the energy issue 2014 - continued -

The Energy Issue 2014- continued -

William D’haeseleerKU Leuven Energy Institute

an amount of water

[m3]

flow rate

[m3/s]

volume of water = an amount = a “package” m3 or kilo-liter = kl

flow rate = amount per time m3/s or m3/min or m3/h or kl/h

1 gallon ~ 3,8 liters

1 minute to fill the cup

5 minutes to fill the cup

Energy versus Power

an amount of water[kFh]

flow rate[kF]

volume of water = an amount = a “package” m3 or kF * h or kFh

flow rate = debiet = débit amount per time kl/h or kF

1 gallon ~ 3,8 liters

kF = kilo-FlowkFh = kilo-Flow-hour

Energy versus Power

same energy

= an

amount[kWh]

Power[kW]

Energy versus Power

Small plant, running many hours (like small faucet)

Large plant, with large output running shorter period (like large faucet)

Energy versus Power

Small plant, running many hours (like small faucet)

Large plant, with large output running shorter period (like large faucet)

same energy consumptiondifferent power demand different duration

Energy versus Power

Power & Energy Units

• Energy in Joule J• Power in J/s or J/h

• Alternative name for power J/s = Watt W

or if 1,000 Watt = 1 kWatt 1 kW• Thus energy: 1 J = 1 Ws

or if 1,000 W during 1 hour 1 kWh

Note:

kW=1,000 W MW=1,000,000 W

Session September ,2014

Focus points:

o Electricity Priceso Security of supply

• Gas / Russia• Electric power provision / rolling blackouts

€/MWh

MWh/h

Nuke Coal CCGT Classic Gas

Peak units Wind, Hydro

Supply curve(= marginal cost)

Price setting in a perfect competitive power market

€/MWh

MWh/h


Wind, Hydro

Demand curve


Peak units


€/MWh

MWh/h


Wind, Hydro

Demand curve

Market price (= marginal cost of most expensive generating

unit)


Peak units


€/MWh

MWh/h


Wind, Hydro

Demand curve


unit)


Full cost

Peak units


€/MWh

MWh/h


Wind, Hydro

Demand curve


unit)


Full cost

Potential for new investment

Peak units


William D’haeseleer

Third Handelsblatt Annual Conference, Berlin

EU 20-20-20 targets by 2020

Reduction of greenhouse gases

Energy consumption, Efficiency increase

Share of renewable energy

-20% -20%100%

+20%

8,5%

EU’s implementation - currently

• Much progress build up renewables (+)

• seems to be too nice to be true...

And it is...

• There are major system effects that have been neglected and that may jeopardize further success of renewables deployment!

• One has gone too rapidly recently, with danger of losing support of population!

William D’haeseleer

French Report January 2014

20

EU’s implementation

Issues / challenges / problems in the EU market

• Technical challenges

• Market-integration problems

• Consequences for the CO2 emissions

• End-electricity prices for end consumers


Consequences of renewables quota in end-energy terms (1)

• Total end energy = electric energy + fuel for heat + fuel for transportation

• EU requirement by 2020: 20% of end energy from RES

• For transportation only 10% ... for electric sector ~ 34%

• Expectations / outcome (“steered” by differentiated subsidies): o Hydro ~ only small increase possibleo Biomass ~ moderated increase (protests against co-combustion,

imported biomass pellets, sustainability questions)o Wind onshore + offshore / ENOH onsh ~ 2200h/a offsh ~ 3500 h/ao Solar photovoltaics (PV) / ENOH Belgium ~ 800 h/y

• Total: 8760 h/a low capacity factors of these intermittent sources



• Capacity factors intermittent sources (wind + PV): o Wind onshore + offshore / CF ~ 25% - 30%o Solar photovoltaics (PV) / CF ~ 10%

• To produce 34% electric energy with something that operates only 10% or 25-30% of the time, you must install a large amount of installed power ( called “capacity”) leads to massive overcapacity

• If there is a lot of wind and sun, and low demand (e.g., weekends), then too much electric power produced

• But sometimes in case of cold spell (cfr winter Feb 2012) – with temp inversion... little wind and ‘dark’ (hence no PV) at 17.00h-18.00h, when peak demand arises in NW-Europe! very little RES electricity produced



• Intermittency: defined as “variable” and “partly unpredictable”

