European Commission

Assessment of the Required Share for a Stable EU Electricity Supply until 2050
Final Report

Wietze Lise, Jeroen van der Laan, Koen Rademaekers ECORYS Nederland BV
In consortium with:

Frans Nieuwenhout Energy research Centre of the Netherlands (ECN)

Christian Kirchsteiger DG Energy

Contract No TREN/R1/350-2008 Lot 2

EUR 24996 October 2011

Directorate-General for Energy

LEGAL NOTICE This study has been carried out for the Directorate-General for Energy in the European Commission and expresses the opinion of the organisation undertaking the study. These views have not been adopted or in any way approved by the European Commission and should not be relied upon as a statement of the European Commission's or the Energy DGs views. The European Commission does not guarantee the accuracy of the information given in the study, nor does it accept responsibility for any use made thereof. Copyright in this study is held by the European Union. Persons wishing to use the contents of this study (in whole or in part) for purposes other than their personal use are invited to submit a written request to the following address: European Commission Energy/Mobility and Transport DG Library (DM28, 0/36) B-1049 Brussels Fax: (+32-2) 296.04.16

Table of contents

Table of Figures and Tables Figures Tables Preface Executive Summary 1 Introduction 1.1 The European Energy Strategy 1.2 Objectives and Output of this Study 1.3 Structure of this Report 2 Background and Literature Review 2.1 General Approach 2.2 Europes Energy Infrastructure 2.3 Integration of Intermittent Electricity Generation 2.4 Existing Scenarios on Intermittent Electricity Generation Integration 3 Quantification of Integration of Electricity Generated by Intermittent Sources 3.1 General Approach 3.2 Selected Scenarios on Intermittent Generation Integration 3.3 Estimating Costs of Integration of Electricity Generated by Intermittent Sources 3.4 Estimating Stable Supply versus Intermittent Generation Integration 4 Results and Assessment 4.1 Assessment of the Balancing Need due to higher shares of Intermittent Generation 4.2 Adaptation to Higher Shares of Intermittent Generation and Cost Estimates 4.3 Measures for Stable Supply versus Higher Shares of Intermittent Generation 4.4 Analysis of Drivers for increasing Shares of Intermittent Generation 5 References

4 4 4 5 7 9 9 11 11 13 13 13 15 17 21 21 22 23 24 27 27 29 32 34 37 39 41

Annex A: Definitions Annex B: Graphs for Alternative Scenarios

Assessment of Needed Share for Stable EU Electricity Supply until 2050

Table of Figures and Tables

Figures
Figure 1 - Description of Task 1 ..................................................................................................................................... 13 Figure 2 - Energy demand projections under different scenarios ................................................................................... 20 Figure 3 - Description of Task 2 and Task 3................................................................................................................... 21 Figure 4 - Regional division of EU-27 ............................................................................................................................. 23 Figure 5 - The challenge for balancing due to higher shares of intermittent generation in 2030: (residual load duration curve) ............................................................................................................................................................................. 28 Figure 6 - The challenge for balancing due to higher shares of intermittent generation in 2050: (residual load duration curve) ............................................................................................................................................................................. 28 Figure 7 - The challenge for balancing due to higher shares of intermittent generation in 2050: hourly load variation .. 29 Figure 8 - Adaptation cost estimates to accommodate increasing shares of intermittent generation ............................. 31 Figure 9 - Link between the share of flexible supply versus the share of intermittent generation................................... 32 Figure 10 - Link between the balancing need versus share of intermittent generation................................................... 33 Figure 11 - Link stable supply, net balancing need, share of intermittent generation cost and balancing cost for integrating increasing shares of intermittent generation into the interconnected EU-27 power system.......................... 35 Figure 12 - Link between the share of flexible supply versus the share of intermittent generation................................. 41 Figure 13 - Link between the share of flexible supply versus the share of intermittent generation................................. 41 Figure 14 - Link between the share of flexible supply versus the share of intermittent generation................................. 42 Figure 15 - Link between the share of flexible supply versus the share of intermittent generation................................. 42 Figure 16 - Link between the share of flexible supply versus the share of intermittent generation................................. 43 Figure 17 - Link between the share of flexible supply versus the share of intermittent generation................................. 43 Figure 18 - Link between the balancing need -peak versus share of intermittent generation......................................... 44 Figure 19 - Link between the balancing need -peak versus share of intermittent generation......................................... 44 Figure 20 - Link between the balancing need -peak versus share of intermittent generation......................................... 45 Figure 21 - Link between the balancing need -peak versus share of intermittent generation......................................... 45

Tables
Table 1 - Equivalence between three sets of scenarios ................................................................................................. 19 Table 2 - Assumptions for the capital costs for adaptation to intermittent RES shares .................................................. 30 Table 3 - Fuel and CO2 price projections........................................................................................................................ 31 Table 4 - Assumptions for other adaptation cost items to intermittent generation shares .............................................. 31 Table 5 - Assumptions to derive levelised costs of intermittent generation .................................................................... 32

Assessment of Needed Share to Secure EU Electricity Supply until 2050

Preface

The main objective of the study Assessment of the Required Share for a Stable EU Electricity Supply until 2050 is to quantify the overall limits of energy system and thus supply stability under the likely conditions of significantly increased future shares of generation from intermittent sources. The emphasis of this Final Report is to present the results of the above mentioned study. As such, the report includes a review of literature on European energy (infrastructure) policy and the integration of electricity generated from intermittent sources (thus the generation of power that is non-continuous) and the prospective scenarios for the embedded integration of intermittent generation. Therefore, key scenarios from different institutions and data sources for 2050 (and 2030) have been analyzed, specifically based on the achievement of the targeted 80% reduction in greenhouse gases in 2050 from 1990 levels. For the drafted scenarios a merit-order curve is derived to show the increasing marginal costs for embedding higher levels of intermittent generation technologies. In addition, suggestions are made for measuring stable supply, which is a minimum needed level of stability to balance the power system in real time. The policy implication of this analysis is that there are increasing costs associated to the deployment of intermittent generation technologies in the EU-27. If the cost of integrating intermittent generation was to be limited to about 25 billion EUR per year, no more than about 40% of intermittent generation can be integrated in the European power market. The final choice of an acceptable cost increase will be a political choice. This report was written by Ecorys and ECN. From both organizations, the following people have contributed to this report: Dr. Wietze Lise (Ecorys), Mr. Jeroen van der Laan (Ecorys), Mr. Koen Rademaekers (Ecorys) and Mr. Frans Nieuwenhout (ECN). We would like to thank Eurelectric for providing valuable data and information to the team.

This report was commissioned and financed by the Commission of the European Communities. The views expressed herein are those of the Consultant, and do not represent an official view of the Commission.

