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1 Merit Order of Energy Storages by 2030 The Impact of Technological Megatrends on Future Electricity Prices Berlin, November 27, 2012

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1

Merit Order of Energy Storages by 2030

The Impact of Technological Megatrends on Future Electricity Prices

Berlin, November 27, 2012

2 2

Agenda

Project Structure

The Concept of the „Functional Energy Storage“

Technological Megatrends

Limitations in Price Fluctuations

3 3

Key Issues

Which system infrastructure is most favorable under

given framework conditions from a cost perspective for

the electricity supply system?

Which promotions have to be developed so that a

favorable system infrastructure can be established on

the market?

4

Project Structure

Electromobility

Pumped Storage CHP + Heat Storage +

Power2Heat

Flexibilization of

Load

+ -

Power2Gas

Further Technologies

Region Model

Expansion Scenarios

Welfare and Market-Analysis

Storage

Technologies

System Perspective

*

* SW Münster

* * EWE

**

5 5

Definition „Functional Energy Storage“

6 6

Functional Energy Storage exemplified by CHP

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Leis

tun

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Negative Residual-Load Residual-Load Renewable Energies CHP Flexibile CHP Renewable + CHP

Hour of the Year

P

ow

er/

Lo

ad

in

GW

7 7

Functional Energy Storage exemplified by CHP

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1344 1368 1392 1416 1440 1464 1488

Le

istu

ng

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Stunde im Jahr

Negative Residual-Load Residual-Load Renewable Energies CHP Flexibile CHP Renewable + CHP

Hour of the Year

P

ow

er/

Lo

ad

in

GW

8 8

Functional Energy Storage exemplified by CHP

0

10

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30

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1344 1368 1392 1416 1440 1464 1488

Le

istu

ng

/La

st

in G

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Stunde im Jahr

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1344 1368 1392 1416 1440 1464 1488

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Stunde im Jahr

Negative Residual-Load Residual-Load Renewable Energies CHP Flexibile CHP Renewable + CHP

-15

-10

-5

0

5

10

15

1344 1368 1392 1416 1440 1464 1488

Sto

rag

e P

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Hour of the Year

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1344 1368 1392 1416 1440 1464 1488

Po

wer/

Lo

ad

in

GW

hour of the year Hour of the Year

P

ow

er/

Lo

ad

in

GW

9 9

Technological Megatrends

Power to Heat (P2H)

Electromobility

Power to Gas (P2G)

Flexibilization of Load

10 10

Technological Megatrends – Power to Heat*

*In combination with CHP

11 11

Why Power2Heat?

Power2Heat Technologies: heating blade

electrode boiler

heat pump

Possible Applications:

Backup for heat production or CHP production

Avoiding cut offs in renewable energy production (CO2 -Emssions decrease)

Take advantage of low electricity prices at EEX

(generate profit from prices below 10 €/MWh*)

Provide negative secondary control reserve:

Average capacity fee: ~1.000 €/MW**

Invest.costs for electrode boiler: ~67.000 €/MW*

Amortisation: ~67 weeks (excluding heat revenues!)

*SW Flensburg press release on 08.03.2012; „Halle für Flensburgs "Stromheizung" termingerecht fertig - Stadtwerke

Flensburg feiern Richtfest“

** October 2012 – www.regelleistung.net

12 12

Target: 25% of German electricity production by CHP until 2020

Measure: CHP Act since 2002

previous development and outlook:

significant measures are required in order to reach the

ambitious target

CHP – Political Target

year

CH

P e

l. g

en

era

tio

n a

s s

ha

re o

f

tota

l n

et e

lectr

icity g

en

era

tio

n

13 13

CHP - Potential

14 14

Power2Heat - Potential

Average secondary control reserve demand in 2011: ~2.000 MW

e-boiler

capacity

max. thermal load

(district heating)

share

SW Flensburg 30 MW 320 MW 9%

↓ ↓ ↓ ↓

Germany 2.700 MW 30.000 MW 9%

collapse of negative control reserve market?

