energy,

December 2010, Rotterdam30 See http://www.irene-40.eu/


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The following scenarios have been considered and employed in this study from the IRENE-40

project:

- BAU has 30% demand growth with respect to 2010

- Energy Efficiency (EE) has 10% demand growth with respect to 2010, due to high effort on

energy efficiency

- Three high demand growth scenarios namely with 50% demand growth with respect to

2010:

RES where a high level of RES will be realised within Europe by 2050

DESERTEC where a high level of RES will be imported from North Africa by 2050

CCS in combination with a high level of fossil fuels will be realised by 2050

2.4.4 Comparison between Different Sets of Scenarios

Table 1 presents an overview, for each of the three information sources (ECF, Eurelectric and

IRENE-40), of the scenarios selected to be taken for the assessments of costs of intermittent

generation integration and the accompanied balance of stable supply.

Table 1 - Equivalence between three sets of scenarios

IRENE-40 ECF EurelectricBAU Baseline Baseline 2009

CCS 40% RES Power Choices

Energy Efficiency 60% RES

RES; DESERTEC 80% RES

The comparison in Table 1 shows that the IRENE-40 BAU scenario is quite close to Eurelectrics

Baseline 2009 but also to the ECF Baseline in terms of demand growth. These three scenarios all

envision that the current (policy) trends continue, and a substantial reduction in greenhouse gas

emissions will not be achieved. The IRENE-40 CCS scenario is close to the Eurelectric Power

Choices scenario and the ECF 40% RES scenario, in terms of the RES share. The energy

efficiency (EE) scenario is a new scenario, with a substantially lower demand for electricity as

compared to all ECF pathways and Eurelectric scenarios. Nevertheless, this scenario is close to the

ECF 60% RES scenario in terms of RES share. Finally, IRENE-40 RES and DESERTEC are the

closest to the ECF 80% RES scenario in terms of RES share.

Figure 2 compares the scenarios in terms of demand growth, showing that the scenarios are all

quite close to each other.


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Figure 2 - Energy demand projections under different scenarios

3000

3200

3400

3600

3800

4000

4200

4400

4600

4800

5000

2010 2020 2030 2040 2050

EurelectricBaseline2009

EurelectricPowerChoices

IRENE40BAU

IRENE40Efficiency

IRENE40other

ECFBaseline

ECFother

TWh

Drivers of these scenarios are the transition from national to regional planning. For example, new

German coal power plants to be located in the Netherlands. Also the consequences of the phase

out of nuclear energy in Germany will be a driver. Furthermore, more power plants are expected to

be constructed along the coast for easier access to cooling water, increasing the grid investment

costs.

The high RES scenarios will be especially challenging as they need more balancing effort,

infrastructure and more reserve capacity. New (coal) power plant technologies are under

development that can be ramped up and down more economically. This could partially assist in

meeting the balancing need. However, these new coal technologies are not further considered in

this study, due to the uncertainty of their development.


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3 Quantification of Integration of ElectricityGenerated by Intermittent Sources

In this chapter we elaborate on the methodology to quantify intermittent generation integration. In

particular, details of the methodologies developed for the quantification of the costs of intermittent

generation integration and the quantification of stable supply are provided. The first section

presents the general approach for conducting these quantifications (Task 2 and Task 3). The

second section describes how the selection process of the scenarios (from Task 1) is taken into

account. Section 3 describes the methodology for the construction of the adaptation cost model that

is used for estimating the costs of intermittent generation integration given different share(s) of

integration in the energy infrastructure. The final section deals with the issue of stable supply.

3.1 General Approach

The purpose of this study is to assess the share of stable EU electricity supply required until 2050

(and the mid-term 2030), given increasing shares of intermittent generation to be integrated into the

grid. After the extensive literature review, data gathering and scenario inventory, the next phase

analyses the relationship between network adaptation costs and increasing shares of intermittent

generation, and the relationship between stable supply and increasing shares of intermittent

generation. This provides an estimate of the costs to construct a merit order of adaptation

measures to accommodate intermittent generation (Task 2) and to estimate stable supply (Task 3).