Rotterdam & Ankara, 4 October 2011

Assessment of Needed Share for Stable EU Electricity Supply until 2050

Executive Summary

Power system balancing will become increasingly important to securing a stable European energy supply. This will also become a significant challenge as the share of electricity generation from intermittent energy sources (e.g. wind and solar PV) increases. This will result in a cost-increasing merit order curve for adaptation to higher shares of intermittent generation, or increasing values for stable supply indicators. The main objective of this study is to show, in a quantitative way, the required share of stable supply under various future shares of intermittent power generation. This study has generated the following outputs: 1. Literature and data review of intermittent generation and existing scenarios; 2. Assessment of costs related to increasing shares of intermittent generation; 3. Assessment of stable supply by developing quantifiable indicators of the two different aspects of stable supply, namely a. Share of flexible supply (generation units which can be ramped up and down quickly to respond to intermittent supply and demand variations); b. The balancing need (which measures the needed flexibility of the power system as the difference between peak and off-peak residual (demand net of intermittent generation)). Based on the literature survey, the most appropriate scenario for this study was identified as the IRENE-40 RES scenario, which also compares well to the ECF 80% RES scenario. Under this scenario a reduction (with respect to 1990 levels) of 95% greenhouse gas emissions in the power sector is realized by 2050 and, in addition, 80% of the generation is from renewable energy sources (RES). This scenario was also chosen, because it can show the impact of the largest shares of intermittent generation (up to 75%), which is the main objective of this study. The EU-27 has been disaggregated into nine European regions, following the ECF 2050 Energy Roadmap. On the one hand, it is not logical to speak about country-level power system characteristics in 2050 (and 2030), because of the ongoing process of cross border market integration. On the other hand, it is not useful to show EU-27-wide aggregates, as it would hide the regional differences. To strike a compromise between these two extremes, data is used for nine regions, following the ECF 2050 Energy Roadmap. In order to quantify the costs of integrating electricity generated from intermittent sources an Adaptation Cost Model (ACM) was developed to analyse the flexibility measures needed to accommodate varying shares of intermittent generation to the EU power system in 2050. The adaptation cost model is based on the following steps: 1. Derivation of the yearly peak and off-peak from the residual load duration curves (which is the normal load duration curve minus intermittent generation (defined in this study as the total sum of wind and solar PV)). 2. Derivation of the amount of flexible supply (defined in this study as the total sum of hydro, gas and oil) and the amount of intermittent generation, over total installed capacity. 3. Division of EU-27 into nine regions for two years (2030 and 2050) to obtain reliable data for (v1) intermittent generation, (v2) balancing need (defined in this study as the difference between peak and off-peak over peak) and (v3) flexible supply. 4. Establishing the link between intermittent generation with balancing need (e1) and intermittent generation with flexible supply (e2) through two regression equations.

Assessment of Needed Share for Stable EU Electricity Supply until 2050

5. Based on an amount for the yearly peak for EU-27 (700 GW), the yearly off-peak can be calculated through a derived regression equation between balancing need and intermittent generation (e1). 6. The gross balancing need is defined as the difference between peak and off-peak electricity demand (in GWs). The term balancing is used here to stress the importance of balancing demand and generation. 7. The amount of stable supply follows from the derived regression equation between flexible supply and intermittent generation (e2). 8. The net balancing need is defined as the gross balancing need minus stable supply. The value is non-negative, where a negative value means that there is no net balancing need. 9. In order to meet the net balancing need, abatement options and costs are derived, enabling calculation of a merit order curve for intermittent generation integration into the grid. 10. For comparison, the intermittent generation cost is also calculated, defined as the cost per installed capacity (expressed in /kW/year), accounting for all capital and operational costs. 11. These steps when performed for increasing shares of intermittent generation lead to a curve for balancing cost. Stable supply, net balancing need, intermittent generation cost and balancing cost can all be presented in one graph to complete the adaptation cost model. The following graph shows the result.
Figure - Link stable supply, net balancing need, share of intermittent generation cost and balancing cost for integrating increasing shares of intermittent generation into the interconnected EU-27 power system

200

Balancingcost Intermittentgenerationcost Stablesupply(GW) Netbalancingneed(GW)

1600

Billionperyear

150

1200

100

800

50

400

0 0% 20% 40% 60%

0 80%

Intermittentgenerationshare
Note: Source: This graph combines the results of calculations of stable supply indicators, (residual) load duration curves and the intermittent generation adaptation cost merit order curve. Ecorys calculations with the adaptation cost model.

The policy implication of this analysis is that there are significantly increasing costs associated to the deployment of intermittent generation technologies in the EU-27, and in that sense limits to further deployment. If the cost of integrating intermittent generation was to be limited to about 25 billion EUR per year, no more than about 40% of intermittent generation can be integrated in the European power market. The final choice of an acceptable cost increase will be a political choice.

Assessment of Needed Share to Secure EU Electricity Supply until 2050

GW

Introduction

This report on the Assessment of the Required Share for a Stable EU Electricity Supply until 2050 aims at identifying the requirements and preconditions for reliable integration of large(-r) shares of intermittent generation from a balancing perspective into EU power systems over midand long-term future perspectives (2030 and 2050). This report includes a literature review (Task 1) on the role and integration of intermittent generation within the Energy Roadmap 2050 and prospective foresights of embedding (larger shares of) intermittent generation, given existing scenarios. However, the main activity carried out in this study is the construction of merit-order curves of flexibility measures to accommodate intermittent generation (Task 2). These are based on estimates of the extent of adaptation measures needed and their costs. These are presented graphically, with the share of stable supply and the balancing need shown as a function of the share of intermittent generation. Finally, the relationship between stable supply, net balancing need, share of intermittent generation cost and balancing cost has also been presented graphically (Task 3). Power system balancing will become increasingly important to securing a stable European energy supply. This will also become a significant challenge as the share of electricity generation from intermittent energy sources (e.g. wind and solar PV) increases. This will result in a cost-increasing merit order curve for adaptation to higher shares of intermittent generation, or increasing values for stable supply indicators. The main objective of this study is to show, in a quantitative way/approach, the limits of system stability (or required share of stable supply) under various future shares of intermittent power generation.

1.1

The European Energy Strategy

Energy is what makes Europe tick. 1 Therefore, it is essential that the EU tackles the (major) energy challenges (i.e. climate change, affordability of energy, stable supply). In response to these challenges, the EU has put in place an ambitious energy policy, covering the whole lifecycle of energy generation and from different sources. It is tailored to different policy initiatives and strategies to stimulate the transition to a low-energy economy, whilst the energy that is consumed becomes more sustainable, competitive and secure. According to the current Commissioner for Energy, Gnther Oettinger, the energy challenge is recognized as one of the greatest tests faced by Europe today. In particular, rising energy prices and increasing dependency on energy imports, jeopardise Europe's economic competitiveness, raising the risk of gradual deindustrialisation. On 10 November 2010, the European Commission adopted the Communication on Energy 2020 A strategy for competitive, sustainable and secure energy which sets the priorities in the field of energy for the next 10 years, including the actions needed for tackling the challenges of: the achievement of an (energy) market with competitive prices, realising potential energy savings,

See for instance: http://europa.eu/legislation_summaries/energy/index_en.htm

Assessment of Needed Share for Stable EU Electricity Supply until 2050

supporting further technological improvements and securing energy supplies. The identified priorities and the formulated actions are related to: 2 The achievement of an energy-efficient Europe; The building of a Pan-European integrated energy market; The achievement of the highest level of safety and security and empowering consumers; Extending Europes leadership in energy technology and innovation; The strengthening of the external dimension of the EU energy market.