• How deal with massive “intermittency” in electricity system?o Back up reserves from flexible dispachable thermal plants (+ & -)o Electric storage (large scale electric storage not available)o Expansion of transmission grido Encourage active demand response (ADR)o Curtailing of superfluous RES production / review priority accesso Mitigate on local level via smart grids

24







25


Some simple technical aspects

• Power expressed in Watt ... kW...MW...GWo Instantaneous power ~ flow (cfr water flow from faucet)o Installed power capacity: max power output of facility

• Nuc pwr plant ~ typically 1000 MW or 1 GW (but instantaneous output at shutdown = 0)• Wind turbine ~ typically 2 tot 5 MW (but instantaneous output depends on wind)

o Examples Belgium• Peak electricity demand ~ 14 GW in winter• Low electricity demand ~ 6-7 GW in summer

• Electrical energy expressed in kWh...MWh...TWh• Annual production / consumption ~ 90 TWh/a

• Difference betwn demand from the grids and consumption (incl own consump)

• Power variations of flexible plants (ramp rates) MW per min... MW/h

26

Ref: Lehner & Schlipf, VGB Powertech, 8/2011

EU’s implementation – technical issues

EU’s implementation – technical issues

28







• Common EU electricity market started in 1996,...then 2003, ...then 2009

• At present ‘third package’ being implemented

• Better European coordination through ENTSO-E, ACER

• Unbundling (generation, transmission, distribution, supply)

• “Alligned” grid codes...

• Market integration elements in place, was bearing fruits...

• But now anew price divergence between countries!

EU’s implementation – market issues

But ... Recent developments... !!!


Ref: CREG 2014

decoupling

31

Source: ACER, 2013

EU’s implementation – market issuesBut ... Recent developments... !!!

68%

50%

32

Source: ACER, 2013

Price differentialHourly wind generation DE

EU’s implementation – market issuesBut ... Recent developments... !!!


• Decoupling prices shows ‘poorer’ functioning of market

• Lower wholesale prices seem to be good news (?)

• But they lead to major problems for owners/operators of thermal plants which are needed for balancing!

• And ironically, end-consumer prices increase rather than decrease (to pay for the levies/subsidies)




• These effects were not foreseen in “liberalized market design”...

• Due to massive injection of zero marginal cost generation (RES)

• Most efficient & flexible plants (CCGTs) are pushed out of merit order ... Tendency for mothballing

• Leads even to negative wholesale prices !!

• Need completely different philosophy whith massive RES, where ‘holding’ capacity ready is remunerated... capacity mechanisms

Ref: F. Roques in “The crisis of the European Electricity System” – FR 2014


The merit order effect of RES

Ref: Factsheet 2014-1 KULv EI


Spread = difference price & production cost = gross profit

EU’s implementation – market issuesPrices too low for covering operational cost of gas plants


The “missing money problem” !!

• The most efficient plants (gas-fired combined cycles – CCGT) are pushed out of the merit order

their capacity factor becomes too low to recover investments

the prices are too low to cover operating costs

many CCGTs are currently shut down and will be mothballed or shut down permanently!

Risk: insufficient capacity (generation adequacy) to do the back up


Negative wholesale prices

Ref: Factsheet 2014-1 KULv EI

41

EU’s implementation – market issuesNegative prices in Germany in period October 2008-October 2009

Negative Wholesale Electrivity Prices

Ref: F. Roques in “The crisis of the European Electricity System” – FR 2014

43


Negative prices in Belgium June 2013


Belgium: the “missing money problem” + nuclear phase outRecall:

Risk: insufficient capacity (generation adequacy) to do the back up

• In case of shortage, peak prices would skyrocket!

• But peak prices not high enough to compensate “losses”

• Need for capacity remuneration mechanisms

• In Belgium: combined with nuclear phase out...

• “Strategic Reserves” (Plan Wathelet)

Influence Doel 3 – Tihange 2 and ... Doel 4

Lack of own cheap generation

46







GHG Target:

-20% compared to 1990

-14% compared to 2005

EU ETS-21% compared

to 2005

Non ETS sectors -10% compared to 2005

27 Member State targets, stretching from -20% to +20%

A shared effort between sectors and MS

EU’s implementationConsequences for the CO2 emissions

First Phase 2005-2007

Second Phase 2008-2012



Second & Third Phases 2012-2014


• CO2 price

Consequences for the CO2 emissions

• Very low prices for CO2 emission permits (“allowances”)

• Due to o economic crisis (less CO2 emissions) in 2008-2014

o “banking” of allowances from phase 2o massive injection RES with priority access reduces

demand for fossil generation reduces demand for CO2 allowances lower CO2 prices

i.e., highly subsidized RES effectively subsidize cheap coal by keeping the CO2 penalties low !!