Figure 3 illustrates which components/activities were carried out, and what the accompanying

outputs are.

Figure 3 - Description of Task 2 and Task 3

The following sections elaborate on the process for selecting the relevant scenarios taken into

account in the adaptation cost model, presents how this adaptation cost model has been

constructed and discusses how stable supply has been quantified.


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3.2 Selected Scenarios on Intermittent Generation Integration

The scenarios, as presented in section 2.4, vary considerably in the terms of the availability of

useful quantitative information. For the three data sources (Eurelectric, ECF, IRENE-40) the level of

quantitative detail for IRENE-40 is far greater than the level of detail of the Eurelectric and ECF

scenarios. In particular, hourly load data and hourly intermittent generation data is available from

IRENE-40. This makes this the most appropriate set of scenarios to use in this study. Moreover, we

also established many commonalities among these scenarios as shown previously in Table 1.

Including how the IRENE-40 scenarios relate to the more mainstream scenarios, which is important

to build confidence in the reliability of the results of this study. Therefore, the database of the

ongoing IRENE-40 project will form the basis in the adaptation cost model.

Since the main objective of this study is to analyze the impact of increasing shares of intermittent

generation, the IRENE-40 RES scenario emerges as the most interesting case. Since the IRENE-

40 RES scenario presents a future with the largest shares of intermittent electricity generation

(75%) among all IRENE-40 scenarios, the IRENE-40 RES scenario can show the impact of the

largest imaginable shares of intermittent generation, which is important for this study. Therefore, the

data of the RES scenario of IRENE-40 has been studied in detail and is later compared to theresults of the other scenarios to validate them. In this way it was possible to quantify the required

amount of stable supply and adaptation cost under increasing shares of intermittent generation.

As a sensitivity analysis, some of the graphs were also produced for other scenarios - these are

presented in the Annexes to this report. Considering the data limitations all Eurelectric and IRENE-

40 scenarios (in addition to the RES scenario) are applied to the correlation between the share of

flexible supply and the share of intermittent generation. Furthermore, all IRENE-40 scenarios (in

addition to the RES scenario) are applied to correlation between the balancing need and the share

of intermittent generation. In the latter case, Eurelectric scenarios could not be used due to the lack

of residual hourly demand data.

In addition, the EU-27 has been disaggregated into nine European regions, following the ECF 2050

Energy Roadmap. On the one hand, it is not logical to speak about country-level power system

characteristics in 2050 (and 2030), because of the ongoing process of cross border market

integration. Equally, it is not useful to show EU-27 wide aggregates, as this would hide regional

differences. To strike a compromise between these two extremes, data is presented for the nine

regions as presented in Figure 4.


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Figure 4 - Regional division of EU-27

NO

FRCE

SE

Nine Grid regions:

IB Iberia

FR France

UK UK + IE

DE BeNeLux + DE

NO Nordic

PL Baltic + PL

SE South East

IT IT + MT

CE Central

IBIT

DE

UK

PL

NO

FRCE

SE

Nine Grid regions:

IB Iberia

FR France

UK UK + IE

DE BeNeLux + DE

NO Nordic

PL Baltic + PL

SE South East

IT IT + MT

CE Central

IBIT

DE

UK

PL

Source: Follows the same regionalisation as used in the ECF 2050 Energy Roadmap.

3.3 Estimating Costs of Integration of Electricity Generated by Intermittent Sources

In order to quantify the costs of integrating electricity generated from intermittent sources an

Adaptation Cost Model (ACM) was developed to analyse the flexibility measures needed to

accommodate varying shares of intermittent generation to the EU power system in 2050.

The adaptation cost model is based on the following steps:

1. Derivation of the yearly peak and off-peak from the residual load duration curves (which is the

normal load duration curve minus intermittent generation (defined in this study as the total sum

of wind and solar PV)).