On the basis of these priorities, DG Energy is preparing concrete, legislative initiatives and proposals which will fit into the energy agenda for 2020 (and 2050). Meanwhile, (energy) policy initiatives have been drafted towards an EU energy infrastructure, 3 energy efficiency within the EU 4 and smart grids. 5 However, the latest initiative and the reason for conducting this study is the (on-going) process of preparing the EU Energy Roadmap 2050. The EU Energy Roadmap 2050 The Commission Services are establishing different roadmaps (e.g. DG CLIMA Roadmap for moving to a competitive low-carbon economy in 2050 (published in 03/2011) and the DG ENV Roadmap on Resource Efficiency (published in 09/2011)) as a focused and tailored follow-up and path-way of the Roadmap for a Low-Carbon Economy by 2050. This latter roadmap focuses on reductions in greenhouse gas (GHG) emissions across the EU economy and in the context of the targets set by the European Council to reduce GHG emission levels by 80-95% (95% in the power sector) by 2050 with reference to 1990 emission levels. In particular, the European Council has recognised that, in order achieve these targets, a true revolution is needed in the way that energy is generated and provided to customers. Therefore, DG Energy is working on an EU Energy 2050 strategy which will provide (mid- and) long-term actions, based upon the overall framework of the Europe 2020 strategy. As such, the EU Energy Roadmap 2050 (planned to be published in 11/2011) will be driven by the need for energy security, sustainability and competitiveness given the changing global energy context. The mission of the EU Energy Roadmap 2050 is to provide a practical, independent and objective analysis of pathways to achieve a low-carbon economy in Europe, in line with the energy security, environmental and economic goals of the European Union. This is consistent with the established objectives of EU energy policy sustainability, energy security and competitiveness with a focus on cost-effective decarbonisation. After the publication of the EU Energy Roadmap 2050, clear sectoral targets could be proposed for the mid-term (e.g. 2030) and long-term perspectives (2050 and beyond). In this context, stable supply is an important topic, which includes the important aspect of overall system stability under conditions of future integration of high shares of intermittent generation. The main objective of this study is to quantify the overall limits of energy system and thus supply stability under the likely conditions of significantly increased future shares of generation from intermittent sources. 6
2

European Union (2010), Energy 2020 A Strategy for Competitive, Sustainable and Secure Energy, European Commission Directorate-General Energy, November 2010, Brussels European Union (2011), Energy Infrastructure Priorities for 2020 and beyond, a blueprint for an integrated European Energy Network, European Commission Directorate-General Energy, Brussels European Union (2011), Energy Efficiency Plan 2011, COM (2011) 109, European Commission Directorate-General Energy, March 2011, Brussels European Union (2011), Smart Grids: from innovation to deployment, COM (2011) 202, European Commission Directorate-General Energy, April 2011, Brussels European Union (2011), Background Paper: Energy Roadmap 2050 State of Play, Background document to the EU Informal Meeting of Energy Ministers, European Commission Directorate-General Energy, May 2011, Brussels

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Assessment of Needed Share for Stable EU Electricity Supply until 2050

1.2

Objectives and Output of this Study

The general objective of this study is to assess the required share for stable EU electricity supply until 2050 (and on the mid-term 2030), given the increasing shares of intermittent generation to be integrated into the power system. The following methods were used: Review of literature and data for intermittent generation and existing (long-term) scenarios; Compilation of a reliable and comparable set of scenarios for the assessment; Constructing merit-order curves for the scenarios on adaptation costs to increasing shares of intermittent generation; Assessment of intermittent generation and balancing costs, balancing needs and stable supply. The study generated the following outputs: 1. Literature and data review of intermittent generation and existing scenarios; 2. Assessment of costs related to increasing shares of intermittent generation; 3. Assessment of stable supply by developing quantifiable indicators of the two different aspects of stable supply, namely a. Share of flexible supply (generation units which can be ramped up and down quickly to respond to intermittent supply and demand variations); b. The balancing need (which measures the needed flexibility of the power system as the difference between peak and off-peak residual (demand net of intermittent generation)).

1.3

Structure of this Report

The remaining Chapters of this Final Report are organized as follows: Chapter 2 presents the literature and data review (Task 1) on the integration of intermittent generation and the existing scenarios; Chapter 3 contains the methodology and approach for estimating the costs of intermittent generation integration (Task 2) and estimating the balance of stable supply (Task 3); Chapter 4 comprises the results and assessment of the quantitative and qualitative outputs of Task 2 and Task 3, including a comparison between and conclusions following the different scenario results.

Assessment of Needed Share for Stable EU Electricity Supply until 2050

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Background and Literature Review

In this chapter, electricity generation from intermittent sources (and its integration into the energy infrastructure) is described and a synthesis of the relevant data and literature, including literature on existing scenarios on intermittent generation integration, is provided. The first section presents the general approach for conducting this literature and data review (Task 1). The second section describes the background of the integration of intermittent generation, and the third section elaborates on existing scenarios on this matter.

2.1

General Approach
The purpose of this study is to assess the required share for a stable EU electricity supply until 2050 (and the mid-term 2030). This means that the proper context needs to be analysed in relation to the EU Energy Roadmap 2050. Therefore, it is important to first review what information and data on intermittent generation is available/published, and which scenarios have been prepared to assess intermittent generation and its integration into the energy infrastructure. Thus, the starting point for the study (Task 1) is to undertake an inventory of (publicly) available information on possible scenarios of an EU power system until 2050. Figure 1 illustrates which components/activities have been carried out, and their accompanying outputs.
Figure 1 - Description of Task 1

The following sections provide a synthesis of the literature (and other information sources) related to intermittent generation, in particular in relation to infrastructure integration. It also details the different (existing) scenarios - where intermittent generation is included - relevant for the derived adaptation cost model in Task 2.

2.2

Europes Energy Infrastructure

The Energy Policy for Europe, agreed by the European Council in March 2007, establishes energy security, sustainability and competitiveness as its key energy policy objectives. These key objectives include the completion of the internal EU energy market, and that renewable energy sources (RES) should contribute (at least) 20% to our final energy consumption by 2020. 7 In that

European Union (2011), Energy Infrastructure Priorities for 2020 and beyond, a blueprint for an integrated European Energy Network, European Commission Directorate-General Energy, Brussels

