Danes decline oil, gas, coal and nuclear

The newly elected Danish centre-left government has set Denmark on a radical decarbonisation course. It has raised the CO2-reduction target from 20 to 40 per cent by 2020 and wants a complete phasing out of all fossil fuel use by 2050. Denmark, poised to take up the EU Presidency in January, already has the highest energy prices in Europe, but the government believes its new ambitious green policies will be good for the economy: they will stimulate green technology with a big potential for jobs and exports.

Denmark is already known as a very ‘green’ country – a world leader in wind power use, but also in district heating systems. These green policies come at a cost: energy levies for Danish companies are 70 per cent higher than the average in the European Union, measured against the final demand for energy. The levies paid on heating and fuel are four times higher than the EU average according to a recent report from the Ministry of Taxation (Energiafgift for erhvervogkonkurrenceevne, in Danish only).
Electricity prices for households are the most expensive in the EU.

However, this has not deterred the new centre-left coalition government, which took up the reigns of government in October, from raising the decarbonisation bar for the future even higher. Much higher, in fact. In the new energy package, named Our Future Energy – which was presented on 25 November by the new minister for Climate, Energy and Building, Martin Lidegaard, just before he left for the UN Climate Conference in Durban – the government proposes a doubling of the CO2 emission reduction target from 20% to 40% by 2020, a phasing out of coal use in 2030, with no carbon capture and storage (CCS) envisaged, and a complete phasing out of all fossil fuels by 2050. In addition, electricity production from wind power must be increased from 22% now to a whopping 50% in 2020.

Broad political agreement 

Living up to these green ideals is going to be far from easy. In 2010 fossil fuels still supplied 79 per cent of gross energy consumption in Denmark, with a share of 21 per cent for gas,18 per cent for coal, 40 per cent for oil. For one thing, the combined heat and power stations that feed hot water into the district heating systems – which in Denmark serve 62 per cent of private households – will gradually have to be converted from coal to biomass, which will necessitate the import of over 1.5 million tons of imported wood pellets annually (e.g. from Russia, Canada and Ghana).

Still, the Danish energy sector seems to be unfazed by the prospect of a carbon-free future. Lars Aagaard, managing director of the Danish Energy Association, which represents the Danish power generation and distribution companies, says of the 50 per cent wind power target: ‘It is extremely ambitious eight years from now, given it has taken 20-30 years to achieve 22 per cent, but it is not impossible’.

The ‘real challenge’, he adds, ‘will be to use the fluctuating electricity in such a way we will get a maximum of benefits from it. We will need to introduce big heat pumps in the district heating system – replacing coal, gas and biomass. We will also need plans for converting individual heating from oil- and gas fired boilers to heat pumps and for using electricity to power cars. And then we will need to have much more capacity in transmission lines to the rest of Europe, including new transmission lines to e.g. the UK.’     
             
Aagaard says he hopes for a broad political agreement on the package, so that a future change of government does not change the incentives for investments. Though having a majority in parliament the new government is – as has been the tradition in Denmark for 40 years – expected to negotiate a broad political agreement with the opposition. This may well be possible since the outgoing, centre-right government in February this year presented its own decarbonisation plan called ‘Energy Strategy 2050 – from coal, oil and gas to green energy’, which was not so very different, though it had a less ambitious timetable and targets.

Creation of jobs

 

In a first reaction, energy spokesman Lars Christian Lilleholt of the Liberal Party Venstre, which formed a coalition with the Conservatives in the previous government, said the ambitious policy of the new government will be too costly for consumers and damage the competitiveness of the business community.

Still, a compromise will probably be achieved. For a number of years now there has been a tradition of broad agreements on Danish energy policy with a strong emphasis on promoting wind power and CO2-reduction without much concern for the electricity prices paid by households. A compromise deal might lead to a lower wind power target, but offer higher subsidies for biogas and second-generation ethanol (based on straw), which is what the farming industry and green biotechnology companies have been lobbying for. Venstre generally draws strong support from the agricultural sector. At this moment, more than 1 million tons of straw is used annually to fuel power stations, but this can only be burned together with coal. If coal is phased out, that won’t be possible anymore.

According to the government, the proposals will cost DK5.6 billion (€0.75 billion) annually by 2020, in addition to a presumed increase in the price of imported coal and gas during the coming decade. But Lidegaard and the new prime minister HelleThorning-Schmidt of the Social-Democratic Party strongly insist that their policy will stimulate the development of new green technologies, e.g. in smart grids and electric cars, which will lead to the creation of jobs and generate income from exports. The package promises around 5,500 new "green" jobs per year in the coming years, but the government has made no attempt to find out how much of this job creation is the result of substitution (i.e. whether there will be a net increase of jobs).

Lidegaard, a former MP, was working chairman of a green think tank, Concito, which he helped to establish after failing to get reelected to Parliament in 2007. Concito has been lobbying strongly for green investments in wind power, energy savings, and so on, over the past few years.

New green times 

Outside observers might think that the costly green policies of the government would lead to strong criticism in Denmark, but that is not the case at all. The Federation of Danish Industry, for instance, like the Danish Energy Association, has welcomed the package – which will benefit part of its membership – although it has warned against raising energy costs further for the industry. In fact, the package includes special measures for highly energy-intensive industries. The prime minister has said that ‘industry and other export enterprises must have time to adjust to the new green times’.

