System-Friendly Procurement through Round-the-Clock Power: International Experiences - Fabian Wigand Associate Director at Guidehouse/Navigant ...
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
System-Friendly Procurement through
Round-the-Clock Power: International Experiences
Fabian Wigand
Associate Director at Guidehouse/Navigant
USAID Scaling Up Renewable Energy
June 12, 2020Higher shares of renewable energy require new approaches
to our energy system
Demand-side integration Grid integration
Strategic energy planning Market integration
Procurement: Round-the-Clock RE
More More firm
Benefits of Demand-based
dispatchable RE RE power (on-
Round-the- supply managed
for supply- site or different
Clock power by seller
demand match locations)
6/12/2020 2Chile’s supply blocks enable continuous supply while mitigating
resource risk for sellers (1/II)
Intraday and seasonal supply blocks in Chile’s 2017 auction
Objective Allowing intermittent technologies to optimize their feed-in potential and guarantee
supply to distribution companies.
GW
00:00 – 07:59 08:00 – 17:59 18:00 – 22:59 23:00 – Stylized
23:59 demand
curve
➢ Distribution companies provide demand
projection
➢ Regulator aggregates projected supply
requirements, conducts auction
8:00 18:00 23:00 Time in ➢ Bidders bid for one or several blocks
hours representing projected (not real-time) demand
➢ Blocks have a base and a variable component
to absorb unexpected demand increase
➢ Production deviations settled at spot-market
prices
6/12/2020 3
Sources: ACERA 2017Chile’s supply blocks enable continuous supply while mitigating
resource risk for sellers (1I/II)
Benefit Considerations
▪ Continuous power supply successfully ➢ Compliance of bidders with delivery obligations
contracted – all from new RE cannot yet be evaluated as projects still under
▪ Contracted price of $3.25ct (₹2.5)/kWh lower construction
than spot market prices of $5.5ct (₹4.1)/kWh ➢ Precondition: sufficient information of
distribution company on hourly/seasonal
demand and generation patterns
India SECI 1st “round-the-clock” power procurement - 100% RE supported by energy storage round the
clock
• Continuous supply contracted at $3.9ct (₹2.9)/kWh
• Levelized tariff: $4.7ct (₹3.55) - $4.8ct (₹3.60)/kWh including annual 3% escalation until 15 th year
• 400 MW of capacity awarded
• Supply obligation of min. 80% capacity utilization factor (CUF)
6/12/2020 1 USD = 75.3 Indian Rupees on Jun 10, 2020. Source: Oanda 4
Sources: ACERA 2017, Comisión Nacional de Energía (CNE) 2017, MERCOM India 2020Nevada’s peak tariff rewards supply at peak demand periods (I/II)
Nevada’s 2019 auction
Objective Incentivize supply during summer evening hours (4 – 9 pm)
➢ Procurement of PV + storage capacity to help state meet 2030 target of 50% RE
generation
➢ NV Energy (utility) defined on-peak tariff for summer evening hours (4 – 9 pm)
➢ On-peak tariff paid is 6x higher than off-peak tariff paid to producers
6/12/2020 5
Sources: BNEF 2019Nevada’s peak tariff rewards supply at peak demand periods
(II/II)
Benefit Considerations
▪ Smooth and extended PV output contracted at competitive ➢ Effectiveness in covering peak periods cannot
prices: yet be evaluated as projects still under
• Off-peak price: $2.1ct (₹1.6)- $2.5ct (₹1.9)/kWh construction
• On-peak price: $13.8ct (₹10.4)-$16.1ct (₹12.1)/kWh
• Levelized tariff: $3.68ctts (₹2.8) - $4.28ct (₹3.2) cents/kWh
India: SECI competitive procurement for hybrids with assured peak power supply
Benefit Considerations
1200 MW ISTS-Connected RE Projects with assured Peak Power • Very long supply block - more precise data on
Supply in India the timing of storage needed could attract
Supply during peak periods contracted at competitive tariff: more competitive prices
• Peak blocks (6am–9am; 6pm–12am): $8.1ct (₹6.12) - $9.1ct • PACE-D supports Discoms to forecast
(₹6.85)/kWh demand patterns
• Off-peak blocks (9am – 6pm; 12am – 6am): $3.8ct (₹ 2.88)/kWh
• Levelized tariff: $5.4ct (₹4.04) - $5.7ct (₹4.30)/kWh
6/12/2020
• Discom average purchase cost ~$5.3ct (₹4)/kWh 1 USD = ~75.3 Indian Rupees on Jun 10, 2020. Source: Oanda 6
Sources: BNEF 2019, MERCOM India 2020Germany’s virtual power plants bundle diverse VRE and
dispatchable generation to provide flexible power (I/II)