• Consequences of shale gas in US for CO2 emissions in DE

• System effect due to low gas prices in USA – shale gas

• Gas extremely cheap in the USA


IEA WEO November 2013

EU’s implementationConsequences of shale gas in US for CO2 emissions in DE

Source: CREG, 2014

EU’s implementationConsequences of shale gas in US for CO2 emissions in DE

USA

Europe

Consequences of shale gas in US for CO2 emissions in DE

• System effect due to low gas prices in USA – shale gas

• Gas extremely cheap in the USA

• Gas pushes coal out of merit order in USA

• US coal demand decreased

• Lower coal prices

• USA coal offered to world market ... shipped to Germany

• Cheap US coal used in German coal fired plants

CO2 emissions electricity generation have gone up!

• But does not matter in EU since ETS, only price increase EUAs

• In mean time: world emissions CO2 up up up


58







59

• Consider following consumers (following CREG report)

o Household (“Dc”)• Electricity 3,500 kWh/y

o Professional consumers • Electricity 160,000 kWh/y, low voltage (“Ic”)• Electricity 160,000 kWh/y, medium voltage (“Ic1”)

• Evolution of price from January 2007 till May 2013

Decomposition of energy retail pricesElectricity

60

• Evolution of final price – domestic consumer


Source: CREG, 2013

61

• Composition of final price o Energy priceo Transmissiono Distributiono Public levieso Contribution RES and CHPo Energy taxes and VAT


62

• Composition of final price – domestic consumer


Source: CREG, 2013

63

• Composition of final price – domestic consumer


Source: CREG, 2013

64

• Energy componento Component based on index parameters

• Indexation formula changes not frequently

o Prize ‘freeze’ between April 2012 – December 2012

o As from 2013, changes (indexation) in variable pricing contracts require approval regulator CREG (ex-post)

o Dc: Flanders -1.53 €/MWh (-2.83%) o Dc: Walloon region & Brussels: +2.72 €/MWh (+3.63%)

• Due to evolution index parameters


65

• Evolution of energy price – domestic consumer


Source: CREG, 2013

66

• Transmission tariffo Elia’s transmission grid tariff

• Corrected with loss-percentage of DSO

o Minor component

o Same for Dc and Ic; Ic1 different


67

• Distribution tariffo Introduction of multi-year tariffo Public service

• Flanders: “Free electricity”, public lighting, green certificates and actions for rational energy use

o Consumers on MV face lower tariff• Cascade principle do not bear costs of infrastructure

downstream

o Price evolution: Overall +71.7%• Flanders +41.64 €/MWh (+99.96%) • Walloon region: +13.80 €/MWh (+32.42%) • Brussels: +19.28 €/MWh (+47.81%)


68

• Evolution and composition distribution tariff


Source: CREG, 2013

69

• Public levieso Federal contribution (2.98 €/MWh)

• E.g., denuclearization of BP1 and BP2 Mol-Dessel

o Connection off-shore wind (0.14 €/MWh)

o Green certificates (2.2 €/MWh)• Off-shore wind

o Costs +99.57%


70

• Contribution RES and CHPo Obligations suppliero Costs +119.67%


Source: CREG, 2013

71

• Energy tax and VATo Energy tax: 1.9 €/MWh

o VAT on sum of all components (including tax) • 21% till March 2014• 6% as of April 2014


Waiting time bomb? - Flanders

74

International positioning

75

• Comparison neighboring countries – domestic consumer

International positioning Electricity

Source: CREG, 2014

76

• Comparison neighboring countries – domestic consumer

International positioning Electricity

Source: CREG, 2014

78

energy31%

renew-ables and cogenera-

tion5%

trans-mission

5%

distribu-tion50%

public levies

3% taxes and VAT6%

retail electricity price

energy56%

trans-mission

2%

distribu-tion19%

public levies

4%

taxes and VAT

19%

retail natural gas price

energy36%

distribu-tion10%

public levies1%

taxes and VAT

53%

retail gasoline price

Final reflections on costs all energy end products

Session September ,2014

Focus points:

o Electricity Priceso Security of supply

• Gas / Russia• Electric power provision / rolling blackouts

January 01 2006 & 2009

Source: Wood Mackenzie / Fluxys

RussiaRussia

SoS – Structured definition

1. Strategic Security of Supply

2. Adequacy

3. Avoiding Black outs or Sudden Cuts

SoS – Structured definition (1) Strategic Security of Supply

1. Physical availability of primary energy sourcesenough non-empty wells (reserves), coal mines, uranium minesFor oil, partly the issue of “peak oil”