The costs of the package will be paid through the Public Service Obligation (PSO) system, which is basically a tax on electricity which the state-owned Transmission System Operator (TSO) Energinet.dk
is empowered to collect to finance subsidies for renewable energy and green R&D. At present the PSO burden amounts to about half a billion euros per year. This amount does not show in the government budget or in the tax statistics. Most of this money now goes to wind energy. The new package speaks of additional costs of about three-quarters of a billion euros in increased annual PSO-charges. That includes a new levy to compensate the government for lost taxes on coal use when coal is phased out.
Among energy experts there is only a handful of individuals who question the coherence of Danish energy policy, but they are not given much space in the public debate. ‘You are not supposed to question the energy policy. If you do so, you get marginalised’, says Paul-Frederik Bach, an independent consultant and blogger on electricity planning who worked as planning director for the systems operator in the west of Denmark for many years. ‘There is a strong group thinking supporting wind power and renewables and the phasing out of fossil fuels. I think this is an offspring of many years of global warming debate in this country.’

Then there is the state-financed so-called Economic Council of Wise Men – four economics professors – who have voiced some criticisms of energy policy, though not so much aimed at the targets as at the methodology. They have argued that it does not make sense to spend money on reducing emissions in industries that are covered by the European Emission Trading Scheme (ETS), as these have to reduce emissions anyway. It makes more sense, they say, to subsidize companies that are not part of the ETS. They have also questioned the relatively large amount of subsidies going to wind power.

Fairy tale of wind turbines 

Yet wind power continues to be the mainstay of Danish energy and climate policy in the new package. The export of wind turbines by Vestas and Siemens Wind Power (until 2004 Danish-owned Bonus Energy) and the jobs associated with their production are often referred to in Denmark as ‘the fairy tale of the wind turbines’. The wind industry employs 25,000 people in Denmark, according to the Danish Wind Industry Association, and in 2010 the export of turbines generated over € 6 billion in revenue. At this moment, though, the Danish producers are suffering under Chinese competition. While Siemens, which has the lead in offshore turbines, has increased its staff during this year, Vestas has had to reduce the number of its employees.
The production of wind energy has for several years amounted to the equivalent of around 20 percent of the total Danish demand for electrical energy – or around 3 percent of total gross energy consumption. As of June 30 this year there were 4984 wind turbines in Denmark, of which 404 were offshore - with an installed capacity of 3701 MW.

The new energy package wants an additional 2100 MW of wind power capacity to be built before 2020, of which 500 MW will be land-based, 400 MW near offshore and 1200 far offshore. This is in addition to the 800 MW of new offshore wind capacity that has already been commissioned and should be on line in 2013.

A major part of the expansion will thus be made offshore. This is mostly because onshore wind turbines are increasingly meeting with NIMBY-resistance in Denmark – especially now that the new generation of wind turbines reach heights of up to 150 metres and emit disturbing low frequency noise. In the past, residents were often persuaded to lend their consent to the construction of turbines by being offered guaranteed power prices or a chance to invest in the project, but these incentives are apparently not sufficient anymore. The number of local civic groups that oppose wind power projects has grown from 40 to 125 during the past year, according to the National Association of Civic Groups against Wind Turbines. In addition, earlier this year a new test centre for giant wind turbines which is being built in Northern Jutland, and for which woods had to be cut down, drew a lot of protest from conservationists and others.

New interconnections

 

The high and increasing share of wind is not without its problems.When production exceeds demand in the Danish system today, electricity is exported at whatever price can be achieved, which is sometimes close to zero or even at a negative price in the Nord Pool system. In those cases the Danish consumer, who has to pay a guaranteed price through the PSO charge, subsidizes consumers in other countries.

The PSO-supported guaranteed price is not fixed, but to give an indication: Dong Energy was granted a price of DK 1.051 (€0.14) per kWh for its 400 MW Anholt offshore park in the Kattegat (between Denmark
and Sweden). According to a recent report from Deloitte, the costs for offshore wind parks can be reduced by 25 to 30 per cent, which would mean that the planned 600 MW Kriegers Flak park in the Baltic Sea could get a guaranteed price of as low as DK 0.781 (€0.105) per kWh. (As an aside, it may be noted that the new government has cancelled the plans of its predecessor to sell a minority share of the state controlled energy company Dong Energy.)

However, now that Danish power production will be greatly expanded, the need to export power at certain times will become even greater. This means that the capacity of transmission lines to Norway, Sweden and Germany will have to be greatly increased. Lars Aagaard of The Danish Energy Association would like to see new interconnections being built to the Netherlands and the UK as well.

The need to export wind power is especially great during the winter months, when wind power production is much higher on average than in the summer. In Denmark, this is also the time when the CHP (combined heat and power) stations need to supply the people with heating and thereby also produce electricity. This means that there will be times with a large overcapacity.

This is already the case now. During the first three (winter)months this year, Denmark exported 1715 MW to Norway and Sweden, and imported only 25 MW from the same countries. In the summer, when wind power production is lower and the Danish CHP stations produce less heat (and thereby electricity), the situation is reversed.