Assessment of Needed Share for Stable EU Electricity Supply until 2050

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respect, adequate, reliable and integrated energy networks are a prerequisite to achieve the EUs energy policy goals, as well as for the EUs economic strategy. Developing an integrated energy infrastructure policy will contribute to a properly functioning internal market, enhance energy security and enable the integration of intermittent generation. Therefore, a new EU energy infrastructure policy is needed to coordinate and optimise development and investment in the energy network within Europe. This is needed to avoid increasing costs, resulting from the existing out-dated and poorly interconnected energy infrastructure. 8 As a response, DG Energy has defined some priorities for the mid- and long-term to prepare the energy infrastructure for the 21st century, as part of moves to a new European energy infrastructure policy. The ten-year network development plan (TYNDP) forms the basis to set these priorities to secure the EU electricity supply. However, it does not take into account investments in new offshore generation capacities in the North Sea area and does not take into account ensured timely implementation of cross-border interconnections. Therefore, the following priority corridors have been proposed to make Europes electricity grids fit for 2020: 9 Offshore grid in the North Sea area and connection to Northern and Central Europe to integrate and connect electricity generation facilities in the North Sea; Interconnections in South Western Europe to accommodate renewable electricity generation, in particular between France and the Iberian Peninsula; Connections in Central Eastern and South Eastern Europe to strengthen regional networks in North-South and East-West power flow directions; Completion of the BEMIP (Baltic Energy Market Interconnection Plan) to integrate the Baltic States into the European market through reinforcement of internal networks and strengthened interconnections with neighbouring countries. Besides the priority corridors for the EUs electricity grids, the European energy infrastructure strategy 2020 also sets out other priorities. Another priority is to roll-out smart grid technologies by providing the necessary framework, including initial incentives for rapid investments in new intelligent energy networks. Such a framework is important for a well-functioning market for energy services that stimulates energy savings and efficiency in a competitive retail market, and is also important for the promotion of the integration of intermittent generation to the energy grid system. Interconnected smart grids (or super grids) can transmit large amounts of (intermittent) renewable energy sources and allow for the decommissioning of older electricity generation sources. 10 Therefore, DG Energy will assess the need to implement additional legislation to keep smart grid implementation on track and will set up a platform for dissemination of the most up-to-date experiences and good practices concerning their deployment across Europe. Besides the necessity to invest in and develop further the energy network for a stable European energy supply, an expanded European grid can help to cope with intermittency challenges as these are becoming increasingly significant on a national scale. On a local scale, storage capacity solutions are typically considered, as these can compensate for intermittency of electricity and

10

European Union (2011), Energy Infrastructure Priorities for 2020 and beyond, a blueprint for an integrated European Energy Network, European Commission Directorate-General Energy, Brussels European Union (2011), Energy Infrastructure Priorities for 2020 and beyond, a blueprint for an integrated European Energy Network, European Commission Directorate-General Energy, Brussels EREC (2009), [R]enewables 24/7 Infrastructure needed to save the climate, European Renewable Energy Council and Greenpeace, November 2009, Brussels

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Assessment of Needed Share for Stable EU Electricity Supply until 2050

reduce the need for renewable electricity curtailment. 11 The most cost-effective solution is to expand an inter-regional grid system across Europe which is part of the Commissions Blueprint for an Integrated European Energy Network. In order to successfully operate a European electricity transmission grid, developments in the following areas would be needed 12: 1. Planning and development of a European grid to ensure that investments in capacity to transmit generated electricity are made correctly and where they are needed; 2. Physical and market aspects of the (successful) operation of a European grid for maximising the (economic) benefits which can be achieved by the infrastructure; 3. Development of transmission technologies such that effective options for environmental, energy efficiency and investment considerations are available. The network developments listed above (or, in other words, investments in high voltage assets) have induced impacts on the Transmission System Operators (TSOs), particularly through changes to the legal and regulatory framework. 13 TSOs should support the (new) EU energy infrastructure policy by means of increasing market integration and the connection of higher shares of intermittent generation, while maintaining a desired level of power system security. Furthermore, the TSOs will have to deal with an increasing number of uncertainties and a (more) complex global legal and regulatory framework (e.g. permitting procedures). Importantly, TSOs also still have to secure the financial means to finance and build the network developments on schedule. Achieving a stable and secure demand-supply balance will be a challenging task for TSOs. This has become more and more important due to the increased role of variable electricity sources, like intermittent generation. 14 Electricity from renewable energy sources is expected to play a bigger role in achieving the demand-supply balance given the potential large scale introduction of, for example, direct electrical heating in low-carbon/energy houses, heat pumps and electric cars that will ask for controllable load and storage capacities. In that respect, this is an important challenge to secure a stable demand-supply balance. Moreover, the (proper) integration of intermittent generation will play a key role in safeguarding a stable electricity supply within Europe over a longer term.

2.3

Integration of Intermittent Electricity Generation

Europe is facing several major energy challenges, including the depletion of indigenous energy sources, increasing fuel costs and the threat of energy supply disruptions. At the same time, it also recognises the need to reduce GHG emissions and, consequently, the consumption of fossil fuel generated electricity. In this respect electricity generated from nuclear (can) play(s) a key role. 15 Over the next 10-15 years, 332 GW of new electricity capacity 42% of the current capacity in the EU needs to be built to replace ageing power plants, to satisfy increasing energy consumption

11

12

13

14

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ECF (2010), Roadmap 2050 Practical guide to a prosperous, low-carbon Europe Technical Analysis, European Climate Foundation, Volume 1 2010, Brussels EASAC (2009), Transforming Europes Electricity supply An Infrastructure Strategy for a reliable, renewable and secure power system, European Academies Science Advisory Council, EASAC Policy Report 11, Cardiff ENTSOE (2010), Ten-Year Network Development Plan 2010-2020, European Network of Transmission System Operators for Electricity, June 2010, Brussels EASAC (2009), Transforming Europes Electricity supply An Infrastructure Strategy for a reliable, renewable and secure power system, European Academies Science Advisory Council, EASAC Policy Report 11, Cardiff NEI (2007), Nuclear Energy: A Key tool in reducing Greenhouse Gas Emissions, Nuclear Energy Institute, Policy Brief, Washington

Assessment of Needed Share for Stable EU Electricity Supply until 2050

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and to achieve the energy targets for 2020.

16

Directive 2009/28/EC on renewable energy

implementation aims to increase the share of electricity generated from renewables in the EU-27 from 8.6% in 2005 to 20% by 2020. In 2007, the share of renewable energy sources increased to 9.9%. However, at that pace (0.65% per year), only a share of 18.35% would be reached by 2020. Hence, in order to be able to fully deploy renewable energy sources, some (non-cost) barriers need to be removed, like administrative hurdles and barriers to grid connection. 17 In particular, there is a clear need to support the integration of energy from intermittent generation into the transmission and distribution grid, this can involve greater use of energy storage systems. 18 Moreover, in the intermediate term to 2030 (but more important for the longer term to 2050), significant increases of supply can be achieved by electricity generated from intermittent sources. 19 Electricity generated from intermittent sources has high potential in the European energy mix (in excess of 30%) when new grid infrastructure technologies and operational approaches are in place. 20,21 Successfully doing this is dependent on the Commissions priorities for an integrated EU energy infrastructure being properly implemented and adopted, To meet the targets of Directive 2009/28/EC regarding the intermittent generation shares in the energy mix, additional network capacity is needed in particular for electricity generated via onshore wind. Of all the renewable electricity generating technologies onshore wind is the largest contributor to total installed capacity. As such, the role of onshore wind will be crucial for achieving the 34% share of RES needed by 2020 22. In 2010, natural gas was the largest contributor of new generation capacity (51% or 28 GW), followed by PV (22% or 12.3 GW) and wind (16.7%, or 9.3 GW). 23 Along with the increase in onshore wind power generation (and RES in general), comes an increasing need to improve the energy infrastructure to ensure an efficient accommodation of this new intermittent generation
24

Electricity generated by weather-dependent intermittent sources (e.g.