2. Sufficient investments in production capacity in producer countries

e.g., investments in oil & gas production – also peak oil



2. Sufficient investments in production capacity in producer countries

e.g., investments in oil & gas production – also peak oil3. Geopolitics

unpredictable… … (Iran… Ukraine/RF… Middle

East…)

Geopolitics

Transit Russian gas through the Ukraine

What if Russian embargo? Ref: EWI Köln

What in case of embargo? Ref: Fluxys

But cold spell in February !!!

Supply shortfalls during embargo of 6 months

normal weather in February cold spell in February

What if Russian embargo? Ref: EWI Köln



2. Adequacy


SoS – Structured definition (2) Adequacy

= Sufficient investments in consumer and or transit countries


A – Electric power plants, HV grid, high-p NG pipelines, LV and low-p distribution grid, oil refineries, U-enrichment plants

installations need to be able to cope with baseload, peak load & variable load (transient flexibility, variability, unpredictability)

Adequacy


A – Electric power plants, HV grid, high-p NG pipelines, LV and low-p distribution grid, oil refineries, U-enrichment plants

installations need to be able to cope with baseload, peak load & variable load (transient flexibility, variability, unpredictability)

B – Transit pipelines (NG), LNG ships, cross-border HV lines, oil-tanker fleet,… assure more than one single route/means


Issues that may hamper “adequacy”:

Nature of liberalized markets (economic risk) -- investors demand a higher IRR

Unstable regulatory situation Conflict with environmental policy Uncertain regulatory character; price caps

Complex permitting/licensing processes


Issues that may hamper “adequacy”:

Circumstantial influencing elements Financial market expectations/tendencies Energy policy expectations (green papers,

intentions) Political uncertainties (attitude of political authorities

wrt private investment; ideological tensions in governments on investment choices to be made)

Too low electricity prices (driven by RES); small load factors



2. Adequacy


SoS – Structured definition (3) Avoiding sudden cuts (black outs)

= make sure that the overall system performs as “expected” (for end customer) even in case of unexpected events

i.e., capacity to absorb transients, dynamics, mishaps

= issue of reliability/security

redundancy (e.g., N-1 rule)

related to maintenance, control strategies,…

Cope with storms,…

Need redundancy

N-1

SoS – Structured definition (3) Avoiding sudden cuts (black outs)

Solutions… for SoS

General principles

• Energy efficiency (reduce demand)

o Avoiding kWh and Joules (‘energy’)o Mitigate peak loads (‘power’)

Energy prices must be ‘sufficiently’ high


General principles

• Diversity; spread risk portfolio analysis o Types of fuels/renewables


General principles

• Diversity; spread risk portfolio analysis o Types of fuels/renewableso Origin of the fuels

Actually, entering BE from the East;

So origin RF < 7.1%

Ref: FLUXYS


Example: origin of Natural Gas Belgium

Year 2013


General principles

• Diversity; spread risk portfolio analysis o Types of fuels/renewableso Origin of the fuelso Routes


General principles

• Diversity; spread risk portfolio analysis o Types of fuels/renewableso Origin of the fuelso Routeso Types of technologies sufficient firm generation

capacity

114

Adequacy

• Componentso Generationo Demando Interconnection Capacity

Security of Electric Power Supply BE

115

Generation: Belgian Energy Mix

• High dependency on nuclear power• Renewable energy: installed capacity energy produced

Nuclear: 40.632 GWh

Natural Gas: 18.270 GWh

Water: 1.672 GWh

Wind: 3.563 GWh

Other: 5.490 GWh

Coal: 2.970 GWhPV: 2.424 GWh

Energy produced(2013) [GWh]