Fortunately, when this happens, Norway and Sweden can usually provide Denmark (and Germany and the Netherlands) with flexible balancing power, thanks to their large hydropower production capacity (except when the Scandinavian water reservoirs are low, which also happens sometimes). Problem is, Norway and Sweden (not to mention Germany) also have plans to greatly expand their power capacity, so they may need their hydropower for themselves in the future.

Ecogrid 

Lars Aagaard, managing director of the Danish Energy Association (photo: Dansk Energi)

For this reason, the Danes realise that they will have to find ways to utilise their electricity locally. This requires a balancing system which can adjust demand to the fluctuating production. One idea that is being investigated is to use wind-based electricity to heat the water in the district heating systems. Managing Director Kim Mortensen of the Danish District Heating Association has promoted this idea as a means to bridge the gap to a future smart grid system.

In the longer run, the Danes hope that the intermittency problem of wind energy can be solved with a smart grid, in which electric cars will also be integrated as well as an increasing number of heat pumps that are to replace oil- and gas-fired furnaces for heating in individual homes outside the district-heated areas.

Lidegaard, the new Minister, has promised to come up with a strategy for establishing such a grid. In October the Smart Grid Network, a group with representatives from research institutions and energy companies, published a number of recommendations for a smart grid strategy.

Earlier this year in the Danish island of Bornholm a large, four-year pilot project was started to test the possibilities and limitations of a Smart Grid system. Organisations from ten countries participate in this partially EU-funded project, called Ecogrid EU. The 2,000 households that are taking part in the pilot will have to show, by their behavior, whether the Danish green dreams can become reality.

Energy priorities for the Danish EU Presidency

As of January 1st Denmark will take over the rotating EU Presidency. In the energy and climate field, Denmark will vigorously promote the adoption of the EU Energy Efficiency Directive. It will also try to limit the amount of CO2 quotas in the European Emission Trading Scheme (ETS), thereby hoping to raise the price of CO2 emission permits. The Danish presidency will also work with the Commission to promote the 2050 Climate Road Map and the 2050 Energy Road Map.


                                                                                                                                                                                                         

Smart Grid Initiatives Address Cyber Security, Renewable Energy Intermittency

Securitizing renewable energy networks from cyber-attacks is not complicated by their oft-cited operational headache of intermittency, but rather by their separation from a utility's control system, said smart grid executives at the Gridwise Global Forum in Washington, DC in early November. Though renewable intermittency adds to the challenge of stabilizing a grid, the forum revealed new evidence of real-world smart grid load shifting that continues to chip away at the tired argument that renewable energy cannot successfully integrate into a legacy grid.

“If renewables are owned by the utility, you’re probably ok, in terms of them being under the utility [security] umbrella.  If they are not part of the utility, then you could have a problem, you just don’t know,” said Ken Geisler, director of business strategy for Siemens Smart Grid Division.  “What extends the threat surface with renewables is that the utility doesn’t own it,” added Jeff Meyers, a smart grid strategy and development expert for Telvent Energy. 
With exceptions in Europe and isolated areas of the U.S., such as West Texas, the Pacific Northwest and parts of California, green energy grids don’t yet provide enough of a utility’s baseload power to be a prime target for an attack.
But even before green grids could become a target for malefactors, the European Union is working to address potential problems in its Smart Grid Committee.  Laurent Schmitt, vice president of innovation and strategy for Paris-based Alstom’s Grid Automation & Smart Grid Solutions, is charged with defining and mapping cyber-security issues for the Committee. “Renewable nodes can be more vulnerable to the degree that the green energy grid is run by someone else.  European distribution networks are already exposed 10-20% to the intermittence of renewables…[and] what concerns the government is that…currently, renewables represent a node that, if attacked, could bring down the network.  The more renewables you have on the network, the bigger the potential impact, though it depends on the existing energy mix.”
Schmitt cited France’s EDF as a prime example of a utility whose renewable grid securitization is critical to protecting its entire electricity grid.  EDF generates 20% of its electricity from renewable sources with remaining power coming from nuclear.  “Nuclear can’t be dialed up for security reasons, so if [EDF] loses its 20%, they have a problem,” Schmitt said.
Intermittency First, Then Security
As Edmund Schweitzer, president of Schweitzer Engineering Laboratories Inc., declared at the Forum’s “Guarding the Grid: Smart Grid and Grid Vulnerability” panel, in terms of security, the nut for renewables to crack remains grid stability.  “Is intermittency a cyber-security problem? No, but it is one regarding successful [grid] integration and stability and the ability to react,” he said.
Smart grid technology itself is often seen as a potential security problem because it opens utility grids to the Internet, so adding a third party-operated, variable renewable resource to a smart grid could potentially further complicate matters.  “Smart grid means more potential penetration points. The more complexity we introduce, in some senses, we’re making ourselves more vulnerable,” says Telvent’s Meyers.  In any case, say Meyers and Siemens’ Geisler, communication is critical to coordinating different types of generation to gain stability and reliability in baseload generation.
Meyers says that means “installing some binary software or firmware, particularly to moving resources, such as turbines or fuel cells.”  Geisler adds that “the technology to do that is out there, there just isn’t anyone doing it much at this point.”  Specifically, says John Soyring, vice president of industry solutions at IBM Corp. in Austin, the industry needs “more dynamic load-shedding with a lower granularity to handle the intermittency of renewables.”
Load-shedding Could Be Key
Although utilities may not yet be doing a lot of real-time, dynamic and finely granular load management for renewable resources, they are doing more of it than ever before, particularly in areas where renewable resources make up sizable portions of the energy generation mixes.  These advances are the hallmark of a smart grid.
Randy Berry, vice president of Kirkland, WA-based Power Systems Consultants Inc. said that Mason County Public Utility District 3 (PUD3), in a Bonneville Power Administration project, is testing GridMobility technology on about 100 residential water heaters in a smart grid project designed to manage the fluctuations of wind energy generation.
With GridMobility technology, PUD3 monitors water heater usage on the grid for the participating homes.  During heavy periods, they can shut down the water heater. Then during light times when wind energy is coming in, they turn it on. They use a formula that ensures the water heater never gets too little power to keep the water hot. If that happens, the consumer can flip a switch to override the system.  Allowing the utility to control the heater reduces its need to rely on hydropower to balance its load, providing more flexibility to use wind power.
The project began last fall and so far has been a success. Berry says that PUD3 has found that choreographing the duty cycle of water heaters created a 30% increase in efficiency, a 90% reduction in the peak energy used for water heating and a 78% increase in renewable energy used to heat water.
Austin Energy did some similar dynamic load shedding last summer, said Soyring, but at the level of one of the city’s approximately 30 sections of several thousand homes. “With more granularity, you can, for example, shut down the AC in a home for 15 minutes, which would have no real impact on the climate, and is non-invasive,” he said, noting that Austin Energy customers can already buy a thermostat that will do that.
 “Grids and operators are getting smarter, but we are also on the verge of consumers being able to do all of these things,” says PSC’s Berry.  “Like, why can’t I charge my iPhone only when the wind blows?”