wind, solar) cannot be stored at a large scale in an economically viable way and has to be produced in real time to follow consumption. Beyond a certain share of installed capacity, intermittent generation technologies, like solar and, especially, wind, pose a significant challenge for real time power system balancing, where, in addition to demand side variation, there is also supply side variation. 25 There are various ways to balance demand and supply in the case of a mix with high shares of intermittent generation. These include additional backup generation capacity, additional transmission capacity and smart grids (as discussed above). Therefore, changes in network

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19 20

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23 24

25

EWEA (2009), Pure Power Wind energy targets for 2020 and 2030, European Wind Energy Associations, November 2009, Brussels Ecorys et al (2008), Assessment of non-cost barriers to renewable energy growth in EU Member States AEON, Commissioned by European Commission Directorate-General+ Transport and Energy, May 2010, Rotterdam European Union (2009), Directive 2009/28/EC on the promotion of the use of energy from renewable sources and amending and subsequently repealing Directives 2001/77/EC and 2003/30/EC, European Commission DirectorateGeneral Trans and Energy, Brussels IEA (2011), Harnessing Variable Renewables A Guide to the Balancing Challenge, Hugo Chandles, August 2011, Paris DLR (2008), Renewable energy deployment potentials in large economies, REN21 Renewable Energy Policy Network for the 21st Century, April 2008, Stuttgart Ecofys (2008), Global potential of renewable energy sources: a literature assessment Background report, REN21 Renewable Energy Policy Network for the 21st Century, March 2008, Utrecht EWEA (2009), Pure Power Wind energy targets for 2020 and 2030, European Wind Energy Associations, November 2009, Brussels http://www.icis.com/heren/articles/2011/01/31/9430970/eus-renewable-growth-falls-short-in-2010.html EWIS (2010), Towards a successful integration of large scale wind power into European Electricity grids, European Wind Integration Study, March 2010, Brussels ENTSOE (2011), Scenario Outlook and System Adequacy Forecast 2011-2025, European Network of Transmission System Operators for Electricity, February 2011, Brussels

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Assessment of Needed Share for Stable EU Electricity Supply until 2050

infrastructure and operation, including clear and transparent energy policy guidelines, are critical since this will create the option to deliver the decarbonisation of the energy supply securely and affordably through a range of generation mixes, including those involving high levels of intermittent generation. For example, It is estimated in the Energy Roadmap 2050, that an extension of up to 170 GW new transmission capacities will be needed for this purpose, in which the role of smart grids (or super grids) will become increasingly important to cushion local intermittency so that (some part of) demand and supply can be balanced in a decentralised manner.

2.4

Existing Scenarios on Intermittent Electricity Generation Integration

An inventory has been undertaken of (publicly) available information on possible scenarios for the development of EU power system and infrastructure to 2050 in order to conduct the quantitative assessment of the costs of intermittent generation integration and stable supply. The most relevant, and comparable, existing scenarios for the intermediate (2030) and long (2050) term on different shares of intermittent generation in the EU energy mix and integration are: Pathways from the Energy Roadmap 2050 study of the European Climate Foundation (four scenarios); 26 Scenarios from the on-going IRENE-40 project in Europe (five scenarios); Scenarios from the Power Choices study of Eurelectric (two scenarios) 28.
27

These existing scenarios are interesting and relevant as they rely on some common grounds in terms of data and information sources, which are: a. The PRIMES baseline (2009) scenario for installed capacity and demand; b. The (obviously for the latter one) scenarios of Eurelectrics Power Choices study; c. The (draft) ten-year development plan (TYNDP) of ENTSO-E, on which the 2050 extrapolations of energy infrastructure developments are based. Each of these above mentioned scenarios will be discussed briefly in the following sections: 2.4.1 Eurelectric Power Choices study Eurelectric has developed its own electricity scenarios for development of the European power sector using the PRIMES model. The Power Choices study presents two scenarios for the electricity sector in the EU to 2050: 1. A baseline projection or Baseline 2009 scenario, and; 2. The more ambitious (in terms of emission reductions) Power Choices scenario. The Baseline 2009 scenario shows the projected electricity trends assuming that all existing relevant EU policies affecting European electricity demand and supply are implemented in the Member States. The Power Choices scenario explores the technical developments and policy changes necessary to reduce greenhouse gas (GHG) emissions by 75% by 2050. The Eurelectric Baseline 2009 scenario provides an intermediate projection of the development of the European electricity sector to 2050, reflecting existing trends and policies. The European Emissions Trading Scheme (EU ETS) determines the carbon emission reduction to 2020, after which the trend
26

27

28

ECF (2010), Roadmap 2050 Practical guide to a prosperous, low-carbon Europe Technical Analysis, European Climate Foundation, Volume 1 2010, Brussels IRENE-40 (2011), Internal Report Task 2.3: Scenario Synthesis, FP7 research programme, Energy research Centre of the Netherlands (ECN), commissioned by the European Commission DG Energy, Brussels Eurelectric (2009), Power Choices Pathways to Carbon-Neutral Electricity in Europe by 2050, Full Report, Union of the Electricity Industry, November 2009, Brussels

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17

continues linearly (-1.74% per year). Nuclear energy policies remain unchanged in the Baseline 2009, so the expected phase-outs in Germany and Belgium take place as planned. Consequently, the carbon intensity of the electricity sector declines by 40% to 2050 through energy efficiency measures and deployment of renewable energy sources. Electricity use for road transport remains limited. The scenario indicates that electricity generation from intermittent generation grows strongly. For instance, wind power generation increases from 161 TWh in 2010 to 967 TWh in 2050 to account for almost half of all renewable electricity generation by 2050. 29 2.4.2 European Climate Foundation Energy Roadmap 2050 study The on-going ECF study Energy Roadmap 2050 introduces and compares four pathways to reach a reduction of at least 80% greenhouse gas (GHG) emissions with respect to 1990 levels by 2050. Hence, the ECF study is somewhat more ambitious than the Eurelectric study. This target translates into a reduction of at least 95% of GHG emissions in the power sector by 2050. The ECF study is based on a baseline, where the 80% GHG reduction target is not met and three alternative options/outcomes with different shares of RES generation. This leads to the following results: Baseline: 34% RES, 49% Coal/Gas, 17% nuclear; 40% RES, 30% CCS, 30% nuclear; 60% RES, 20% CCS, 20% nuclear; 80% RES, 10% CCS, 10% nuclear.

The 100% RES pathway is also mentioned, but this pathway is not analysed in the same level of detail as the 4080% RES pathways. There is a notably large role of solar PV, which varies from 195 GW (40% RES) to 815 GW (80% RES) by 2050. The ECF study estimates for these 80% GHG reduction scenarios the needs in terms of transmission capacity (50165 GW), back-up capacity (70255 GW), demand response (020%), and RES curtailment (13%). The ECF scenarios provide an estimate of grid expansion needs, namely 50165 GW until 2050 at a cost of 50200 billion over 40 years (35% of cost to the power sector) to reach the 80% GHG reduction target. 2.4.3 IRENE-40 FP7 study Another set of scenarios have been formulated within the on-going IRENE-40 project 30 of which an in-depth preliminary quantitative database has been made available to this project, namely hourly residual demand curves (demand minus intermittent generation) for the EU27 plus Norway and Switzerland. This data gives a good overview of demand and supply under different scenarios, but does not formulate the needed network solutions for which additional model analysis would be required. For instance, under high growth scenarios a new super-grid may have to be added to the existing grid to optimally balance demand and supply. These scenarios are close to the ECF (Energy Roadmap 2050) pathways and also close to the Eurelectric scenarios. Five scenarios are formulated in the IRENE-40 project, namely a businessas-usual (BAU) scenario, where the 80% (95% for the power sector) GHG reduction will not be achieved and four alternatives to achieving the 80% GHG reduction by 2050. These scenarios differ in the demand growth and the technology mix.