2. Derivation of the amount of flexible supply (defined in this study as the total sum of hydro, gas

and oil) and the amount of intermittent generation, over total installed capacity.

3. Division of EU-27 into nine regions for two years (2030 and 2050) to obtain reliable data for (v1)

intermittent generation, (v2) balancing need (defined in this study as the difference between

peak and off-peak over peak) and (v3) flexible supply.

4. Establishing the link between intermittent generation with balancing need (e1) and intermittent

generation with flexible supply (e2) through two regression equations.

5. Based on an amount for the yearly peak for EU-27 (700 GW), the yearly off-peak can be

calculated through a derived regression equation between balancing need and intermittent

generation (e1).


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6. The gross balancing need is defined as the difference between peak and off-peak electricity

demand (in GWs). The term balancing is used here to stress the importance of balancing

demand and generation.31

7. The amount ofstable supply follows from the derived regression equation between flexible

supply and intermittent generation (e2).

8. The net balancing need is defined as the gross balancing need minus stable supply. The value

is non-negative, where a negative value means that there is no net balancing need.

9. In order to meet the net balancing need, abatement options and costs are derived, enabling

calculation of a merit order curve for intermittent generation integration into the grid.

10. For comparison, the intermittent generation cost is also calculated, defined as the cost per

installed capacity (expressed in /kW/year), accounting for all capital and operational costs.

11. These steps when performed for increasing shares of intermittent generation lead to a curve for

balancing cost. Stable supply, net balancing need, intermittent generation cost and balancing

cost can all be presented in one graph to complete the adaptation cost model.

This adaptation cost model has been used to construct a merit order curve of flexibility measures

and an analysis has been undertaken in the next chapters to draw key lessons and valuable inputs

for the Energy Roadmap 2050.

3.4 Estimating Stable Supply versus Intermittent Generation Integration

This study also presents the link between flexible supply i.e. power produced by energy sources

which are sufficiently flexible to follow (sudden) changes in residual demand (vertical axis) and

the share of intermittent generation (horizontal axis). This data has been derived for the scenarios

as suggested in section 3.2 on residualdemand development and the shares of intermittent

generation.

In order to quantify stable supply and share of intermittent generation, data on installed capacity,

hourly demand curves, hourly intermittent generation and the resulting residual demand curve for

the RES scenario in IRENE-40, have been employed. This was the scenario for which we had the

most detailed data and which has the highest shares of intermittent generation, for that reason it

was the most interesting IRENE-40 scenario to study the possible impact of high shares of

intermittent generation.

One single indicator for share of intermittent generation will be used throughout the analysis:

Intermittent generation share: This is a metric that shows the share of intermittent generation

(Solar PV, Wind on- and offshore)32

of total installed capacity. These technologies are assumed

to be completely inflexible, i.e. that their generation fully follows weather patterns (solar intensityand wind speeds) and does not follow changes in demand. Addition of intermittent generation

will typically make system balancing more challenging.

Two possible ways of measuring stable supply have been derived from the available data. These

reflect two different and complementary aspects of stable supply, namely:

31 An alternative formulation would be load-following needs. The actual balancing market has a much more limited scope

and is assumed by market volume which is much smaller than the load following needs.32 Other RES technologies are excluded as they can be tuned to have at least a constant level of output to function as a

baseload generation. For instance, Solar CSP can still generate power after sunset and can therefore time its output, this

is not considered in this study as intermittent generation. Moreover, biomass is considered by ECF as lowly flexible, as it isa dedicated generation technology, only providing baseload.


