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TRANSCRIPT
VPPs and embedded PV
Presentation at the
Global Renewable Energy Support Programme
Dr Tobias Bischof-NiemzCentre Manager: Energy at the CSIR in South Africa
New Delhi, 30 March 2015
Dr Tobias Bischof-Niemz
Chief Engineer
New Delhi, 30 March 2015
Cell: +27 83 403 1108
Email: [email protected]
Agenda
Virtual Power Plants
1
Embedded PV
What is embedded PV?
Tra
nsm
issi
on
ne
two
rk
Utility-scale
1 75…100 MW and more
2Sources: SMA; CSIR analysis
Distributed
Embedded
2
3
< 1…30 MW
1…1,000 kW
Renewables projects have inherently very different sizes – but
currently only large projects are incentivised through REIPPPP
Large:
Utility-scale
Large:
Utility-scale
Medium:
Distributed Generators
Medium:
Distributed Generators
Small:
Embedded Generators
Small:
Embedded Generators
Wind
PV
1 2 3
Farmers
75 MW
> 100 MW
1…30
MW
1…30
MW
1…1,000
kW
0.5…2
MW
3
Biogas
CSP
Biomass /
Landfill Gas
Small Hydro
Projects too small for technology
Possible, but technology generally
leads to larger projects
Embedded projects too
small for technology
Farmers
Embedded projects too
small for technology
Embedded projects too
small for technology
Sources: CSIR analysis
100 MW
>10
MW
0.5…2 MW
0.5…2 MW
0.5…2 MW
Municipalities
(@ waste water treatment)Feedstock logistics
prohibitive for large
projects
Projects typically not
utility-scale
In today’s power system, “cells” are simply consumers (load) –
generation and balancing of supply/demand happens centrally
Balancing of supply/demand
on central system level
4
Cell =CCLoad
One-directional power flow
Transmission
Distribution
On end-consumer level mostly
no generation, no storage/balancing
capabilities, no manageable loadSources: CSIR analysis
Where a “cell” today is simply a consumer (load), in future it will
consist of generation, storage and manageable loads
A cell can be:
• A residential complex
• A commercial complex
• Individual buildings on CSIR’s campus
• A whole village
• An industrial customer
• Etc.
Generation options can be:
• PV
• Wind
• micro CHP (mCHP), fuel cells
• Biogas
5
• Etc.
Generation
StorageCell =CCLoad
• Biogas
Storage options can be:
• Batteries
• Thermal storage for space heating
• Thermal storage for industrial process heat
• Power-to-gas / power-to-H2
Load options can be:
• Non-interruptable / non-manageable loads
• Manageable loads (e.g. fridges, space cooling, space
heating, pool pumps, water heating, etc.)
• Fuel switch (e.g. power-to-gas or power-to-fuel)
Sources: CSIR analysis
Future power-system architecture: multiple cells of generation, storage
and load are balanced by cell agents and form a Virtual Power Plant
“Super Grid”
Virtual Power Plant
C
C
C
C C
C
C
C
C
CCA
CC
CC
CC
CC CC
CC
CC
CC
CC
CCCACA
C
C
C
C C
C
C
C
C
CCA
CC
CC
CC
CC CC
CC
CC
CC
CC
CCCACAC C
C
CC CC
CC
GG
GG
“Smart Grid”
6
CA =CA =
C
C C
CC
CC CC
GG
C
C
C
C
C C
C
C
C
C
C
CCA
CC
CC
CC
CC
CC CC
CC
CC
CC
CC
CC
CCCACA
C
C
C
C
C C
C
C
C
C
C
CCA
CC
CC
CC
CC
CC CC
CC
CC
CC
CC
CC
CCCACA
C
C C
CC
CC CC
GG
GG
C
C
C
CC
C
C
C CCA
CC
CC
CC
CCCC
CC
CC
CC CCCACACA
Bulk Power AC/DC
Highway
GG
DCAC
Generation
StorageCell =CCLoad
Sources: Siemens
Cell Agent
Inter-temporal and inter-spatial
optimisation of energy demand
and supply between cells
Today: CSIR’s main campus in Pretoria is a large electricity consumer
CSIR Campus today
GPS coordinates
-25.75, 28.28
7Sources: CSIR analysis
CSIR Campus today
� 52 buildings
� 150 ha
� 30 GWh/yr electricity demand
� 3 MW base load
� 5-6 MW peak load
Vision:
The three primary energy sources sun, wind & biomass are at the core
CSIR’s campus load
of one week
Electrolyser
Power
Excess wind/PV
power
8Mixing valve
Hydrogen
Biogas
Gas engines
Biogas/hydrogen mix
HeatPower
?
Sources: Enertrag; modified and expanded by CSIR
In future: hydrogen
fuel station, fuel cells,
synfuels, etc.
The future power system is more distributed and more flexible
Today: Supply follows LoadToday: Supply follows Load Tomorrow: Load follows SupplyTomorrow: Load follows Supply
9
Agenda
Virtual Power Plants
10
Embedded PV
What is different with a high share of renewables?