29

30

Ecorys et al (2010), Investment Needs for future adaptation measures in EU nuclear power plants and other Electricity generation technologies due to effects of climate change, Commissioned by: European Commission DG Energy, December 2010, Rotterdam See http://www.irene-40.eu/

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Assessment of Needed Share for Stable EU Electricity Supply until 2050

The following scenarios have been considered and employed in this study from the IRENE-40 project: BAU has 30% demand growth with respect to 2010 Energy Efficiency (EE) has 10% demand growth with respect to 2010, due to high effort on energy efficiency Three high demand growth scenarios namely with 50% demand growth with respect to 2010: RES where a high level of RES will be realised within Europe by 2050 DESERTEC where a high level of RES will be imported from North Africa by 2050 CCS in combination with a high level of fossil fuels will be realised by 2050

2.4.4 Comparison between Different Sets of Scenarios Table 1 presents an overview, for each of the three information sources (ECF, Eurelectric and IRENE-40), of the scenarios selected to be taken for the assessments of costs of intermittent generation integration and the accompanied balance of stable supply.
Table 1 - Equivalence between three sets of scenarios

IRENE-40
BAU CCS Energy Efficiency RES; DESERTEC

ECF
Baseline 40% RES 60% RES 80% RES

Eurelectric
Baseline 2009 Power Choices

The comparison in Table 1 shows that the IRENE-40 BAU scenario is quite close to Eurelectrics Baseline 2009 but also to the ECF Baseline in terms of demand growth. These three scenarios all envision that the current (policy) trends continue, and a substantial reduction in greenhouse gas emissions will not be achieved. The IRENE-40 CCS scenario is close to the Eurelectric Power Choices scenario and the ECF 40% RES scenario, in terms of the RES share. The energy efficiency (EE) scenario is a new scenario, with a substantially lower demand for electricity as compared to all ECF pathways and Eurelectric scenarios. Nevertheless, this scenario is close to the ECF 60% RES scenario in terms of RES share. Finally, IRENE-40 RES and DESERTEC are the closest to the ECF 80% RES scenario in terms of RES share. Figure 2 compares the scenarios in terms of demand growth, showing that the scenarios are all quite close to each other.

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19

Figure 2 - Energy demand projections under different scenarios

TWh 5000 4800 4600 4400 4200 4000 3800 3600 3400 3200 3000

EurelectricBaseline2009 EurelectricPowerChoices IRENE40BAU IRENE40Efficiency IRENE40other ECFBaseline ECFother

2010

2020

2030

2040

2050

Drivers of these scenarios are the transition from national to regional planning. For example, new German coal power plants to be located in the Netherlands. Also the consequences of the phase out of nuclear energy in Germany will be a driver. Furthermore, more power plants are expected to be constructed along the coast for easier access to cooling water, increasing the grid investment costs. The high RES scenarios will be especially challenging as they need more balancing effort, infrastructure and more reserve capacity. New (coal) power plant technologies are under development that can be ramped up and down more economically. This could partially assist in meeting the balancing need. However, these new coal technologies are not further considered in this study, due to the uncertainty of their development.

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Assessment of Needed Share for Stable EU Electricity Supply until 2050

Quantification of Integration of Electricity Generated by Intermittent Sources

In this chapter we elaborate on the methodology to quantify intermittent generation integration. In particular, details of the methodologies developed for the quantification of the costs of intermittent generation integration and the quantification of stable supply are provided. The first section presents the general approach for conducting these quantifications (Task 2 and Task 3). The second section describes how the selection process of the scenarios (from Task 1) is taken into account. Section 3 describes the methodology for the construction of the adaptation cost model that is used for estimating the costs of intermittent generation integration given different share(s) of integration in the energy infrastructure. The final section deals with the issue of stable supply.

3.1

General Approach
The purpose of this study is to assess the share of stable EU electricity supply required until 2050 (and the mid-term 2030), given increasing shares of intermittent generation to be integrated into the grid. After the extensive literature review, data gathering and scenario inventory, the next phase analyses the relationship between network adaptation costs and increasing shares of intermittent generation, and the relationship between stable supply and increasing shares of intermittent generation. This provides an estimate of the costs to construct a merit order of adaptation measures to accommodate intermittent generation (Task 2) and to estimate stable supply (Task 3). Figure 3 illustrates which components/activities were carried out, and what the accompanying outputs are.
Figure 3 - Description of Task 2 and Task 3

The following sections elaborate on the process for selecting the relevant scenarios taken into account in the adaptation cost model, presents how this adaptation cost model has been constructed and discusses how stable supply has been quantified.

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21

3.2

Selected Scenarios on Intermittent Generation Integration

The scenarios, as presented in section 2.4, vary considerably in the terms of the availability of useful quantitative information. For the three data sources (Eurelectric, ECF, IRENE-40) the level of quantitative detail for IRENE-40 is far greater than the level of detail of the Eurelectric and ECF scenarios. In particular, hourly load data and hourly intermittent generation data is available from IRENE-40. This makes this the most appropriate set of scenarios to use in this study. Moreover, we also established many commonalities among these scenarios as shown previously in Table 1. Including how the IRENE-40 scenarios relate to the more mainstream scenarios, which is important to build confidence in the reliability of the results of this study. Therefore, the database of the ongoing IRENE-40 project will form the basis in the adaptation cost model. Since the main objective of this study is to analyze the impact of increasing shares of intermittent generation, the IRENE-40 RES scenario emerges as the most interesting case. Since the IRENE40 RES scenario presents a future with the largest shares of intermittent electricity generation (75%) among all IRENE-40 scenarios, the IRENE-40 RES scenario can show the impact of the largest imaginable shares of intermittent generation, which is important for this study. Therefore, the data of the RES scenario of IRENE-40 has been studied in detail and is later compared to the results of the other scenarios to validate them. In this way it was possible to quantify the required amount of stable supply and adaptation cost under increasing shares of intermittent generation. As a sensitivity analysis, some of the graphs were also produced for other scenarios - these are presented in the Annexes to this report. Considering the data limitations all Eurelectric and IRENE40 scenarios (in addition to the RES scenario) are applied to the correlation between the share of flexible supply and the share of intermittent generation. Furthermore, all IRENE-40 scenarios (in addition to the RES scenario) are applied to correlation between the balancing need and the share of intermittent generation. In the latter case, Eurelectric scenarios could not be used due to the lack of residual hourly demand data. In addition, the EU-27 has been disaggregated into nine European regions, following the ECF 2050 Energy Roadmap. On the one hand, it is not logical to speak about country-level power system characteristics in 2050 (and 2030), because of the ongoing process of cross border market integration. Equally, it is not useful to show EU-27 wide aggregates, as this would hide regional differences. To strike a compromise between these two extremes, data is presented for the nine regions as presented in Figure 4.