Nuclear: 5.925,8 MW

Natural Gas: 5.918,4 MWWater: 1.394,1

MW

Wind: 1.723 MW

Other: 679,8 MW

Coal: 470,0 MW

Liquid Fuel: 215,0 MW PV: 2.818 MW

Installed generation capacity (April 2014) [MW]

NuclearNatural GasWaterWindOtherCoalLiquid FuelPV31,0%30,9%7,3%9,0%3,6%2,5%1,1%

Sources: Elia, ENTSO-E, Apere

116

Nuclear Phase Out2022-23: -2.014 MW

2015: -866 MW

Apr-12

Sep-12

Feb-13

Jul-13

Dec-13

May-14

Oct-14

Mar-15

Aug-15Jan

-16

Jun-16

Nov-16

Apr-17

Sep-17

Feb-18

Jul-18

Dec-18

May-19

Oct-19

Mar-20

Aug-20Jan

-21

Jun-21

Nov-21

Apr-22

Sep-22

Feb-23

Jul-23

Dec-23

May-24

Oct-24

Mar-25

Aug-25Jan

-260

1000

2000

3000

4000

5000

6000

7000

Doel 1Doel 2Doel 3Doel 4Tihange 2Tihange 3Tihange 1

Inst

alle

d ge

nera

tion

capa

city

[MW

]

• Belgian nuclear phase out calendar: “definitive” (?)• Current uncertainty with Doel 3 & Tihange 2

117

Generation: Evolution 2012-17

2012 2013 2014 2015 2016 20170

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20,000

22,000

24,000

6,686 6,686 6,353 5,487 5,487 5,487

9,268 9,1957,563

7,590 7,578 7,037

3,337 3,781

3,7764,307 4,988 5,433

Renewable Energy Flexible productionBase Load

Gene

ratio

n ca

pacit

y [M

W]

Sources: FPS Economy, Elia

118

2012 2013 2014 2015 2016 20170

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20,000

22,000

24,000

6,686 6,686 6,353 5,487 5,487 5,487

9,268 9,1957,563

7,590 7,578 7,037

3,337 3,781

3,7764,307 4,988 5,433


Gene

ratio

n ca

pacit

y [M

W]



119

2012 2013 2014 2015 2016 20170

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20,000

22,000

24,000

6,686 6,686 6,353 5,487 5,487 5,487

9,268 9,1957,563

7,590 7,578 7,037

3,337 3,781

3,7764,307 4,988 5,433


Gene

ratio

n ca

pacit

y [M

W]



120

Generation: Ancillary services

• 646 MW Reserves held by Elia

Sources: FPS Economy, Elia2012 2013 2014 2015 2016 2017

-4,000

-2,000

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20,000

22,000

24,000

6,686 6,686 6,353 5,487 5,487 5,487

8,646 8,5736,941

6,968 6,956 6,415

3,337 3,781

3,7764,307 4,988 5,433

Renewable EnergyAncillary ServicesFlexible ProductionBase Load

Gene

ratio

n ca

pacit

y [M

W]

121

Generation: Outages


-4,000

-2,000

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20,000

22,000

24,000

6,537 6,540 6,198 5,351 5,356 5.356

8,440 8,3726,757

6,781 6,776 6,247

3,263 3,698

3,684 4,201 4,869 5,303

Planned OutagesRenewable EnergyAncillary ServicesFlexible ProductionBase Load

Gene

ratio

n ca

pacit

y [M

W]

122

Generation: Doel 3 & Tihange 2 out


-4,000

-2,000

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20,000

22,000

24,000

4,523 4,526 4,184 3,337 3,342 3.342

8,440 8,3726,757

6,781 6,776 6,247

3,263 3,698

3,684 4,201 4,869 5,303

-2.014 -2.014 -2.014 -2.014 -2.014 -2.014

Doel 3 & Tihange 2Planned OutagesRenewable EnergyAncillary ServicesFlexible ProductionBase Load

Gene

ratio

n ca

pacit

y [M

W]

123

Adequacy



124

Demand: Peak

• Security of supply Peak

• Peak history:

• High correlation for peaks between BE, NL & FR

• Most peaks occur after 6PM

Entso-e [MW] Change

2007 14074

2008 13584 -3,48%

2009 13666 0,60%

2010 14274 4,45%

2011 14081 -1,35%

2012 14191 0,78%

2013 13345 -5,96%

125

Demand: Peak 2012


-4,000

-2,000

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20,000

22,000

24,000

6,537 6,540 6,198 5,351 5,356 5.356

8,440 8,3726,757

6,781 6,776 6,247

3,263 3,698

3,684 4,201 4,869 5,303Planned OutagesRenewable EnergyAncillary ServicesFlexible ProductionBase LoadPeak 2012

