Areas of interest Synergies and conflicts between market and - - PowerPoint PPT Presentation

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Areas of interest Synergies and conflicts between market and - - PowerPoint PPT Presentation

Feb 14, 2023 214 likes •358 views

Future Trading Arrangements Role of markets in low carbon electricity systems Goran Strbac Imperial College London Areas of interest Synergies and conflicts between market and subsidies driven investment in low carbon energy system

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Future Trading Arrangements Role of markets in low carbon electricity systems

Goran Strbac Imperial College London

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Areas of interest

  • Synergies and conflicts between market and

subsidies driven investment in low carbon energy system

  • Role of markets in supporting cost effective

integration of low carbon generation and demand technologies

  • Innovative solutions and industry business model
  • Consumer interests
  • Building evidence - case studies
  • Value of DSR and generation flexibility, role of

networks, benefits of EU market integration

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Tongland THE SHETLAND ISLANDS 400kV Substations 275kV Substations 132kV Substations 400kV Circuits 275kV Circuits 132kV Circuits Major Generating Sites Including Pumped Storage Connected at 400kV Connected at 275kV Hydro Generation 2008/09 TRANSMISSION SYSTEM AS AT 31st DECEMBER 2007 5 4 3 2 1 6 7 10 9 8

2 1 3 4 5 6 7 8 9

Pentland Firth 17 16 15 14 11 12 10 13 9 8 6 7 5 9 10 11 13 12 14 2 3 4 1 2 3 4 7 6 5
  • 2020: 25-30% of all electricity

demand to be met by renewable generation

  • 2030+:
  • Largely decarbonised electricity

generation, while……

  • Electrifying segments of

transport and heat sectors …in order to reduce CO2 emissions by 80% by 2050

UK Response to Climate Change Challenge

3

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55% 2010 Asset Utilisation

BaU Flexible Balancing Technologies

2020 2030+ 35% 25%

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Low carbon system integration challenge: degradation in asset utilization

Smart Network Technologies & Interconnection

Demand Response Storage

Flexible Generation

Paradigm shift: from redundancy in assets to intelligent control

System integration costs in low carbon European system may exceed €500b

Volume of the market for flexible balancing technologies >£60b

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Number of hours with zero or negative prices High ¡Genera+on ¡ Flexibility ¡ Low ¡Genera+on ¡ Flexibility ¡ 200 ¡ >1500 ¡

Balancing and Need for Flexibility

Unprecedented price volatility…. value of energy frequently lower than value of flexibility leading to increased base-load & peak generation investment risks... ...while providing significant opportunities for demand side response, storage, flexible generation and interconnection

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Smart Dishwasher Water Heater Washing Machine & Tumble Drier Air Conditioner Refrigerator

Genera+on ¡Mix ¡Flexibility ¡ High ¡ ¡ Low ¡ Cost ¡Savings ¡£/SD ¡ <10 ¡ >100 ¡ CO2 ¡Savings ¡kg/SD/year ¡ <50 ¡ >250 ¡

Demand response in action: demand to follow wind…

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Complexity of demand response and storage: Split benefits

Balancing services Network services

How about DSR & industry business model? Can the market facilitate this?

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Value of Flexible Peaking Plant – 2020+

GW

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Impact of flexibility on plant energy production

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UK ¡is ¡not ¡an ¡island ¡in ¡low ¡carbon ¡future ¡

IR ¡

UK-­‑S ¡

BE ¡

UK-­‑N ¡ Fr-­‑NE ¡ Fr-­‑NW ¡ NO-­‑S ¡

UK-­‑S ¡ ¡6GW ¡ Import: ¡13.1 ¡TWh ¡ Export: ¡17.8 ¡TWh ¡ UK-­‑S ¡ ¡6GW ¡ Import: ¡7.4 ¡TWh ¡ Export: ¡15.9 ¡TWh ¡

NL ¡

UK-­‑S ¡1GW ¡ Import: ¡2.4 ¡TWh ¡ Export: ¡3.0 ¡TWh ¡ UK-­‑N ¡1.5GW ¡ Import: ¡6.0 ¡TWh ¡ Export: ¡4.4 ¡TWh ¡ UK-­‑S ¡ ¡1GW ¡ Import: ¡2.4 ¡TWh ¡ Export: ¡4.3 ¡TWh ¡ UK-­‑S ¡ ¡13GW ¡ Import: ¡51 ¡TWh ¡ Export: ¡0.1 ¡TWh ¡ UK-­‑NI ¡1.5GW ¡ Import: ¡1.4 ¡TWh ¡ Export: ¡1.7 ¡TWh ¡

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EU-wide versus member state centric RES deployment in Europe

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Coordinated new wind and new PV deployment à à saving 146 GW of new capacity

  • Wind in the North
  • PV in the South
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11 48 92 17 65 103 206 Baseline Integrated Int Low TX Int Self-secure Int EU reserve Int DSR

Additional peaking capacity (GW)

EU-wide capacity mechanism can save 100-160 GW

  • f peaking plant

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Can you really trust …… when it comes to security ?

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Market design and regulatory framework Market design:

  • Market to facilitate consumer choice

» Growing value of flexibility in future => energy bills of flexible consumers may be only 30% of these for inflexible consumers

  • Enable competition between smart and asset solutions

Network design:

  • Cost-benefit approach to network operation and design
  • Recognition of smart technologies in network planning

Regulation:

  • Incentivise application of flexible solutions against asset-

based solutions

  • Split Benefits and business model
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Future Trading Arrangements Role of markets in low carbon electricity systems

Goran Strbac Imperial College London