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Assessment of Needed Share for Stable EU Electricity Supply until 2050

Figure 4 - Regional division of EU-27

NO

UK DE FR IT IB CE SE PL

Nine Grid regions: IB Iberia FR France UK UK + IE DE BeNeLux + DE NO Nordic PL Baltic + PL SE South East IT IT + MT CE Central

Source: Follows the same regionalisation as used in the ECF 2050 Energy Roadmap.

3.3

Estimating Costs of Integration of Electricity Generated by Intermittent Sources

In order to quantify the costs of integrating electricity generated from intermittent sources an Adaptation Cost Model (ACM) was developed to analyse the flexibility measures needed to accommodate varying shares of intermittent generation to the EU power system in 2050. The adaptation cost model is based on the following steps: 1. Derivation of the yearly peak and off-peak from the residual load duration curves (which is the normal load duration curve minus intermittent generation (defined in this study as the total sum of wind and solar PV)). 2. Derivation of the amount of flexible supply (defined in this study as the total sum of hydro, gas and oil) and the amount of intermittent generation, over total installed capacity. 3. Division of EU-27 into nine regions for two years (2030 and 2050) to obtain reliable data for (v1) intermittent generation, (v2) balancing need (defined in this study as the difference between peak and off-peak over peak) and (v3) flexible supply. 4. Establishing the link between intermittent generation with balancing need (e1) and intermittent generation with flexible supply (e2) through two regression equations. 5. Based on an amount for the yearly peak for EU-27 (700 GW), the yearly off-peak can be calculated through a derived regression equation between balancing need and intermittent generation (e1).

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23

6. The gross balancing need is defined as the difference between peak and off-peak electricity demand (in GWs). The term balancing is used here to stress the importance of balancing demand and generation. 31 7. The amount of stable supply follows from the derived regression equation between flexible supply and intermittent generation (e2). 8. The net balancing need is defined as the gross balancing need minus stable supply. The value is non-negative, where a negative value means that there is no net balancing need. 9. In order to meet the net balancing need, abatement options and costs are derived, enabling calculation of a merit order curve for intermittent generation integration into the grid. 10. For comparison, the intermittent generation cost is also calculated, defined as the cost per installed capacity (expressed in /kW/year), accounting for all capital and operational costs. 11. These steps when performed for increasing shares of intermittent generation lead to a curve for balancing cost. Stable supply, net balancing need, intermittent generation cost and balancing cost can all be presented in one graph to complete the adaptation cost model. This adaptation cost model has been used to construct a merit order curve of flexibility measures and an analysis has been undertaken in the next chapters to draw key lessons and valuable inputs for the Energy Roadmap 2050.

3.4

Estimating Stable Supply versus Intermittent Generation Integration

This study also presents the link between flexible supply i.e. power produced by energy sources which are sufficiently flexible to follow (sudden) changes in residual demand (vertical axis) and the share of intermittent generation (horizontal axis). This data has been derived for the scenarios as suggested in section 3.2 on residual demand development and the shares of intermittent generation. In order to quantify stable supply and share of intermittent generation, data on installed capacity, hourly demand curves, hourly intermittent generation and the resulting residual demand curve for the RES scenario in IRENE-40, have been employed. This was the scenario for which we had the most detailed data and which has the highest shares of intermittent generation, for that reason it was the most interesting IRENE-40 scenario to study the possible impact of high shares of intermittent generation. One single indicator for share of intermittent generation will be used throughout the analysis: Intermittent generation share: This is a metric that shows the share of intermittent generation (Solar PV, Wind on- and offshore) 32 of total installed capacity. These technologies are assumed to be completely inflexible, i.e. that their generation fully follows weather patterns (solar intensity and wind speeds) and does not follow changes in demand. Addition of intermittent generation will typically make system balancing more challenging. Two possible ways of measuring stable supply have been derived from the available data. These reflect two different and complementary aspects of stable supply, namely:

31

32

An alternative formulation would be load-following needs. The actual balancing market has a much more limited scope and is assumed by market volume which is much smaller than the load following needs. Other RES technologies are excluded as they can be tuned to have at least a constant level of output to function as a baseload generation. For instance, Solar CSP can still generate power after sunset and can therefore time its output, this is not considered in this study as intermittent generation. Moreover, biomass is considered by ECF as lowly flexible, as it is a dedicated generation technology, only providing baseload.

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Assessment of Needed Share for Stable EU Electricity Supply until 2050

Flexible supply: This is a metric that shows the share of flexible supply (hydro, gas and oil) of the total installed capacity (expressed as a percentage of total installed capacity). These technologies are assumed to be sufficiently flexible in ramping up and down to meet sudden fluctuations in demand due to intermittent generation. The ECF Energy Roadmap 2050 even goes as far as to derive a flexibility merit order, where hydro is considered most flexible followed by gas. 33 In addition, coal and nuclear can also be demand following, albeit at a much slower rate, and this is generally only performed in a planned manner to follow slowly changing seasonal demand changes or expected within a day demand changes. However, these technologies are assumed to not be capable of responding to sudden and unexpected changes in the power system due to intermittent generation and are therefore excluded from flexible supply. Balancing need: This is a metric that shows the difference between peak and off-peak on the residual demand curve (demand minus intermittent generation) and is weighed by peak demand (this leads to a non-negative ratio varying between 0.5 and 2.2). The higher the ratio, the more challenging it will be to balance intermittent generation locally (in a national market), because of the fluctuations in demand. A value below one denotes a positive off-peak, whereas a value above one denotes a negative off-peak. The latter is possible in the residual demand curve, under high levels of intermittent generation.

33

Note that hydro is considered by ECF the most ideal source for balancing supply, as it can react most quickly to sudden changes in the power system due to intermittent generation. Hence the time scale use here is real time power system adaptability.

Assessment of Needed Share for Stable EU Electricity Supply until 2050

25

Results and Assessment

This chapter presents the results based on the methodology as set out in Chapter 3 cf. the quantification of intermittent generation integration. It consists of the following four steps: 1. The need for stable supply is outlined by the (residual) load duration curve and hourly (residual) loads for EU-27; 2. The costs for intermittent generation and abatement for the additional balancing need are estimated; 3. Two indicators for stable supply are presented: flexible supply and balancing need; 4. These are combined into a model to derive the required stable supply, net balancing need and the merit order curve representing the balancing cost. This is presented in a simple graph.

4.1

Assessment of the Balancing Need due to higher shares of Intermittent Generation

In order to outline the challenge for integrating increasing shares of intermittent generation, two graphs are presented, Figure 5 and Figure 6. The figures contain the classical load duration curve and the residual load duration curve (based on hourly loads minus intermittent generation as defined in section 3.4). Figure 5 and Figure 6 show both the load duration curve and the residual load duration curve for EU27 in 2030 and 2050, comparing original demand and residual demand (both based on the RES scenario (IRENE-40, 2011)). Hence, the positive impact of transmission capacity (or grids) is already factored in. The figures show that an increase in intermittent generation reduces the share in base-load generation. This is a relatively small decrease in 2030, but base-load nearly vanishes by 2050. Intermittent generation, following weather patterns, often peaks during low demand hours, which further increases the need for power system adaptation. Off-peak demand can be cushioned by demand response, storage inflow and RES curtailment, whereas peak demand can be cushioned by demand response, storage outflow and back-up units. The remaining variation in demand needs to be met by ramping up and down of conventional and sufficiently flexible power plants.

