Finnish Energy Scenarios

Increasing Intermittent Renewable Energy Sources (IRES) in Finland

Michael Child

October, 2014

Introduction− Michael Child (DI), Lappeenranta University of Technology

− Michael.Child@lut.fi ; +358 40 8297853− Doctoral student of Electrical Energy Engineering; LUT School of Technology− Supervisor: Christian Breyer, Professor of Solar Economy

− Employed by the Neo-Carbon Energy Project (WP2)− Main research questions:

− What will a sustainable energy system look like in Finland?− What does a least cost scenario look like for different scenario types?− What energy system flexibility requirements are needed in the future?− What is the role of P2G in different scenarios?− Do the different energy pathways of neighbouring countries affect the energy transition

in Finland and vice-versa?− What is the world market potential of P2G?− Will there be resource constraints for the energy transition?

− Doctoral thesis: Transition of the Finnish energy system towards long-term sustainability

Outline

− Introduction− Addressing variability− Market disruption− Demand spikes on winter nights− Storage− Centralised vs. decentralised− Electrification of transport− Questions

A future renewable energy system

Source: http://www.energyplan.eu/smartenergysystems/EnergyPLAN has been developed by the Department of Development and Planning at Aalborg University

Introducing the solutions

Ways of managing variability of IRES

Manage demandForecast resource production and use

Employ storage solutionsUse diverse sources of IRES

Oversize peak generation capacityInterconnect with other consumers and producers

Addressing variability

− Wind and solar are variable, but also predictable and suit demand− Increasingly accurate forecasts are available – Vaisala and 3TIER− Some models may exaggerate variability – check resolution!

− Interconnectors between the Nordic power market and the rest of Europe are needed to balance intermittency

− Interconnection is needed with the thermal energy and mobility sectors− Storage solutions: thermal storage, P2G, P2L, BEVs, electric storage− Role of Demand Side Management (DSM) must be increased

− More flexibility of demand must be introduced− More industries and individuals can be involved

− Oversupply and undersupply can be managed− Strategic placement of solar, curtailment of wind, flexibility of hydro

Addressing variability – Allgäu CaseLoad: •strong daily variation

•seasonal variation •(up to now) nearly no variable/flexible loads

PV: •generation profile suits daily demand but not seasonality •fluctuating but predictable

Wind: •generation profile suits seasonality •strongly fluctuating but predictable

Hydro: •generation profile partly suits seasonality •more stable and predictable

Storage: •relevant when the grids cannot balance •storage is highly relevant for 100% RE (unlikely before 2030 in Finland)

Source: Hlusiak M. and Breyer Ch., 2012. Integrating End-user and Grid focused Batteries and mid- to long-term Power-to-Gas Storage for reaching a 100 % RE Supply, 7th IRES/ 5th IRED, Berlin

Load

PV

WindHydro

Addressing variability - Finland

• Data for Finland (2005) using a weighted average (30,20,20,10,10)

• At no point was there 0 load• Solar PV daily load profile can be

manipulated through strategic placement (SE and SW shifts)

• Wind can be curtailed quickly• IRES can be flexible!

Source: Data originally from NASA SSE and German Aerospace CenterSee also: Pleßmann, G., Erdmann, M., Hlusiak, M., & Breyer, C. (2014). Global energy storage demand for a 100% renewable electricity supply. Energy Procedia, 46, 22-31.

Addressing variability – Hydro power in Finland

• Flexibility of Finnish hydro production is often underestimated• There is no need to consider Norway alone as ’the batteries of Europe’• PHES also needs to be considered

Source: Nordpool http://wwwdynamic.nordpoolspot.com/marketinfo/rescontent/finland/rescontent.cgi

Source: Finnish Energy Industry, Energy Year 2013http://energia.fi/en/statistics-and-publications

Market disruption

− There will be impacts on the current market on a short to medium-term basis

− We must rethink this question− Is the current market preventing the achievement of

societal or environmental goals?− The current market has failed

− “Climate Change presents a unique challenge for economics: it is the greatest and widest-ranging market failure ever seen.”