Germany's Solar Identity Crisis

SAN FRANCISCO -- Germany broke its own solar energy installation record in 2011 and added 7.5 gigawatts, the country's regulators said Monday. The question for the reigning solar market now appears to be: how much more does it want?

Or rather, how much more German consumers want to pay for solar energy, which still commands higher prices than conventional sources of power. The country added 7.4 gigawatts of photovoltaic systems in 2010 and with the new record for 2011, political debate has surfaced once again about the fate of the country’s solar incentive policy. German’s minister of economy, Philipp Roesler, has proposed to cap the country’s annual installation at 1 gigawatt in order to reduce the costs of the program to consumers.
The proposal has been criticized by the minister of energy, Norbert Roettgen and is no doubt unpopular among solar companies. The country is the largest solar energy market in the world thanks to the feed-in tariff program is put in roughly a decade ago. Feed-in tariffs, which are actually government-set pricing that utilities must pay to solar energy producers, have been falling throughout the years, as they are designed to do whenever installations hit a certain number.
This type of rolling cap is more flexible and typically prompts a rush to erect solar arrays right before an expected decline in solar pricing. The new, lower set of tariffs (15 percent drop) went into effect at the beginning of this month. That anticipated decline prompted developers to add 3 gigawatts in December alone.
If the country installs 225 megawatts from January through April, the solar electric pricing is set to fall by another 15 percent.
An annual cap, on the other hand, will shrink the German market significantly, much like the annual cap that caused the Spanish PV market to go from 2.7 gigawatts in 2008 to 69 megawatts in 2009, according to the European Photovoltaic Industry Association.
Germany politicians have debated and enacted additional reductions of the solar incentive before. The debate also often centered on whether the solar market had grown enough to no longer require much government help. At the end of last year, solar accounted for only three percent of Germany's power mix. 
The 1-gigawatt figure has been proposed before, in early 2011. Back then, the idea was to cut the feed-in tariffs for every 1 gigawatt installed.
While Germany remains an important solar market, many manufactures and project developers have fanned out in greater numbers to newer markets such as the United States, China and India. China and India both have feed-in tariffs now, so the market growth should last for a while, or until the governments changed their minds.
The United States has no feed-in tariff policy but a hodge-podge of mandates by certain states to add renewable power generation. While the U.S. market has grown quickly in recent years, analysts are expecting a slower increase in 2012 partly as a result of the demise of a federal program that provided cash to cover 30 percent of a project’s cost.
Solar manufactures also expect the impact of the solar market crash of 2011 — where solar panel prices fell around 40 percent as a result of an inventory pileup — to linger at least in early 2012.

ΔΕΗ: δυο «μνηστήρες» για τη διασύνδεση των Κυκλάδων

Γερμανοί, Γάλλοι, Ιταλοί αλλά και Έλληνες διεκδικούν το έργο ηλεκτρικής διασύνδεσης των Kυκλάδων, συνολικού προϋπολογισμού ύψους 400 εκατ. ευρώ που έχει δημοπρατήσει η ΔEH.