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Flexible supply: This is a metric that shows the share of flexible supply (hydro, gas and oil) of

the total installed capacity (expressed as a percentage of total installed capacity). These

technologies are assumed to be sufficiently flexible in ramping up and down to meet sudden

fluctuations in demand due to intermittent generation. The ECF Energy Roadmap 2050 even

goes as far as to derive a flexibility merit order, where hydro is considered most flexible followed

by gas.33

In addition, coal and nuclear can also be demand following, albeit at a much slower

rate, and this is generally only performed in a planned manner to follow slowly changing

seasonal demand changes or expected within a day demand changes. However, these

technologies are assumed to not be capable of responding to sudden and unexpected changes

in the power system due to intermittent generation and are therefore excluded from flexible

supply.

Balancing need: This is a metric that shows the difference between peak and off-peak on the

residual demand curve (demand minus intermittent generation) and is weighed by peak demand

(this leads to a non-negative ratio varying between 0.5 and 2.2). The higher the ratio, the more

challenging it will be to balance intermittent generation locally (in a national market), because of

the fluctuations in demand. A value below one denotes a positive off-peak, whereas a value

above one denotes a negative off-peak. The latter is possible in the residual demand curve,

under high levels of intermittent generation.

33Note that hydro is considered by ECF the most ideal source for balancing supply, as it can react most quickly to sudden

changes in the power system due to intermittent generation. Hence the time scale use here is real time power systemadaptability.


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27/45


4 Results and Assessment

This chapter presents the results based on the methodology as set out in Chapter 3 cf. the

quantification of intermittent generation integration. It consists of the following four steps:

1. The need for stable supply is outlined by the (residual) load duration curve and hourly (residual)loads for EU-27;

2. The costs for intermittent generation and abatement for the additional balancing need are

estimated;

3. Two indicators for stable supply are presented: flexible supply and balancing need;

4. These are combined into a model to derive the required stable supply, net balancing need and

the merit order curve representing the balancing cost. This is presented in a simple graph.

4.1 Assessment of the Balancing Need due to higher shares of Intermittent

Generation

In order to outline the challenge for integrating increasing shares of intermittent generation, two

graphs are presented, Figure 5 and Figure 6. The figures contain the classical load duration curve

and the residual load duration curve (based on hourly loads minus intermittent generation as

defined in section 3.4).

Figure 5 and Figure 6 show both the load duration curve and the residual load duration curve for

EU27 in 2030 and 2050, comparing original demand and residual demand (both based on the RES

scenario (IRENE-40, 2011)). Hence, the positive impact of transmission capacity (or grids) is

already factored in. The figures show that an increase in intermittent generation reduces the share

in base-load generation. This is a relatively small decrease in 2030, but base-load nearly vanishesby 2050. Intermittent generation, following weather patterns, often peaks during low demand hours,

which further increases the need for power system adaptation. Off-peak demand can be cushioned

by demand response, storage inflow and RES curtailment, whereas peak demand can be

cushioned by demand response, storage outflow and back-up units. The remaining variation in

demand needs to be met by ramping up and down of conventional and sufficiently flexible power

plants.


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Figure 5 - The challenge for balancing due to higher shares of intermittent generation in 2030: (residual load

duration curve)

0

100000

200000

300000

400000

500000

600000

700000

1 1001 2001 3001 4001 5001 6001 7001 8001

Originalloaddurationcurve

Residualloaddurationcurve

Baseload

generation

(MW)

Demandresponse

Tostorage

REScurtailment

Demandresponse

Fromstorage

Backupunits

Rampup/downof

powerplants

Intermittentgeneration

2030

(h)

Source: IRENE-40 RES scenario and Ecorys calculations.

Figure 6 - The challenge for balancing due to higher shares of intermittent generation in 2050: (residual load

duration curve)

400000

200000

0

200000

400000

600000

800000

1000000

1 1001 2001 3001 4001 5001 6001 7001 8001

Originalloaddurationcurve

Residualloaddurationcurve

Baseloadgeneration

Demandresponse

Tostorage

REScurtailment

Demandresponse

Fromstorage

Backupunits

Rampup/downof

powerplants

Intermittentgeneration

2050

(h)

(MW)


To further illustrate the impact of intermittent generation, Figure 7 shows hourly load variation overthe year for both normal and residual load (again based on the RES scenario (IRENE-40, 2011)).