15 15

Technological Megatrends – Power to Gas

16 16

Source:

[1] Specht, Michael; Zuberbühler, Ulrich: Power-to-Gas (P2G®): Layout, operation and results of the 25 and 250 kWel research plants. Stuttgart: Zentrum für

Sonnenenergie- und Wasserstoff-Forschung (ZSW), 2012

Power-to-Gas – The Concept

[1]

Motivation:

With an increasing share of RES in the future long-term storage of energy in the order

of TWh might be necessary

transmission capacity of the gas grid > transmission capacity of the electricity grid

The Concept

17 17

Power-to-Gas – Efficiency

renewable energy

(wind and pv)

transformer

380 kV power supply line (500 km)

pumped-storage hydropower plant

power

transmission and

storage

100,0 %

95,0 %

90,3 %

72,2

%

Power Transmission and Storage

100,0 %

95,0 %

71,3 %

69,9

%

70,2 %

renewable energy

(wind and pv)

transformer and rectifier

electrolysis incl. add. components

compressor, storage, H2 transmission line

transport (500 km)

Power-to-Gas-H2

(power transmission

and storage)

Power-to-Gas H2

Source:

Müller-Syring, Gert; Henel, Marco: Power-to-Gas - Konzepte, Kosten, Potenziale. Leipzig: DBI GUT GmbH, 2011

100,0 %

95,0 %

71,3 %

56,1

%

renewable energy

(wind and pv)

transformer and rectifier

electrolysis incl. add. components

compressor, storage, H2 transmission line

transport (500 km)

Power-to-Gas-CH4

(power transmission and storage)

methanation

Power-to-Gas CH4

57,1 %

56,3 %

18 18

full load hours of electrolysis are obviously crucial for hydrogen production costs

how many full load hours for electrolysis operation might be reached in the

future?

Power-to-Gas – Hydrogen Production Costs

electricity costs 0 ct/kWhel

spec. capital cost*

AEL

PEMEL

500

1000 €/kWel

other cost (share of capital cost) 10 %

efficiency (for AEL and PEMEL) 80 %

depreciation 25 a

rate of interest 6 %

*possible prices in future

19 19

Power-to-Gas – Hydrogen Production Costs

times of negative residual load

time of negative

residual load in h/a

full load hours for 1 GW

electrolysis power in h/a

2020 2 1

2020 159 146

2030 371 344

2030 1230 1174

+10 GW power generation for

stabilization purposes

( +10 GW power generation for

stabilization purposes)

20 20

Power-to-Gas – Hydrogen Production Costs

full load hours for

1 GW electrolysis

power in h/a

hydrogen production cost in ct/kWhth H2 (cost after reconversion in ct/kWhel*)

AEL PEMEL

2020 1 3865 (6442) 7731 (12885)

2020 146 37 (61) 74 (123)

2030 344 16 (26) 31 (52)

2030 1174 5 (8) 9 (15)

-10 GW power generation

full load hours

resulting hydrogen production cost

* assumption: 60 % efficiency (gas turbine combined cycle)

21 21

Technological Megatrends - Electromobility

22 22

Electromobility

Potential Electrical Mileage

RE

EV

**

Charging Power

[kW]

Battery Capacity

@ Home @ Office 10 kWh 20 kWh

3 0 61,8 % 78,8 %

3 3 71,3 % 81,9 %

0 3 38,9 % 54,8 %

0 22 39,8 % 56,7 %

* Battery Electric Vehicle , ** Range Extended Electrical Vehicle

BE

V*

Charging Power

[kW]

Battery Capacity

@ Home @ Office 20 kWh 40 kWh

3 0 58,6 % 79,2 %

3 3 70,2 % 79,9 %

22 0 59,1 % 79,7 %

23 23

Electromobility

Usability Factors

average daily consumption: 8 – 10 kWh charging time about 3 to 4 hours

percentage of parking time: 90 – 95 %

@ home

park

ing p

robabili

ty w

ithin

15 m

inute

s

@ office

Ho

ur

of D

ay

Mo Tu We Th Fr Sa Su H

ou

r o

f D

ay

Mo Tu We Th Fr Sa Su

pa

rkin

g p

rob

ab

ility

with

in 1

5 m

inu

tes

24 24

2030 - 7. Mio EV‘s 2020 - 1. Mio EV‘s

*rsl = residual load

Electromobility

25 25

Technological Megatrends – Flexibilization of Load

26 26

Potential of Demand Side Management for Industrial Processes – Dena Netzstudie II

Average DSM – Potential

1.811 MW positive DSM – Potential

410 MW negative DSM – Potential

Source: EWI, 2010

Electricity demand [GWh]