Ειδικότερα, σύμφωνα με δημοσίευμα της Καθημερινής, τεχνικές προσφορές στον σχετικό διαγωνισμό κατέθεσε μια γερμανογαλοϊταλική κοινοπραξία των εταιρειών SIΕMENS-NEXANS-PRYSMIAN και μια γαλλοελληνική των εταιρειών ALSTOM-ΕΛΛΗΝΙΚΑ ΚΑΛΩΔΙΑ.

Όπως αναφέρει το δημοσίευμα, η επιλογή αναδόχου αναμένεται να γίνει τον Mάιο και το έργο εκτιμάται ότι θα ολοκληρωθεί σε διάστημα 42 μηνών από την υπογραφή της σύμβασης ανάθεσης.

Με το έργο οι Kυκλάδες θα αξιοποιήσουν πλήρως τις ΑΠΕ στην ηλεκτροπαραγωγή, υποκαθιστώντας τους συμβατικούς, ρυπογόνους σταθμούς και καλλιεργώντας το έδαφος για επενδύσεις ύψους 15 δισ. ευρώ σε καθαρή ενέργεια.

Σημειώνεται ότι με βάση τις μελέτες της ΡΑΕ και της ΔΕΗ, η  ηλεκτρική διασύνδεση των νησιών είναι ο πλέον οικονομικός τρόπος για την κάλυψη των αναγκών ηλεκτροδότησης.

Balancing Act: How Can We Deal with Variability?

LONDON -- As wind and large-scale solar become more dominant parts of the power generation portfolio, how do we best deal with the variability issue? Can the grid do it all, or demand-side management? Might the answer lie with rapid-response gas turbines that have come onto the market this year?

I'm in London, looking at the website of the National Grid — owner and operator of the transmission grid for England and Wales — reading the real-time electricity demand figures at noon on this mid-September day: 40,434 MW, close to average. This time yesterday it was 41,482 MW, and I could see that over 8000 MW were being supplied from the north of England to the south. Today that figure is less than 5000 MW, and I see that England is still exporting about 400 MW to France and the Netherlands.

In this country, which uses relatively little air conditioning, demand is likely to hit a low of around 25 GW in the summer wee hours (assuming no heatwave), and a high of up to 60 GW on a winter evening. On a winter workday morning, demand can step up from 35 GW to 47 GW between 6am and 8am — an increase, or "slew," of 12 GW over 120 minutes, so averaging 100 MW per minute. Somehow it works — the nation's kettles boil and toasters toast, and office computers power up daily.

The work of TSOs (transmission service operators) throughout Europe, and their equivalents elsewhere, is fascinating: each conducting its own orchestra of power generating options, then importing or exporting some extra volume, to match fluctuating demand. Grid operators have practically no control over electricity demand. Their job is to respond, yet without ever being 100 percent certain what demand will be. Of course, consumption patterns have been recorded and analysed, so the TSOs know broadly what to expect, and when. In Britain the National Grid keeps a careful eye on the TV schedules; the end of a popular program can account for a surge in demand of over 1,000 MW as the nation rushes to boil kettles for tea, while a pause in live coverage of this year's Royal Wedding led to a remarkable 2,400 MW of kettle boiling.

However, the record remains the 2,800 MW surge at the end of the penalty shoot-out after England's World Cup semi-final against West Germany in 1990.

The forecasting of demand has become a sophisticated business, especially as it also underlies the prices at which electricity is bought and sold. Already highly skilled at dealing with routine and exceptional fluctuations in electric power demand, the TSOs have coped well with accommodating high percentages of variable renewables — mostly wind — on the grids, especially as long- and short-term forecasting of wind has become increasingly accurate. It might even be argued that variable wind power is no more of a problem than inflexible "baseload" generators such as coal-fired plants and nuclear, which maintain a relatively steady output regardless of demand, and regardless of output from renewable plants. (In August however, Vattenfall announced it was commencing R&D to look at the impacts of reducing outputs at times when load is low — for example, at night; France is already balancing its nuclear power output.)

The truly "flexible friend" of the TSO is large hydro (natural and pumped storage) which can be brought online, at scale, extremely rapidly. Natural gas plants are very responsive, offering the power generation system flexibility. To meet real peaks of demand, a whole range of options that normally sit in semi-retirement are brought into play, and these are generally the least efficient, least clean, and most expensive options. It makes more sense to balance using interconnections between the different national/regional transmission systems. Back in 2002, the EU Council set the target for all EU Member States to have electricity interconnections equivalent to at least 10 percent of their installed production capacity by 2005. However, by 2010 nine Member States had still not met this target (including the U.K., where total interconnection amounts to some 1.5 GW, rather than the 8.5 GW minimum that its installed capacity of some 85 GW would require.)

So, given the kinds of demand variability that TSOs routinely encounter, their existing "toolkit" of management options enables them to deal well with current levels of variable renewables, particularly wind power. There is the occasional exception (but all generation technologies present the grid with exceptional circumstances from time to time). The flexibility already built into the system has enabled countries such as Germany, Denmark and Spain to accommodate high percentages of variable renewable generation.