This shows the challenge of classical base-load technologies even better, where except for the

winter, all through the year more generation than demand can occur.


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Figure 7 - The challenge for balancing due to higher shares of intermittent generation in 2050: hourly load

variation

400000

200000

0

200000

400000

600000

800000

1000000

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Originalload curve

Residualload curve

2050

(month)

(MW)


Hence, ramping up/down of power plants could be considered as an important adaptation measure

to deal with intermittent generation. This is the standard method of system balancing, where supply

is scaled in such a way to follow the fluctuations in demand. The current state of technology is

designed to follow the classical demand curve and will be of little help to accommodate

more intermittent generation, as shown in Figure 7. For instance, it is not economical for coal

fired power plants to be shut down on a daily basis, as it also reduces their lifetime. Minimum stable

generation levels of power plants have to be respected. Also the ramp up/down times have to be

taken into consideration, which may not respond quickly enough to maintain the required system

quality. Section 4.4 quantifies these consequences in terms of adaptation or balancing needs and

provides a best estimate of balancing costs for increasing shares of intermittent generation.

4.2 Adaptation to Higher Shares of Intermittent Generation and Cost Estimates

In order to estimate the costs of system adaptation to increasing intermittent generation shares, six

adaptation measures are identified (in expected order of increasing cost):34

1 Demand response: by shaving extreme peaks and off-peaks from the residual demand

through demand response, possibly through agreements with large consumers like big

industries, some intermittent generation can be accommodated. Applications of smart

grids can also help to establish and optimise this. The consumer will consume less underpeak demand and more under off-peak demand.

2 Interconnection capacity: An aggregated peak and off-peak is generally less extreme

than the isolated peak and off-peak at country level (for instance the EU27 has a peak/off-

peak ratio of 2.2, whereas at a country level this ratio can be as high as 4.4 in Slovenia).

This adaptation measure is both helpful for reducing the peak and increasing the off-peak

to reduce the gap between these two.

3 Storage capacity: This is the most flexible way to store at peak supply to meet peak

demand, both on a daily or seasonal basis. However, costs are generally high, losses are

34

The recent study of IEA (2011) shows estimates of costs of intermittent RES integration to vary between 27 $/MWh forshares of up to 30%. Our study aims at estimating the cost of higher shares of intermittent generation integration.


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typically around 30% and pumped-storage can only be developed at a limited number of

suitable locations. This adaptation measure helps reduce the peak and increase the off-

peak to close the gap between them.

4 Back-up capacity: This is the classical way of balancing the power system on a country

level, by prescribing a minimum required reserve margin. However, this adaptation

measure only helps to increase the production need under peak demand, as the reserve

can only be ramped up during a sudden peak, when the demand drops suddenly, other

measures will need to be taken.

5 Intermittent RES curtailment: If options 14 fail, it may be necessary to reduce the

output of intermittent generation leading to RES curtailment to balance the power system.

This adaptation measure is the counter measure to back-up capacity, namely to reduce

the supply output in order to balance the power system.35

6 Outage: The final solution is a temporary outage, often caused by an unpredictable

situation in the power system. Although it is not economical to aim at complete avoidance

of outages, as a quality prerequisite, it is important to keep outages below a certain level,

Table 2 presents the assumptions used to derive an estimate of the adaptation costs for each of the

measures. In addition, an estimate is given of the intermittent generation share that can beaccommodated by each of the adaptation measures. The source and motivation of the cost

estimate is given in the column entitled motivation.

