Smart regulatory framework conditions for smart energy systems? - - PowerPoint PPT Presentation
Smart regulatory framework conditions for smart energy systems? Incentives for flexible district heating in the Nordic countries Daniel Mller Sneum (PhD Student), Eli Sandberg (PhD Student), Emilie Rosenlund Soysal (Research Assistant),
Daniel Møller Sneum (PhD Student), Eli Sandberg (PhD Student), Emilie Rosenlund Soysal (Research Assistant), Klaus Skytte (Head of Energy Economics and Regulation), Ole Jess Olsen (Emeritus)
Image: Danfoss. http://districtenergy.danfoss.com/assets/img/desktop/d_1.jpg
CHP Power to heat Biomass boiler Biomass boiler Biomass boiler CHP Power to heat Which configuration provides the lowest levelised cost of heat (LCOH)? Modelling approach Real-world DH flexibility Defining flexibility #1 Defining flexibility #2 Input data #1 Input data #2
CHP Power to heat Biomass boiler Biomass boiler Biomass boiler CHP Power to heat Which configuration provides the lowest levelised cost of heat (LCOH)?
CHP Power to heat Biomass boiler Biomass boiler Biomass boiler CHP Power to heat Which configuration provides the lowest levelised cost of heat (LCOH)?
CHP Power to heat Biomass boiler Biomass boiler Biomass boiler CHP Power to heat Which configuration provides the lowest levelised cost of heat (LCOH)?
Technology setup Grid tariff type Storage DK FI NO SE Wood chip CHP + wood boiler Wood chip CHP + wood boiler Wood chip CHP + EB Capacity charge Wood chip CHP + EB Wood chip CHP + EB Energy charge Wood chip CHP + EB Wood chip boiler Wood chip boiler Wood chip boiler + EB Capacity charge Wood chip boiler + EB Wood chip boiler + EB Energy charge Wood chip boiler + EB
Breakdown of subsidies, taxes, tariffs and other elements
Net Heat Production Cost (NHPC) versus Electricity Spot Price (Start costs excluded) Electricity Spot Price [EUR/MWh-el] 50 45 40 35 30 25 20 15 10 5 NHPC [EUR/MWh-heat] 120 100 80 60 40 20 Oil boiler Electric boiler Bio CHP HeatPump
Bio CHP always cheaper
Further details
2 4 6 8 10 12 14 16 18 20
Electricity price
12 000 EUR x 10 MW = 120 000 EUR 10 MW x 3 hours = 30 MWh 120 000 EUR/30 MWh = 4 000 EUR/MWh Standard house 18 MWh/year = 72 000 EUR/year Example: 10 MW electric boiler, which pays to dispatch when electricity spot price is 7 EUR/MWh Completely infeasible to
For comparison
2000 4000 6000 8000 10000 12000 14000 EUR/MW/month DK [no charge] FI NO SE [time of use]
0% 10% 20% 30% 40% 50% 60% 70% 80%
DH share of heat supply CHP share of DH production P2H share of DH production CHP share of inland electricity production Sweden Norway Finland Denmark
Graph: Sneum DM, Sandberg E, Rosenlund Soysal E, Skytte K, Olsen OJ. Smart regulatory framework conditions for smart energy systems? Incentives for flexible district heating in the Nordic countries 2017. (unpublished primo 2017)
Image: emd.dk/desire/hvidesande/
Heat storage
Reference: www.emd.dk/desire/hvidesande/
As defined in IEA. The power of transformation. Paris: IEA; 2014. doi:10.1007/BF01532548.
CATEGORY INPUT Year of investment 2015 Economic lifetime 20 years – in operation 2016-2035 Investment costs The Norwegian Water Resources and Energy Directorate. Kostnader i energisektoren. Oslo: 2015. Temperatures Climate Forecast System Reanalysis (CFSR) data from each capital region Electricity tariffs Based on the capital region Taxes and additional charges National authorities – 2015 Fuel costs National statistics – 2015, except oil which is set at average common price Electricity spot prices Market data – 2015 projected using Nordic Energy Technology Perspectives Discount rate 4% (equivalent to Danish CBA requirement)
FUEL HEAT
ELECTRICITY
Legend
5.4-6.6 MWTH 45%-55% of peak heat load 6.6 MWTH 55% of peak heat load 5.4 MWTH 2 MWTH 45% of peak heat load 12 MWTH 100% of peak heat load
Scenario Electricity tariff Framework condition Variation # Wood chip CHP + electric boiler Capacity charge With taxes, no heat storage 1 With taxes, with heat storage 2 No taxes, with heat storage 3 Energy charge With taxes, no heat storage 4 With taxes, with heat storage 5 No taxes, with heat storage 6 Wood chip CHP + wood chip boiler
7 With taxes, with heat storage 8 No taxes, with heat storage 9 Wood chip boiler + electric boiler Capacity charge With taxes, no heat storage 10 With taxes, with heat storage 11 No taxes, with heat storage 12 Energy charge With taxes, no heat storage 13 With taxes, with heat storage 14 No taxes, with heat storage 15 Wood chip boiler
16 With taxes, with heat storage 17 No taxes, with heat storage 18
Image: Image: Møller Sneum D, Sandberg E, Rosenlund Soysal E, Skytte K, Olsen OJ. Framework conditions for flexibility in the district heating- electricity interface. Lyngby: 2016.
100 No storage Storage No storage Storage No storage Storage No storage Storage Denmark Finland Norway Sweden EUR/MWh LCOH CO2 tax oil boiler El sale bio CHP Energy tariff electric boiler Energy tax electric boiler Energy tax oil Fixed O&M Fuel cost oil Fuel cost wood chips Green certificates Investments Subsidy on bio CHP heat prod Electricity bought Variable O&M LCOH
No subsidies = high LCOH & vice versa