Objective Optimize operation of generation, demand and storage assets to provide
flexible power
Simplified representation of virtual power plant (Next Kraftwerke)
➢ A control center operates the connected
generation, demand, and storage assets
➢ Assets are forecasted, optimized, and
traded in energy markets like one single
power plant
➢ Example: Provision of reserves:
➢ Pre-qualified assets participate in
reserve market (operated by grid
operators)
6/12/2020 7
Sources: Next KraftwerkeGermany’s virtual power plants bundle diverse VRE and
dispatchable generation to provide flexible power (II/II)
Benefit Considerations
▪ Reduced provision of reserve energy by thermal ➢ Preconditions:
generation: ➢ Liquid wholesale power market and/or
▪ 2016: Provision of 67 MW as primary reserve, reserve market or alternatively PPAs with
67 MW as secondary reserve, and 1160 MW large consumers
as tertiary reserve
India: relevance and examples for aggregator role
• Seasonal variation enables complementary feed-in for onshore wind at different locations, and with solar
at the same locations
• Examples of aggregator role:
• SECI as demand aggregator for state Discoms
• Bundling solar PV with thermal power
• Banking power arrangements between Discoms
6/12/2020 8
Sources: Next KraftwerkeIndia’s physical hybrids provide a more firm RE power and
optimize grid infrastructure use (I/II)
Objective Efficient utilization of land (i.e., kWh/m2) and transmission capacity (i.e.,
MWh/MW), as well as a reduction in the intermittency of VRE generation to
increase grid stability
Simplified representation of a physical hybrid ➢ SECI auctions RE capacity to be
procured as solar-wind-storage
GW
GW
hybrid
Time
➢ Capacity Utilization Factor (CUF)
Time
set at 30% for solar-wind
➢ Solar and wind installation are co-
Substation Transmission located and feed power into a
pool substation.
GW
➢ Power from the pool substation is
Time
Stylized generation profile evacuated into the transmission
grid
6/12/2020 9India’s physical hybrids provide a more firm RE power and
optimize grid infrastructure use (II/II)
Benefit Considerations
▪ Solar-wind hybrid capacity contracted at ➢ Sites with good, often complimentary solar
competitive tariff: and wind resources available in India
▪ 2018: 840 MW at $3.6ct (₹2.67 - ➢ Uniform and ambitious CUF and ceiling prices
₹2.69)/kWh across states
▪ 2019: 720 MW at $3.6ct (₹2.69 - ➢ Only achievable in regions with higher
₹2.70)/kWh RE resource potential
▪ Comparison: Discom average purchase cost ➢ Can restrict number of bidders or risk
~$5.3ct (₹4)/kWh the non-completion of awarded
projects.
6/12/2020 1 USD = ~75.3 Indian Rupees on Jun 10, 2020. Source: Oanda 10
Sources: India Times 2019, MERCOM India 2018, MERCOM India 2020Round-the-clock procurement is driven by buyer requirements
and demand characteristics
RTC concept is unique to India but touches upon system-friendly approaches
piloted in other countries
More More firm
Benefits of Demand-based
dispatchable RE RE power (on-
Round-the- supply managed
for supply- site or different
Clock power by seller
demand match locations)
Chile – Supply
blocks
Nevada – Peak
tariffs
Germany – Virtual
Power Plant
India – Physical
hybrids
6/12/2020 11
SourcesKey take-aways
Countries gradually incorporate elements of RTC procurement to maintaining system reliability
with high RE levels.
RTC elements are new, often too early to assess impact on power system as projects are not built
yet.
Time-based incentives improve supply-demand match and, with storage, reduce intermittency of
variable renewables. Functioning depends on adequate information on current and projected
hourly/seasonal demand and generation patterns, and on recognizing value of dispatchable, more
firm supply.
Virtual hybrids enable dispatchable renewables for flexible power.This and hourly supply
obligations allow buyers to benefit from real-time demand procurement.
Hybrid projects co-locating different renewable energy sources can provide a more stable supply
and reduce grid connection costs.
System integration of variable renewables goes beyond competitive procurement design: grid
expansion and upgrades, system operation procedures and market practices, power system
planning.
6/12/2020 12You can also read