---Lord Nicholas Stern (former Chief Economist of the World Bank), 2006

− How can we avoid disruption of a new, successful, future market?

− Flexibility of more market participants will be essential− Generators, TSOs, DSOs and end users

Demand spikes on winter nights

− Geothermal heat pumps less of an issue than heat inverters

− What is the nature of the demand spikes?− How and when do they occur? − Winter days more of an issue than

winter nights− Role of hot water storage

− 2-3 day supplies even in homes?− Seasonal storage can work, but is untested

in Finland− What is the role of DSM?

− More market participants must be involved

Storage

− What are the thermal storage options for Finland?

− P2G− Current Finnish gas infrastructure will

enable the energy transformation− More gas storage is required− A lot of research is currently being

performed at LUT− Studies have been released for

Sweden, Germany, the Netherlands and Switzerland

− P2L – more research needed; unlikely to have impact before 2030

− BEVs− Cost and efficiency of electric batteries− CAES not likely in Finland

Solar and seasonal thermal storage

Source: Pauschinger, T. (2013). Solar District Heating with Seasonal Thermal Energy Storage in Germany. http://www.euroheat.org/Event-Presentations-last-years-172.aspx

P2G study by ECN of the Dutch energy system

Conclusions1. In the future Dutch energy system, P2G plays a robust role as part of a technology mix that enables deep CO2 emission reductions by means of far-reaching implementation of solar and wind energy;

2. P2G contributes to the integration of the fluctuating renewable supply from wind and solar-based electricity generation, but it is not the first option in terms of lowest societal costs;

3. The role for P2G in the future Dutch energy system is mainly related to theproduction and subsequent use of hydrogen (power-to-hydrogen), and only to a lesser extent to the further conversion to synthetic methane (power-to-methane);

4. Although P2G is not considered a cost-effective option from a public perspective in the short to medium term, a positive private business case for a specific, local niche application of P2G may still prove feasible.

Source: http://www.energeia.nl/docs/P2G_ECN_2014.pdf

Gas Storage Estimate for Finland – preliminary

See also: http://www.gasum.fi/globalassets/esitykset/kaasurahasto/breyer_gassystemasenergystoragesolutiontosolarpower_gasumsenergy.pdf

Battery storage

• UBS projections for investors (20.08.2014)

• http://knowledge.neri.org.nz/assets/uploads/files/270ac-d1V0tO4LmKMZuB3.pdf

• Solar systems and batteries at the tipping point

• Steeply declining costs• >50% reduction in Li-ion battery

costs by 2020• 10% EV penetration by 2025• EV + solar + battery = the natural

fit• Use of low-cost stationary

batteries in homes could be a game-changer that would severely disrupt the current electricity market

Centralised and decentralised energy systems• Centralised supply evolved due to distance

between fuel supplies and energy consumers as well as need for stable prices

• Difficult question: What is decentralised?• Generation close to demand• Inclusion of various players (citizens,

cooperatives, etc.)• Plants typically < 100 MW

• First studies find that both energy systems show similar total costs• Centralised: lower cost of plants but more

grids needed and less balancing of different weather conditions

• Decentralised: lower cost of capital (lower profit expectation of respective players), more storage in the system

Source: Agora Energiewende, 2013. Kostenoptimaler Ausbau der Erneuerbaren Energien in Deutschland, Berlin, (top)Breyer Ch., Müller B., et al., 2013. Vergleich und Optimierung vonn zentral und dezentral orientierten Ausbaupfaden zu einer Stromversorgung aus EE in DE, RLI, Berlin, (bottom)

Electrification of transport

− Not just a demand problem, but also a supply solution (BEVs)− Smart charging and discharging need not be difficult even though it is a

radical departure from current behaviour− EV demand is much more efficient in terms of primary energy demand− Future energy scenarios estimate 50-100% penetration of EVs in 2050

− Aviation, long distance freight and shipping remain problematic− Other fuels are needed− P2L can help− Not likely issues before 2030

Thank you for your attention!