Positive DSM-potential [MW]

Negative DSM-potential [MW]

Ele

ctr

icity d

em

an

d [

GW

h] D

SM

pote

ntia

l [MW

]

Aluminum Chemistry Steel Paper Cement

positive = reduction of load

negative = increase of load

27 27

Demand Side Management Potential for Commerce, Trade and Services – Dena Netzstudie II

Average DSM-Potential

2.420 MW positive

14.275 MW negative (mainly night storage heating)

Source: EWI, 2010

Ele

ctr

icity d

em

an

d [

GW

h]

DS

M p

ote

ntia

l [MW

]

Process Cooling Process Heat Venting Climatization Heating

Electricity demand [GWh]

Positive DSM-potential [MW]

Negative DSM-potential [MW]

28 28

Demand Side Management for Industrial Processes

0

1.000

2.000

3.000

4.000

5.000

6.000

7.000

8.000

9.000

10.000

5 min 15 min 1 h 4 h

Te

ch

nic

al P

ote

nti

al o

f F

lex

ible

L

oa

d [

MW

]

residual sectors

glass sector

mechanical engineering

vehicle sector

metal processing

paper

chemistry

food

29 29

Limitations in Price Fluctuations

30 30

Limitations in Price Fluctuations - Volatility of the Residual Load

• Minimum in the morning and during noon

• Maximum during early noon and evening

Choose timeframes according to this observation in order to analyze the dynamics

of the residual load

0

10

20

30

40

50

60

1 3 5 7 9 11 13 15 17 19 21 23

Re

sid

ual

Lo

ad [

GW

]

Hour of the Day

Scenario PV: 60 GW Wind: 60 GW

Scenario PV: 30 GW Wind: 30 GW

©FfE MOS_00064

31 31

Limitations in Price Fluctuations - Volatility of the Residual Load

Minimum of the Residual Load (rsl) within Timeframe

Diffe

ren

ce

be

twe

en

th

e M

axim

imu

m a

nd

Min

imu

m o

f

the

Re

sid

ua

l L

oa

d w

ith

in u

se

d T

ime

fra

me

s

32 32

Limitations in Price Fluctuations - Volatility of the Residual Load

33 33

Today

Limitations in Price Fluctuations - Volatility of the Residual Load

34 34

Today

Limitations in Price Fluctuations - Volatility of the Residual Load

35 35

Today

Limitations in Price Fluctuations - Volatility of the Residual Load

36 36

Today

Limitations in Price Fluctuations - Volatility of the Residual Load

37 37

Today

Limitations in Price Fluctuations - Volatility of the Residual Load

38 38

Today

Limitations in Price Fluctuations - Volatility of the Residual Load

39 39

Today

Limitations in Price Fluctuations - Volatility of the Residual Load

Power 2 Heat + 2 GW

Power 2 Gas + 0 – 2 GW

Electromobility + 0.5 – 2 GW

Flexibilization of Load +/- 1 – 2 GW

Pumped Hydro Storage +/- 2 - 3 GW

Increased Im-/Export capacities +/- 2 - 3 GW

…educated guessing on how storage technologies can influence the residual load

12 GW – possible shift

by storage technologies

40 40

Limitations in Price Fluctuations - Volatility of the Residual Load

Though plenty of the points lie

within the grey shaded area we will

have to expect significant price fluctuations! Today

41 41

Limitations in Price Fluctuations - Conclusion

The expected increase of price fluctuations can be limited by

storage technologies to a certain extend

Downwards?

limited by marginal costs of emerging storage technologies

depending on available power and capacity

Upwards?

hard coal as well as gas prices

decharging capacity of storage technologies

Flexibilization of Load

Electromobility (depending on charging strategy)

42 42

Limitations in Price Fluctuations - Conclusion

Which Markets will have to deal with increasing price fluctuations?

Day-Ahead:

enough capacity

rare occurrences of extremely low prices chance for DSM?

Control reserve:

Minute Reserve: hardly any revenues possible

Secondary Control Reserve:

Positive: extremely low revenues, going down to zero

Negative: still attractive for some applications

Intraday:

low online-capacity demand for high flexibility high price volatility expected.

high uncertainty (grid restrictions, …)

43 43

Thank you for your attention and the support of

Christoph Pellinger: [email protected] / +49-89-158-121-70