But what about stepping up to the next level? Does the power system need an expanded management toolkit, and if so, which tools will be most effective? There are two challenges to meet, as Professor David MacKay writes in his book Sustainable energy — without the hot air on the one hand short-term fluctuations; on the other, long-term lulls. It can happen that high demand days coincide with days of little wind, for example. How is a system with very high levels of integration to deal with that?

Plans to expand renewables are being rolled out across, and beyond, Europe. The UK is developing offshore wind power at a rapid pace, and the National Grid (which also — as NETSO — operates the Scottish grid) is anticipating the need to handle 32–33 GW of wind power capacity by 2020. Across the North Sea, Germany plans to phase out its nuclear generation altogether by 2022, and increase its reliance on renewables. Revisions to Germany's Renewable Energy Sources Act for 2012, which were approved in summer 2011, set a requirement for at least 80 percent of the nation's electricity to come from renewable sources by 2050. This will be achieved incrementally, with a target of between 35 and 40 percent of supply within the coming decade. Not all that will be from variable sources, and much will be distributed power, being fed into the distribution grid but nonetheless having implications for the transmission network.

So what options are on offer? There's upgrading of the grid to offer new connections; making the grid "smarter" and using demand response; there's increasing the flexibility and efficiency of non-renewable generation to work alongside variable renewables, and storage is still much discussed, particularly in relation to fleets of electric vehicles (storage won't be covered here other than in the context of pumped storage).

Transmission Options

As established earlier, the U.K. contains the least well interconnected of Europe's grids, yet is able to respond to big swings in demand. To get a sense of the impact on the system of high levels of wind power anticipated in Britain by 2020, MacKay calculates a wind scenario: "If we scale British wind power up to a capacity of 33 GW (so that it delivers 10 GW on average), we can expect to have occasional slew rates [rate of increase or decrease in output] of 3,700 MW/h. So we need to be able to either power up replacements for wind at a rate of 3.7 GW per hour... or we need to be able to suddenly turn down our demand at a rate of 3.7 GW per hour." As established earlier, such rates are indeed in line with the 12 GW routinely delivered in Britain between 6am and 8am on winter weekday mornings. Nonetheless, the National Grid's 2030 accelerated growth scenario suggests a peak demand in the British market of 56 GW, with 134 GW of installed generation (of which 50 GW would be variable wind generation). With much of that new wind installed offshore, a substantially upgraded transmission system designed for the new circumstances is required.

Denmark's interconnections with Norway and Germany have been an essential ingredient in the success of its wind power sector. The key role of the international transmission grid in enabling Europe's ongoing development of renewably generated electricity is clear, and the subject of an offshore "Supergrid" to connect North Sea countries with one another and with Norway's hydro resource (and potentially with a future Mediterranean solar resource) has been discussed in recent issues of REW (see volume 14/2, March-April 2011).

TSOs are pressing for better international connections: for example, in submissions made to a Committee of British Members of Parliament investigating the potential for a "Supergrid" the National Grid wrote that "Greater electricity interconnection represents a vital part of the UK's low carbon economy. The optimal level of interconnection must be debated and will depend on the generation mix and demand side factors in the UK and mainland Europe. However it is likely that, for the U.K., somewhere around 10-15 GW of interconnection would enable the UK to transition to a low carbon energy mix in an affordable and secure manner." In another submission to the Committee, Daniel Dobbeni of the European Network of Transmission System Operators (ENTSO-E) agreed that without new offshore grid transmission assets "Member States will not achieve their [renewable energy] target. You cannot have one, the new energy mix, without the other, more transmission capacity."

High levels of renewable generation also make demands on the existing grid — demands that it was not designed to cope with, such as transporting large amounts of wind power within a country, or coping with — as in Germany — big numbers of solar modules all feeding current into the grid (most likely the distribution grid, which was not designed for two-way traffic).

Demand response

The field of demand-side management is becoming increasingly sophisticated. At one end of the spectrum, consumers and building managers are being encouraged to purchase more efficient devices and to use them efficiently, as basic good practice. At the other end comes the smart grid, with projects under development from groups such as, in Germany, the Fraunhofer Network on Smart Grids.

One aspect of the smart grid is already going commercial: demand response. EnerNOC, a U.S. business that is now becoming established in the U.K., is a prominent example. Alongside its other energy efficiency offerings, the company's demand response formula (DemandSMART) entails working with businesses and institutions (a supermarket chain, for example, or a university or manufacturing plant) to establish how they could cut power consumption if called upon to do so (up to, say, 50 fewer hours per year) — for example by switching off the power supply to a cold store (which can maintain safe temperatures for hours without being boosted), or by cutting a percentage of lighting, or delaying a power-hungry process until later.

The client then agrees with EnerNOC on a rate that it will be paid for making this cut, and joins the demand-response pool.When grid managers anticipate peaks in demand, they can call on EnerNOC to deliver significant cuts in demand. The fully automated system can do this within a few minutes. As of September 2011, EnerNOC had more than 7,000 MW under management across approximately 11,150 sites. Its website tells power companies that demand response can provide "capacity that's cleaner, faster, and more cost-effective than traditional peaking power plants."

During a heatwave in North America on 22 July, when grid operators were experiencing record demand peaks and prices had shot up to 10 times the 2011 average — US$530/MWh — EnerNOC provided over 1,200 MW of demand response across several U.S. states and Ontario, effectively delivering "negawatts" into the system.