Gene

ratio

n ca

pacit

y [M

W]

126

Demand: Non firm Capacity Renewables


-4,000

-2,000

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20,000

22,000

24,000

6,537 6,540 6,198 5,351 5,356 5.356

8,440 8,3726,757

6,781 6,776 6,247

Planned OutagesAncillary ServicesFlexible ProductionBase LoadPeak 2012

Gene

ratio

n ca

pacit

y [M

W]

K.May U-WETOCO 127

Demand: Doel 3 & Tihange 2

April 30 2014

2012 2013 2014 2015 2016 2017-4,000

-2,000

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20,000

22,000

24,000

4,523 4,526 4,184 3,337 3,342 3.342

8,440 8,3726,757

6,781 6,776 6,247

-2,014 -2,014 -2,014 -2,014 -2,014 -2,014

Doel 3 & Tihange 2Planned OutagesAncillary ServicesFlexible ProductionBase LoadPeak 2012

Gene

ratio

n ca

pacit

y [M

W]

128

Adequacy



• Physical interconnection capacity:o BE-NL: 6.000 MVAo BE-FR: 5.000 MVA

Net Transfer Capacity (NTC)

= Commercial capacity (Winter)o BE->NL: 1.701 MWo NL->BE: 1.701 MWo BE->FR: 2.300 MWo FR->BE: 3.400 MW

Belgian simultaneous import capacity: Summer: 3.000 MW Winter: 3.500 MW

Interconnection Capacity

130

Interconnection Capacity: Winter


-4,000

-2,000

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20,000

22,000

24,000

6,537 6,540 6,198 5,351 5,356 5.356

8,440 8,3726,757

6,781 6,776 6,247

3.500 3.500

3.5003.500 3.500 3.500

3,263 3,698

3,684 4,201 4,869 5,303

Planned OutagesRenewable EnergyInterconnectionAncillary ServicesFlexible ProductionBase LoadPeak 2012

Gene

ratio

n ca

pacit

y [M

W]

131

Interconnection Capacity: Doel 3 & Tihange 2


-4,000

-2,000

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20,000

22,000

24,000

4,523 4,526 4,184 3,337 3,342 3.342

8,440 8,3726,757

6,781 6,776 6,247

3500 3,500

3,5003,500 3,500 3,500

3,263 3,698

3,684 4,201 4,869 5,303

-2,014 -2,014 -2,014 -2,014 -2,014 -2,014

Doel 3 & Tihange 2Planned OutagesRenewable EnergyInterconnectionAncillary ServicesFlexible ProductionBase LoadPeak 2012

Gene

ratio

n ca

pacit

y [M

W]

But should subtract RES...

132

Interconnection Capacity: Are there sellers?

Sources: ENTSO-E

Can we import 3.500 MW?o Technically speaking

yeso Are there sellers?

133

Interconnection Capacity: Are there sellers?

Sources: ENTSO-E

Imports form France:

• High sensitivity of the load to low temperatures

• No surplus generation capacity under severe weather conditions

134

Recall w/o Doel 3 & Tihange 2 2


-4,000

-2,000

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20,000

22,000

24,000

4,523 4,526 4,184 3,337 3,342 3.342

8,440 8,3726,757

6,781 6,776 6,247

3500 3,500

3,5003,500 3,500 3,500

3,263 3,698

3,684 4,201 4,869 5,303

-2,014 -2,014 -2,014 -2,014 -2,014 -2,014

Doel 3 & Tihange 2Planned OutagesRenewable EnergyInterconnectionAncillary ServicesFlexible ProductionBase LoadPeak 2012

Gene

ratio

n ca

pacit

y [M

W]

But should subtract RES...

