Value of the interconnectors in the Nordic countries Jacopo Tattini - - PowerPoint PPT Presentation

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Value of the interconnectors in the Nordic countries Jacopo Tattini - - PowerPoint PPT Presentation

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Value of the interconnectors in the Nordic countries Jacopo Tattini PhD Student at Energy System Analysis Group System Analysis Division DTU Management Engineering Maurizio Gargiulo E4SMA Agenda Background TIMES-NordPool Analysis

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Value of the interconnectors in the Nordic countries

Jacopo Tattini PhD Student at Energy System Analysis Group System Analysis Division DTU Management Engineering Maurizio Gargiulo E4SMA

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DTU Management Engineering, Technical University of Denmark

Agenda

  • Background
  • TIMES-NordPool
  • Analysis of power trade in the Nordic countries
  • Analysis of grid expansion possibilities
  • Sensitivity analysis on effect of no grid expansion
  • Conclusions

2 19 November 2015

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DTU Management Engineering, Technical University of Denmark

Agenda

  • Background
  • TIMES-NordPool
  • Analysis of power trade in the Nordic countries
  • Analysis of grid expansion possibilities
  • Sensitivity analysis on effect of no grid expansion
  • Conclusions

3 19 November 2015

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DTU Management Engineering, Technical University of Denmark

Background: Nord Pool market

4 19 November 2015

Nord Pool: power trading market

  • f

Nordic and Baltic countries. The auctioning countries are divided into bidding areas linked with interconnectors controlled by the TSOs. If the power flows between the bidding areas exceed the interconnectors transmission limit, grid congestion

  • ccurs.

Bottlenecks in the interconnectors lead to different prices in the various areas composing the Nordic electric system.

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DTU Management Engineering, Technical University of Denmark

Benefits of interconnectors capacity expansion

Interconnectors are one of the main power price drivers in the Nordic countries Interconnectors are essential for the integration of variable power sources

Interesting to assess their role and their influence on the power trade

5 19 November 2015

Source: L’ Abbate et al. (2011)

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DTU Management Engineering, Technical University of Denmark

Agenda

  • Background
  • TIMES-NordPool
  • Analysis of power trade in the Nordic countries
  • Analysis of grid expansion possibilities
  • Sensitivity analysis on effect of no grid expansion
  • Conclusions

6 19 November 2015

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DTU Management Engineering, Technical University of Denmark

TIMES-NordPool

TIMES-NordPool: represents the Norwegian, Swedish and Finnish power and thermal systems. Purposes:

  • To

be run together with TIMES-DK to better simulate power trade processes

  • Exploring

the future power exchange between the Nordic countries under different assumptions

  • Assessing transmission capacity expansion

under different scenarios

7 19 November 2015

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DTU Management Engineering, Technical University of Denmark

TIMES-NordPool: Spatial resolution

  • Multiregional model: Each country =

One region

  • Interconnectors

between Norway, Finland and Sweden implemented as endogenous trade processes

  • Interconnectors

between Nordic countries and neighboring countries implemented as exogenous trade processes

8 19 November 2015

Power prices and volumes endogenously

  • ptimized

Power volumes calculated according to price related criteria

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DTU Management Engineering, Technical University of Denmark

TIMES-NordPool: Hard-linking with TIMES-DK

9 19 November 2015

TRADE TIMES-NordPool TIMES-DK All interconnections between Nordic countries as endogenous processes

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DTU Management Engineering, Technical University of Denmark

TIMES-NordPool: Time structure

  • Same 32 time slices as TIMES-DK The models are consistent
  • Base Year: 2010
  • Time horizon: 2010-2050

10 19 November 2015

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DTU Management Engineering, Technical University of Denmark

Agenda

  • Background
  • TIMES-NordPool
  • Analysis of power trade in the Nordic countries
  • Analysis of grid expansion possibilities
  • Sensitivity analysis oneffect of no grid expansion
  • Conclusions

11 19 November 2015

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DTU Management Engineering, Technical University of Denmark

Assumptions for the analysis

All analyses on the power trade between the Nordic countries have been performed using TIMES-NordPool hard-linked to TIMES-DK. Baseline scenario considers:

  • DKW and DKE: power and thermal system fossil free by 2035, entire energy system

fossil free by 2050

  • NOR, FIN, SWE: no environmental constraints (NETP Carbon Neutral scenario is

implemented but not activated)

12 19 November 2015

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DTU Management Engineering, Technical University of Denmark

Transmission grid in the base year

13 19 November 2015

Base year

Source: ENTSO-E (2012)

High integration of power systems

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DTU Management Engineering, Technical University of Denmark

Transmission grid expansion

14 19 November 2015

Exogenous grid expansion

Source: ENTSO-E (2014)