However, EnerNOC is not focusing exclusively on delivering demand response during demand peaks. It is also starting to offer its service specifically to balance variable renewables. In February, it announced an arrangement (again in the U.S.) to supply the Bonneville Power Administration (BPA) with demand response capacity to facilitate grid stability as BPA integrates more wind-powered generation into its transmission system. EnerNOC says this is the first project of its kind to draw upon demand response capacity from commercial and industrial sites to balance both increases and decreases in supply from renewable resources, as well as traditional generation, responding if necessary to changing system needs in less than 10 minutes. In the UK, the company has now started working with Low Carbon London to sign up members to a demand-response scheme that can help with load balancing and variability of renewables.

Natural gas for rapid response

Natural gas has proven credentials as a flexible power generating option, though high efficiency levels are only achieved in CHP mode, or combined cycle. The German energy agency, DENA, has acknowledged the importance of including efficient and responsive fossil fuel generation in future plans. This year has seen some leading gas turbine manufacturers promoting new products as the ideal partner to wind or large solar in both the 50 Hz and 60 Hz markets.

GE, for instance, launched its new FlexEfficiency 50 Combined Cycle Power Plant in May. Explaining that power plants generally provide either flexibility or high efficiency, GE believes this power plant will deliver an unprecedented combination of both. The FlexEfficiency 50 Combined Cycle Power Plant is rated at 510 MW and offers fuel efficiency greater than 61 percent. It is designed to ramp up at a rate of more than 50 MW per minute, "twice the rate of today's industry benchmarks," it says.

Imagine if the 3.6 GW/hour ramp up to compensate for falling wind output (in the scenario envisaged by Mackay) were to be delivered solely by this technology: then eight of these plants would together ramp up at over 400 MW per minute, or 4 GW in just 10 minutes.

GE says that the ability to ramp up and down in response to fluctuations in wind and solar power "is essential if renewable power is going to cost-effectively integrate into power grids around the world on a large scale." Ricardo Cordoba, president of GE Energy for Western Europe and North Africa, says, "This innovation can have a dramatic effect on CO2 emissions and offers a nimble, efficient and cost-effective way for us to help EU countries in their pursuit of 20-20-20 energy goals."

Meanwhile, competitor Alstom is promoting its upgraded GT26 gas turbine to enable integration of intermittent renewable sources of energy. In a GT26 combined cycle achieves an efficiency of over 61 percent and can deliver more than 350 MW to the grid in less than 15 minutes. The GT26, in a one-on-one configuration, is capable of producing more than 500 MW of power.

While such a plant could be tied in to a specific wind or solar farm, essentially creating a hybrid plant, it seems more likely that it would work more effectively at transmission system level — but market conditions will play a role in determining that.

European power generation is heavily reliant on natural gas. Used in highly responsive and efficient turbines, it would appear to be the perfect partner for renewables and a bridge to a low-carbon future. Yet there has to be a caveat — the carbon footprint of the natural gas needs to be taken into account.

Storage

It is often claimed that electricity storage is a prerequisite for high levels of integration of renewable energy as it "absorbs" excess generation and delivers it when needed. There's no means of storing electricity, of course — it needs to be converted into mechanical energy (pumped hydropower, compressed air, flywheel), chemical energy (battery, hydrogen), or heat. That stored energy is then used to generate electricity when needed, incurring some losses each time the conversion is made. De facto storage can also be implemented via the smart grid, effectively shifting the load from mainly heating or cooling procedures to boost demand.

Also being investigated is the opportunity to use an increasingly large fleet of electric or hybrid vehicles to absorb excess generation, recharging their batteries at these times (and even discharging them temporarily). Currently, the best established form of storage is pumped hydro, and it appears unlikely that any other measure will be applied at scale in the near-to-medium future. A study by the German energy agency DENA backs this up.

Following a 2005 study by DENA to investigate the grid upgrading needed to reach the target of generating 20 percent of all energy from renewable sources by 2015, measures were put in place to enhance specific power lines, plus the requirement to add 850 km of new routes within the German transmission grid by 2015. A second study, the DENA Grid Study II, has investigated the additional measures that will be needed (up to 2020 with an outlook to 2025), to fully integrate a level of 39 percent electricity from renewables into Germany's power grid while guaranteeing the security of supply and taking into account the effects of the liberalised European energy market.

As well as looking at additional grid-based solutions and demand response, the study examined storage. Implying the use of hydro storage, it states that "in particular, increased use of energy storage capacity in Southern Germany, the Alpine countries and possibly in Scandinavia means that the grid infrastructure must be expanded." However, it concluded that "construction of additional compressed air and hydrogen storage facilities will not occur as driven by the market by 2020 due to economic aspects and the existing market regulations, in spite of the increasing volatility of generation and the associated electricity price fluctuations. Even with an additional consideration of free storage of generation capacity which could otherwise not be integrated, these storage facilities proved uneconomical."