KCD 3 & CNT 2 out / no RES no import

2012 2013 2014 2015 2016 2017-4,000

-2,000

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20,000

22,000

24,000

4,523 4,526 4,184 3,337 3,342 3.342

8,440 8,3726,757

6,781 6,776 6,247

-2,014 -2,014 -2,014 -2,014 -2,014 -2,014


Gene

ratio

n ca

pacit

y [M

W]

Doel 3 & Tihange 2 available

2012 2013 2014 2015 2016 2017-4,000

-2,000

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20,000

22,000

24,000

6,537 6,540 6,198 5,351 5,356 5.356

8,440 8,3726,757

6,781 6,776 6,247

3.500 3.500

3.5003.500 3.500 3.500

3,263 3,698

3,684 4,201 4,869 5,303

Planned OutagesRenewable EnergyInterconnectionAncillary ServicesFlexible ProductionBase LoadPeak 2012

Gene

ratio

n ca

pacit

y [M

W]

KCD 3 & CNT 2 in / no RES no import

2012 2013 2014 2015 2016 2017-4,000

-2,000

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20,000

22,000

24,000

6,537 6,540 6,198 5,351 5,356 5.356

8,440 8,3726,757

6,781 6,776 6,247

Planned OutagesAncillary ServicesFlexible ProductionBase LoadPeak 2012

Gene

ratio

n ca

pacit

y [M

W]

138

Adequacy


• Plan Wathelet


139

• A public tender aiming for 800 MW of new gas-fired units

• Nuclear phase out:o 10 year lifetime extension of the nuclear plant Tihange 1o Removal of art.9

• Creation of strategic reserves

• Demand side management & storage

• Interconnection (Nemo, Brabo and ALEGrO)

Plan Wathelet

140

• Elia analyzed the situation and the risks for security of supply for the upcoming winter

• Based on Elia’s analysis the Secretary for Energy decided on the need to create a strategic reserves of 800 MW

• Elia has organized a tender for this strategic reserve

• Have to participate: all production units for which closure is announced + all production units which are temporarily shut down

• Can participate: demand side (large consumers, aggregators)

• CREG checks the contracted prices and approve the functioning rules

Plan Wathelet: Strategic reserves

141



-4,000

-2,000

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20,000

22,000

24,000

6,537 6,540 6,198 5,351 5,356 5.356

8,440 8,3726,757

6,781 6,776 6,247

3.500 3.5003.500

3.500 3.500 3.500

3,263 3,6983,684 4,201 4,869 5,303

800800 800 800

Planned OutagesRenewable EnergyInterconnectionStrategic ReservesAncillary ServicesFlexible ProductionBase LoadPeak 2012

Gene

ratio

n ca

pacit

y [M

W]

Non-firm RES

Doel 3 & Tih 2 ??-2014 MW

KCD 3 & CNT 2 out / no RES no import

2012 2013 2014 2015 2016 2017-4,000

-2,000

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20,000

22,000

24,000

4,523 4,526 4,184 3,337 3,342 3.342

8,440 8,3726,757

6,781 6,776 6,247

-2,014 -2,014 -2,014 -2,014 -2,014 -2,014


Gene

ratio

n ca

pacit

y [M

W]

800 MW does not help in 2014 – Hopefully KCD 4 back

143

Range [MW]

Winter 2014/15 0 - 800

Winter 2015/16 1.200 – 2.200

Winter 2016/17 1.300 – 2.300


Ministerial Decree 3 April 2014:

The creation of a Strategic reserve of 800 MW from 1 November 2014 for 3 years.

Now, 850 MW strategic reserve foreseen:- 485 MW Seraing- 265 MW Verbrande Brug – (but still construction works till Jan 2015?)- 100 MW demand reduction large customers

ELIA & CREG force suppliers to be in balance – penalty 4000 €/MWh

Further needs according to Elia analysis:

K.May U-WETOCO 144

• Generation adequacy at stresso Major decrease of flexible generation capacityo Uncertain generation from renewableso Forced outage of Doel 3 & Tihange 2o Deterministic approach fatal / probabilistic approach LOLE perhaps…

• Result:o High dependency on (uncertain) imports to meet peak demando Challenging integration of the growing share of renewables due to

loss of flexible generation capacity

Lessons Learned on Missing Money

April 30 2014

Conclusions• The challenges on energy provision are considerable

o Geopolitics – gas - Russiao Electricity Provision

• Should learn lessons from past experience:o Do not repeat no-no-no attitude (nuc, coal, HV lines)o Now crisis: let ELIA do its job – politics not to intervene!

• Energy issue is very complicated because interactions

more need to study the system effects

• A careful energy policy on EU and Belgium level is necessary – to be taken out of ideological sphere...

the energy issue 2014 - continued -

Documents