Starting grid

+

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DTU Management Engineering, Technical University of Denmark

Power generation in 2050

15 19 November 2015

Solar 35% Wind Onshore 65%

DKE

Solar 18% Wind Onshore 82%

DKW

Coal 9% Hydro 57% Natural Gas 4% Wind Offshore 17% Wind Onshore 13%

NOR

Biomass 4% Coal 19% Hydro 56% Wind Offshore 11% Wind Onshore 6% Nuclear 4%

SWE

Biomass 8% Coal 42% Hydro 13% Wind Offshore 12% Wind Onshore 3% Nuclear 22%

FIN

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DTU Management Engineering, Technical University of Denmark

Electricity prices in 2050

16 19 November 2015

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DTU Management Engineering, Technical University of Denmark

Power trade between Norway and Denmark in 2050

17 19 November 2015

Trade is ongoing:

  • Until marginal costs equal
  • Until congestion occurs

P

  • w

e r p r i c e P

  • w

e r f l

  • w
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DTU Management Engineering, Technical University of Denmark

Price convergence

Between 2010 and 2020 about 7.5 GW of new transmission lines are installed

18 19 November 2015

..less congestions

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DTU Management Engineering, Technical University of Denmark

Agenda

  • Background
  • TIMES-NordPool
  • Analysis of power trade in the Nordic countries
  • Analysis of grid expansion possibilities
  • Sensitivity analysis on effect of no grid expansion
  • Conclusions

19 19 November 2015

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DTU Management Engineering, Technical University of Denmark

Analysis of grid expansion

  • Uncertainty on grid expansion after

2020

  • Endogenous optimization of grid

expansion

  • Possible new interconnectors from

ENTSO-E in Ten-Year Network Development Plan 2014 (TYNDP)

  • Constraint on starting year, no on

transmission capacity

20 19 November 2015

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DTU Management Engineering, Technical University of Denmark

Uncertainty on costs of future interconnectors

Sensitivity analysis with interconnectors costs: under which cost condition the interconnectors are built?

21 19 November 2015

Low Medium High

k€/MW

INVCOST O&M INVCOST O&M INVCOST O&M NOR-SWE 190 0.4 310 0.7 440 1.0 NOR-FIN 600 1.4 1000 2.3 1400 3.2 SWE-FIN 56 0.1 91 0.2 130 0.3 DKW-DKE 430 1.0 725 1.6 1020 2.3 DKW-SWE 560 1.3 930 2.1 1300 2.9 SWE-GER 260 0.6 429 1.0 600 1.4 SWE-LAT 300 0.7 500 1.1 700 1.6 NOR-HOL 1033 2.3 1721 4.0 2410 5.4

Source: ENTSO-E (2014)

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DTU Management Engineering, Technical University of Denmark

Endogenous grid expansion: sensitivity analysis

22 19 November 2015

Low interconnectors costs Medium interconnectors costs High interconnectors costs Exogenous power prices not consistent

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DTU Management Engineering, Technical University of Denmark

Agenda

  • Background
  • TIMES-NordPool
  • Analysis of power trade in the Nordic countries
  • Analysis of grid expansion possibilities
  • Sensitivity analysis on effect of no grid expansion
  • Conclusions

23 19 November 2015

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DTU Management Engineering, Technical University of Denmark

Sensitivity analysis: only existing interconnectors

How does the Nordic power system react to a changeless transmission grid? Only interconnectors existing or under construction by 2015 are considered

24 19 November 2015

Region Average relative price increase Average absolute price increase (€/MWh) Price relative stnrd dev increase DKE 7% 3.4 59% DKW 1% 0.5 64% FIN 1% 0.5 53% NOR 9% 3.9 88% SWE 12% 4.8 87% Most penalized country

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DTU Management Engineering, Technical University of Denmark

Agenda

  • Background
  • TIMES-NordPool
  • Analysis of power trade in the Nordic countries
  • Analysis of grid expansion possibilities
  • Sensitivity analysis on effect of no grid expansion
  • Conclusions

25 19 November 2015

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DTU Management Engineering, Technical University of Denmark

Conclusions

TIMES-NPM hard-linked to TIMES-DK allows:

  • Calculating endogenously the power prices and volumes between Denmark and the

rest of the Nordic countries  Limiting the risk of the assumptions on the exogenous trade processess for the Danish interconnectors

  • Optimizing endogenously the transmission grid expansion
  • Assessing for the Nordic interconnectors the cost thresholds within which they are

feasible

  • Assessing for each Nordic country the average increase of power prices if the

planned interconnectors are not built

26 19 November 2015

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DTU Management Engineering, Technical University of Denmark 27 19 November 2015

Jacopo Tattini jactat@dtu.dk http://www.sys.man.dtu.dk/Research/Energy-Systems-Analysis/PhD-projects