Distributed Power
Generation
Renewables are inherently smaller in size
than conventionals and they are modular
Grid-technology
Implications
11
System Planner’s /
Operator’s
Paradigm Shift
Democratisation of
Power Generation
Paradigm shift from: “supply follows load”
to “dispatchable load and dispatchable
supply follow fluctuating supply”
Energy Planning and
Operational Implications
Renewables attract new funders due to
granularity and fixed-deposit type of
investment � ownership base very
different as compared to conventionals
Socio-economic
Implications
Sources: CSIR analysis
Background: PV and wind are
intermittent (not “schedulable” /
dispatchable) and have zero
marginal costs � therefore “must
run” in any market setting
Advantages of incentivising embedded PV
Job creation & local content
• Potential for rural enterprises to run a “micro-utility business” with small-scale PV generators � wherever there is a grid, there is a PV business opportunity!
• Huge potential for SMMEs in PV design, installation & verification for residential & commercial customers
Reduced grid losses and system costs
• Embedded PV is close to the load, i.e. grid losses are low (saves add. up to 5% of costs)
+
+
12
• Embedded PV is close to the load, i.e. grid losses are low (saves add. up to 5% of costs)
• Generally only very little grid strengthening and no grid extension required (PV follows the grid)
• Aggregated supply profile of spatially distributed embedded PV generators is very smooth and highly predictable
Reduced transaction costs
• Project development costs, legal fees, environmental assessment, etc. are all reduced or non existent for embedded PV as compared to large PV installations
Funding easier due to granularity (small project size, R 100,000 to few millions)
• With a proper standard offer defined, rooftop PV installation would become bankable
• Banks could put the asset into the home loan for easy financing
12Source: Eskom EPMD analysis
+
+
PV and wind are cost-efficient fuel-savers for gas power plants today
1.03.5
4.0
4.5
R/kWh
4.2
0.1
Capital
Fuel
Fixed O&MRenewables Conventional new-build options
13
0.91.2
3.1
0.9 0.5
0.9
0.9
0.40.6
0.0
0.5
1.0
1.5
2.0
2.5
3.0
Diesel (OCGT)
0.1
Gas (OCGT)
2.2
0.1
Gas (CCGT)
1.2
0.3
Mid-merit Coal
1.3
0.1
Baseload Coal
0.8
0.20.1
Wind
0.7
0.1
PV
1.0
0.1
Assumption: Typical full-load hours per generator assumed (92% for nuclear, 85% for coal, 50% for CCGT, 10% for OCGT). Changing full-load hours for conventionals drastically changes the fixed
cost components per kWh (lower full-load hours � higher capital costs and fixed O&M costs per MWh); average efficiency for CCGT = 50%, average efficiency for OCGT = 35%; gas @ R120/GJ
Source: IRP Update; REIPPPP outcomes; CSIR analysis
50%85% 50% 10%Assumed load factor � 10%
PV has three main cost drivers – LCOE locked in over lifetime of asset
CAPEX
R/kWp
WACC
%
+
Annualised CAPEX
R/kWp/yrf
Annual Costs
R/kWp/yr
1
2
14
R/kWp
OPEX
R/kWp/yr
Annual Energy Yield
kWh/kWp/yr
LCOE
R/kWh./.
R/kWp/yr
Note: Without inflation, i.e. In real terms; LCOE = Levelised Cost of Energy = discounted total lifetime cost of the PV installation divided by discounted total lifetime energy yield of PV installation
Sources: CSIR analysis
3
Uncertainty about future tariff makes investor require higher initial
tariff – with potential subsequent windfall profits
0.6
0.7
0.8
0.9
1.0
R/kWh
?
Effective Tariff
LCOE
15
0.0
0.1
0.2
0.3
0.4
0.5
0.6
2015 2020 2025 2030 2035 2040
PV investment similar to fixed-deposit savings account, thus
requires the same investment certainty, to bring costs down
Note: Without inflation, i.e. In real terms; LCOE = Levelised Cost of Energy = discounted total lifetime cost of the PV installation divided by discounted total lifetime energy yield of PV installation
Sources: CSIR analysis
Uncertainty about future offtake increases LCOE, which pushes
required initial tariff additionally up – with subsequent windfall profits
0.6
0.7
0.8
0.9
1.0
R/kWh
LCOE
Effective Tariff
?
16
0.0
0.1
0.2
0.3
0.4
0.5
0.6
2015 2020 2025 2030 2035 2040
PV investment requires security about tariff and about
offtake in order to bring total cost to the power system down
Note: Without inflation, i.e. In real terms; LCOE = Levelised Cost of Energy = discounted total lifetime cost of the PV installation divided by discounted total lifetime energy yield of PV installation
Sources: CSIR analysis
Higher CAPEX of residential or commercial PV can be compensated by
lower cost of capital
20
25
30
35
CAPEX in R/Wp
Utility-scale
17
0
5
10
15
20
4% 6% 8% 10% 12% 14% 16% 18%
LCOE = 0.6 R/kWh
LCOE = 0.8 R/kWh
LCOE = 1.0 R/kWh
LCOE = 1.2 R/kWh
WACC (nominal)
Assumptions: 20 years lifetime, 1,700 kWh/kWp/yr specific energy yield in year 1, 0.8% annual degradation, 200 R/kWp/yr OPEX, 6% inflation
Source: CSIR analysis
Residential
Commercial
Utility-scale
18
Thank you!