Ancillary services or capacity when needed

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1 | Title of presentation | Author | YYYY.MM.DD

Ancillary services or capacity when needed

Mats Nilsson

2013-04

Confidentiality - Critical (C4), High (C3), Medium (C2), None (C1)

2 | Title of presentation | Author | YYYY.MM.DD 2

Political emotions…

PASSION!

Confidentiality - Critical (C4), High (C3), Medium (C2), None (C1)

3 | Title of presentation | Author | YYYY.MM.DD

The electricity price in Sweden 1892-2000 (SEK 2000)

0

500

1000

1500

2000

2500

1892 1912 1932 1952 1972 1992

Year

SE

K/M

Wh

“[…] Periodically extremely high prices on Nord Pool.” My translation, my bold

Confidentiality - Critical (C4), High (C3), Medium (C2), None (C1)

4 | Title of presentation | Author | YYYY.MM.DD

Confidentiality - Critical (C4), High (C3), Medium (C2), None (C1)

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Confidentiality - Critical (C4), High (C3), Medium (C2), None (C1)

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Confidentiality - Critical (C4), High (C3), Medium (C2), None (C1)

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Confidentiality - Critical (C4), High (C3), Medium (C2), None (C1)

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Confidentiality - Critical (C4), High (C3), Medium (C2), None (C1)

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$

Environment

Panic?

Protectionism?

Confidentiality - Critical (C4), High (C3), Medium (C2), None (C1)

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Capacity mechanisms in Europe under construction

Confidentiality - Critical (C4), High (C3), Medium (C2), None (C1)

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Demand response should be encouraged

Reserve, max Demand, min

2011/2012 1750 25%

2012/2013 1750 25%

2013/2014 1500 50%

2014/2015 1500 50%

2015/2016 1000 75%

2016/2017 1000 75%

2017/2018 750 100%

2018/2019 750 100%

2019/2020 750 100%

Source: https://lagen.nu/2010:2004

Confidentiality - Critical (C4), High (C3), Medium (C2), None (C1)

12 | Title of presentation | Author | YYYY.MM.DD

The Swedish experience: Transmission stabilised supply 2009-2012

-25 000

-20 000

-15 000

-10 000

-5 000

0

5 000

10 000

jan-1

0

aug-1

0

mar-

11

okt-

11

maj-12

dec-1

2

GW

h

Swedish net exchange 2010 through 2012

Record levels hydro

And “good” nuclear

Extreme winter, low

hydro and nuclear

Extreme winter, low

hydro and nuclear

Exp

ort

Sw

ed

en

Im

po

rt

Confidentiality - Critical (C4), High (C3), Medium (C2), None (C1)

13 | Title of presentation | Author | YYYY.MM.DD

Scandinavia as the battery for urban Europe

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Three intrinsic properties of variable Renewable electricity generation

Output is fluctuating Output is uncertain Resources are

location-specific

• Wind speeds and solar

radiation vary

• Electricity is not a

homogeneous good over

time (storage constraints)

• Thus its value depends on

when it is produced

• Winds and radiation is

uncertain day-ahead

• Adjusting generation on

short notice is costly

(ramping constraints)

• Forecast errors are costly

• Wind and solar resource

quality varies spatially

• Electricity is not a

homogeneous good across

space (grid constraints)

• Thus its value depends on

where it is generated

„Profile costs“ („shaping costs“)

„Balancing costs“ („imbalance costs“)

„Grid-related costs“ („locational / infrastructure

costs“)

Slide courtesy of Lion Hirth

15

Short-term integration costs

Long-term integration costs

System Adaptation: From short-term to long-term Slide courtesy of Lion Hirthj

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Integration costs are a function of the penetration share (and much more)

Slide courtesy of Lion Hirth

Confidentiality - Critical (C4), High (C3), Medium (C2), None (C1)

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Levelized Capital Cost of Capacity

0

20

40

60

80

100

120

140

160

Inte

rcon

nector

Nat

ural G

as

Gas

Tur

bine

Biom

ass

Con

vent

iona

l Coa

l

Hyd

ro p

ower

Wind

Pow

er

Nuc

lear

Pow

er

Pho

tovo

laic

$/M

Wh

18 | Title of presentation | Author | YYYY.MM.DD

Thank you!

Questions?

mats.nilsson2@vattenfall.com

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