Table 2 - Assumptions for the capital costs for adaptation to intermittent RES shares

Costs,

/kW

Abatable

share

Source and motivation

1 Demand response 450 20% Half of transmission capacity

2 Interconnection capacity 900 20% Based on ECF: 900 Euro/kW

3 Storage capacity 1,700 25% Assuming hydro as storage unit

4 Back-up capacity 650 27% Assuming gas OCGT as back-up unit, without

CCS

5 Intermittent RES curtailment 3,500 5% About two times intermittent RES cost

6 Outage/load shedding 10,000 3% Large value, VoLL

Source: Based on ECF (2010d, 2010f), Mott MacDonald (2010) and Ecorys calculations.

The next step is to estimate the costs of adaptation measures based on levelised costs, where, in

addition to capital costs, other (marginal) costs are also considered by taking the utilisation rate into

account. This levelised cost approach is commonly applied to compare the costs of various

generation technologies. Costs are built up from fuel costs, variable and fixed OPEX, CAPEX, CO2

costs and CCS (transport and storage) costs. Whereas back-up and storage capacity can be

expressed in terms of generation technologies, it is also necessary to express the other adaptationmeasures in the same cost units. One source for these cost estimates is the ECF Energy Roadmap

2050 study, but the UK electricity generation cost update (Mott MacDonald, 2010) also provides

useful information. In order to derive the fuel costs, projections are needed for oil price and CO2

costs for 2030 and 2050. These are provided in Table 3:

35 The capital costs of RES curtailment and outages are not easy to determine. For RES curtailment hardly any addtitionele

investments are needed. RES curtailment could be considered a cost effective way to reduce the integration cost of

intermittent generation. However, this would lead to political resistance due to high level of subsidies and priority access tothe network which is being provided.


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Table 3 - Fuel and CO2 price projections

oil Gas Coal CO2 $/

2010$ $/barrel /m3

$/tonne $/tonne -

2030 87 37.5 91 54 1.30

2050 115 52.9 109 110 1.20


Taking these together additional assumptions can be made, as presented in Table 4.

Table 4 - Assumptions for other adaptation cost items to intermittent generation shares

Lifetime

Years

OPEX

fixed

/kW

OPEX

variable

/MWh

Efficiency Capacity

Factor

1 Demand response 50 10 1.00 35%

2 Interconnection capacity 50 10 1.00 35%

3 Storage capacity 50 7.5 1.00 35%

4 Back-up capacity 30 15 0.00 45% 20%

5 Intermittent RES curtailment 50 1.00 10%

6 Outage/load shedding 50 1.00 10%Source: Based on ECF (2010d, 2010f), Mott MacDonald (2010) and Ecorys calculations.

From all the adaptation measures, only one measure will need to burn fuel, namely the back-up

capacity, which will also lead to CO2 emissions, which will be heavily taxed for the CO2 costs by

2050 as shown in Table 4. As a result, the back-up capacity becomes relatively expensive. Figure 8

shows the resulting costs expressed in /kW.

Figure 8 - Adaptation cost estimates to accommodate increasing shares of intermittent generation

0

10 0

20 0

30 0

40 0

50 0Carboncosts

Fuelcosts

VariableOPEX

FixedOPEX

CAPEX

/kW/year


In addition, an estimate is needed for the deployment potential of the adaptation measures to

accommodate increasing shares of intermittent generation. An optimisation of adaptation measures

could show that all six measures are needed. For instance, to demand that intermittent generationalways has priority access above other generation technologies, may not be the most economic


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solution. Allowing for some RES curtailment, could be a more economic solution to balance the

power system. Following ECF Energy Roadmap 2050, these shares can be roughly estimated as

20% demand response, 5% RES curtailment, 3% outages, 20% of interconnection capacity, 27% of

backup capacity and 25% of storage.

It is interesting to observe that the cost estimate for back-up capacity is very close to the estimate

for RES curtailment. This implies that additional back-up capacity and RES curtailment are nearly

equally cost-effective in abating the additional balancing need due to intermittent generation.