So how do we best deal with variability? Integrated energy policy and planning is probably the answer, rather than any specific technological solution, and the answers will vary depending on how far we want to go with renewables. Improving the grid is at the heart of any solution, along with big advances in demand-side management. More efficient and flexible non-renewable solutions have an important part to play, but we need to keep a careful eye on the fuel that they use, or apparent efficiencies and CO2 reductions might become meaningless.

China Increases Target for Wind Power Capacity to 1,000 GW by 2050

BEIJING -- The National Energy Administration of China has set a series of development goals for the country's renewable energy sector during the 12th Five-year Development Plan, which shows that by 2015 the country's wind power capacity will reach 100 GW, based on the current capacity of 40 GW.

According to another recently-issued roadmap drawn up for the country’s wind power industry, China’s wind power capacity will reach 200 GW, 400 GW and 1,000 GW by 2020, 2030 and 2050, respectively, making wind one of the five major sources of electricity across the country. Based on this target, by 2050 China’s investment in the wind power sector is expected to reach RMB 12 trillion (approx. US$1.9 trillion), opening the door to many opportunities for its wind power equipment manufacturers. 
“By 2050, wind power projects are expected to address 17 percent of the power demand in China,” said Wang Zhongying, director, research fellow at the Center for Renewable Energy Development of the Energy Research Institute, a part of the National Development and Reform Commission (NDRC). The roadmap also predicts that around 2020, the costs of onshore wind power will be equal to those of coal power.
In particular, the roadmap suggests the following timeline:

• Before 2020, give priority to the development of onshore wind power projects, supplemented by near-shore offshore demonstration projects;
• From 2021 to 2030, lay equal stress on the development of onshore and near-shore wind power projects, supplemented by far-offshore demonstration projects; and
• From 2031 to 2050, realize synchronous development of all three types of projects.

At present, grid connection and rapid need for generated energy are the two major factors restraining the development of China’s wind power industry. “Given the situation, it is urgent for us to work out and implement classified and inter-provincial programs for timely ingesting of wind power,” said Wang Zhongying.
Opportunities for wind power equipment manufacturers
Chinese wind power equipment manufacturers generally saw decreases in earnings this year, mainly due to drops in product prices and reduced demand from downstream industries. Xinjiang Goldwind Science and Technology’s net profits for the first three quarters declined nearly 60 percent year on year. In order to take full advantage of the opportunities brought about by the roadmap, Chinese wind power equipment manufacturers led by Sinovel Wind Group, Xinjiang Goldwind Science and Technology and Xiangtan Electric Manufacturing Co. (XEMC) are set to shift their focus to research and development of high-capacity units.
On October 20, XEMC’s 5-MW direct-drive offshore wind turbines were connected to the grid in the Netherlands, while on October 23, Sinovel Wind Group completed its installation of 6-MW double-fed wind turbines. Huayi Electric recently also announced that it plans to issue additional shares to finance the development of its 6-MW wind turbines.
However, the prospects for high-capacity wind power units are subject to a variety of uncertainties, due to their narrow applications, out-of-date support facilities and unproven quality, noted industry professionals.
According to the 12^th Five-year Development Plan, the installed capacity of offshore wind turbines is expected reach the vicinity of 5,000 MW over the next five years, accounting for only 5 percent of energy production. The space for growth remains limited.

Greece imposes charge on coal-generated power

http://economictimes.indiatimes.com/Energy%20Corner/greece-imposes-charge-on-coal-generated-power/shellarticleshow/11203608.cms

ATHENS: Greece will impose a charge on coal-generated electricity and cut the guaranteed tariffs it pays to renewable energy producers as part of a general energy pricing overhaul, the government said on Wednesday.

State-controlled utility PPC will pay a charge of 2 euros for each megawatt it produces from burning lignite, a form of brown coal that produces almost half of Greece's power needs, the energy ministry said in a statement.

It was not immediately clear if PPC will be allowed to pass on this charge to consumers. The company's new, regulated power prices are expected to be announced by the end of the year.

The lignite charge, which will apply for a year from Jan. 1, will generate around 55 million euros ($72.10 million) and help fund a special account out of which renewable energy producers are paid and which has a deficit of about 200 million euros, according to ministry estimates.

Distorted energy pricing has been criticised by Greece's international lenders and is a stumbling block in efforts to make its economy more competitive, cut dependency on lignite and boost renewables energyproduction.

Wind and solar power cover just seven percent of Greece's total power requirements, against 46 percent for lignite and 8 percent for oil. Renewables capacity, mostly wind, has jumped to about 2 gigawatts this year from a mere 430 megawatts in 2004.

In a separate move to boost the account's coffers, the regulator decided on Tuesday to increase a "special renewables charge," collected through electricity bills, to an average 5.43 euros per megawatt hour from 1.8 euros.

In 2012, the account will receive part of funds currently earmarked for state broadcaster ERT as well as proceeds from the sale of about 10 million tons of carbon emission rights, the ministry said. Greece has raised about 110 million euros from carbon rights sales this year.

On the other hand, Greece will cut guaranteed feed-in tariffs for green energy producers. The move reflects "lower installation costs and more efficient technologies," the ministry said without elaborating.

Industry sources said they expected the reduction to apply primarily to subsidies for solar energy, not wind. The cut will not apply retroactively, the ministry said.