Following the above methodology, it is also possible to derive the levelised costs for intermittent

generation technologies. This is used in Section 4.4 to compare the adaptation costs to the

levelised costs of intermittent generation. Table 5 shows the assumptions used and the resulting

cost estimate is presented in the last column. Note that the data for the capacity factor is given for

completeness, but is not used in the cost estimate.

Table 5 - Assumptions to derive levelised costs of intermittent generation

CAPEX

/kW

Lifetime

Years

OPEX

fixed/kW

OPEX

variable/MWh

Capacity

Factor

Levelised

Cost/kW

1 Wind onshore 1,050 25 22.5 0 24% 138

2 Wind offshore 2,100 25 90 0 37% 321

3 Solar PV 1,000 25 22.5 0 11% 133Source: Based on ECF (2010d, 2010f), Mott MacDonald (2010) and Ecorys calculations.

4.3 Measures for Stable Supply versus Higher Shares of Intermittent Generation

The next step is the analysis of the link of the two complementary indicators of stable supply to

increasing intermittent generation shares. Data from the RES scenario of IRENE-40 have been

used to derive the scatter plots in Figure 9 and Figure 10. The data is presented for the nine grid

regions and the EU-27 as discussed in section 3.2.

Figure 9 - Link between the share of flexible supply versus the share of intermittent generation

IBEU

ITFRSE

UK

NO

DE

CE

PL

DE

IB

EU

UKSE

FR

PL

CE

NO

IT

0%

10%

20%

30%

40%

50%

60%

0% 10% 20% 30% 40% 50% 60% 70% 80%

Intermittentgenerationshare

Flexible

supply

share

RESshare2050

RESshare2030

Poly.(RESshare2050)

Poly.(RESshare2030)

intermittentgenerationshare=0.47(0.05) 0.36(0.11)Flexiblesupplyshare,R2=0.383

IRENE40 RESscenario

Note: Points in the graphs represent EU regions. Flexible supply share is the share of installed capacity of hydro + gas + oil

over total capacity.



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Figure 9 presents the relationship between the share of flexible generation units versus the share of

intermittent generation for 2030 (green line and dots) and 2050 (blue line and dots). In 2030, a

weak inverted U-shape curve emerges, whereas in 2050 it is close to a straight decreasing line.

Pooling of the data for 2030 and 2050, provides an overall decreasing line with a goodness of fit,

R2, of 0.38, and the estimated coefficient for the slope is statistically significant with 99%

confidence. This shows that at higher shares of intermittent generation, the share of flexible supply

decreases. Hence, Figure 9 shows that there is a good correlation between the share of flexible

generation and the intermittent generation share.

This result has to be interpreted as a negative relationship, because at higher shares of intermittent

generation there will be lower shares of flexible generation capacity units, making it more difficult to

balance the power system in real time. Additional adaptation measures, as suggested in section 4.1

will be needed in order to be able to balance the power system.

In Annex B, the correlation between flexible supply and intermittent generation as established in

Figure 9 is also derived for the data in other scenarios, namely Power Choices and Baseline 2009

scenarios of Eurelectric and the EFF, DES, CCS and BAU scenarios of IRENE-40. These results

are, however, statistically less significant and the variation in shares of intermittent generation ismuch less. This further demonstrates that the chosen RES scenario of IRENE-40 is the most

relevant one for this study.

Figure 10 - Link between the balancing need versus share of intermittent generation

PL

CE

DE

NO

UKSE

FR

IT

EU

IB

ITNO

CE

PL FRSE

UK

EU

IB DE

0.00

0.50

1.00

1.50

2.00

2.50

0% 10% 20% 30% 40% 50% 60% 70% 80%

Intermittent generationshare

Balancingn

eed

RESshare2050

RESshare2030

Poly.(RESshare2050)

Poly.(RESshare2030)

intermittentgenerationshare= 0.12(0.14)+3.09(0.32)Balancingneed,R2=0.842

assessment of the required share for a stable eu electricity supply until 2050 - 2011 - kirchsteiger

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