Assessment of Needed Share for Stable EU Electricity Supply until 2050

27

Figure 5 - The challenge for balancing due to higher shares of intermittent generation in 2030: (residual load duration curve)

700000 (MW) 600000 500000 400000 300000 200000 100000 0 1

Rampup/downof powerplants

2030

Originalloaddurationcurve Residualloaddurationcurve

Intermittentgeneration

Demandresponse Fromstorage Backupunits 1001 2001 3001

Baseload generation
4001 5001

Demandresponse Tostorage REScurtailment 6001 7001 8001 (h)

Source: IRENE-40 RES scenario and Ecorys calculations.

Figure 6 - The challenge for balancing due to higher shares of intermittent generation in 2050: (residual load duration curve)

1000000 (MW) 800000 600000 400000 200000

Rampup/downof powerplants

2050

Originalloaddurationcurve Residualloaddurationcurve

Intermittentgeneration

Baseloadgeneration
0 200000 400000 1 Demandresponse Fromstorage Backupunits 1001 2001 3001 4001 5001 Demandresponse Tostorage REScurtailment 6001 7001 8001 (h)

Source: IRENE-40 RES scenario and Ecorys calculations.

To further illustrate the impact of intermittent generation, Figure 7 shows hourly load variation over the year for both normal and residual load (again based on the RES scenario (IRENE-40, 2011)). This shows the challenge of classical base-load technologies even better, where except for the winter, all through the year more generation than demand can occur.

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Assessment of Needed Share for Stable EU Electricity Supply until 2050

Figure 7 - The challenge for balancing due to higher shares of intermittent generation in 2050: hourly load variation

1000000 (MW) 800000 600000 400000 200000 0 200000 400000 Jan Feb Mar Apr

2050

Originalloadcurve Residualloadcurve

(month) May Jun Jul Aug Sep Oct Nov Dec

Source: IRENE-40 RES scenario and Ecorys calculations.

Hence, ramping up/down of power plants could be considered as an important adaptation measure to deal with intermittent generation. This is the standard method of system balancing, where supply is scaled in such a way to follow the fluctuations in demand. The current state of technology is designed to follow the classical demand curve and will be of little help to accommodate more intermittent generation, as shown in Figure 7. For instance, it is not economical for coal fired power plants to be shut down on a daily basis, as it also reduces their lifetime. Minimum stable generation levels of power plants have to be respected. Also the ramp up/down times have to be taken into consideration, which may not respond quickly enough to maintain the required system quality. Section 4.4 quantifies these consequences in terms of adaptation or balancing needs and provides a best estimate of balancing costs for increasing shares of intermittent generation.

4.2

Adaptation to Higher Shares of Intermittent Generation and Cost Estimates

In order to estimate the costs of system adaptation to increasing intermittent generation shares, six adaptation measures are identified (in expected order of increasing cost): 34 1 Demand response: by shaving extreme peaks and off-peaks from the residual demand through demand response, possibly through agreements with large consumers like big industries, some intermittent generation can be accommodated. Applications of smart grids can also help to establish and optimise this. The consumer will consume less under peak demand and more under off-peak demand. 2 Interconnection capacity: An aggregated peak and off-peak is generally less extreme than the isolated peak and off-peak at country level (for instance the EU27 has a peak/offpeak ratio of 2.2, whereas at a country level this ratio can be as high as 4.4 in Slovenia). This adaptation measure is both helpful for reducing the peak and increasing the off-peak to reduce the gap between these two. 3 Storage capacity: This is the most flexible way to store at peak supply to meet peak demand, both on a daily or seasonal basis. However, costs are generally high, losses are

34

The recent study of IEA (2011) shows estimates of costs of intermittent RES integration to vary between 27 $/MWh for shares of up to 30%. Our study aims at estimating the cost of higher shares of intermittent generation integration.

Assessment of Needed Share for Stable EU Electricity Supply until 2050

29

typically around 30% and pumped-storage can only be developed at a limited number of suitable locations. This adaptation measure helps reduce the peak and increase the offpeak to close the gap between them. 4 Back-up capacity: This is the classical way of balancing the power system on a country level, by prescribing a minimum required reserve margin. However, this adaptation measure only helps to increase the production need under peak demand, as the reserve can only be ramped up during a sudden peak, when the demand drops suddenly, other measures will need to be taken. 5 Intermittent RES curtailment: If options 14 fail, it may be necessary to reduce the output of intermittent generation leading to RES curtailment to balance the power system. This adaptation measure is the counter measure to back-up capacity, namely to reduce the supply output in order to balance the power system. 35 6 Outage: The final solution is a temporary outage, often caused by an unpredictable situation in the power system. Although it is not economical to aim at complete avoidance of outages, as a quality prerequisite, it is important to keep outages below a certain level, Table 2 presents the assumptions used to derive an estimate of the adaptation costs for each of the measures. In addition, an estimate is given of the intermittent generation share that can be accommodated by each of the adaptation measures. The source and motivation of the cost estimate is given in the column entitled motivation.
Table 2 - Assumptions for the capital costs for adaptation to intermittent RES shares

Costs, /kW
1 2 3 4 5 6 Demand response Interconnection capacity Storage capacity Back-up capacity Intermittent RES curtailment Outage/load shedding 450 900 1,700 650 3,500 10,000

Abatable share
20% 20% 25% 27% 5% 3%

Source and motivation

Half of transmission capacity Based on ECF: 900 Euro/kW Assuming hydro as storage unit Assuming gas OCGT as back-up unit, without CCS About two times intermittent RES cost Large value, VoLL

Source: Based on ECF (2010d, 2010f), Mott MacDonald (2010) and Ecorys calculations.

The next step is to estimate the costs of adaptation measures based on levelised costs, where, in addition to capital costs, other (marginal) costs are also considered by taking the utilisation rate into account. This levelised cost approach is commonly applied to compare the costs of various generation technologies. Costs are built up from fuel costs, variable and fixed OPEX, CAPEX, CO2 costs and CCS (transport and storage) costs. Whereas back-up and storage capacity can be expressed in terms of generation technologies, it is also necessary to express the other adaptation measures in the same cost units. One source for these cost estimates is the ECF Energy Roadmap 2050 study, but the UK electricity generation cost update (Mott MacDonald, 2010) also provides useful information. In order to derive the fuel costs, projections are needed for oil price and CO2 costs for 2030 and 2050. These are provided in Table 3:

35

The capital costs of RES curtailment and outages are not easy to determine. For RES curtailment hardly any addtitionele investments are needed. RES curtailment could be considered a cost effective way to reduce the integration cost of intermittent generation. However, this would lead to political resistance due to high level of subsidies and priority access to the network which is being provided.

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Assessment of Needed Share for Stable EU Electricity Supply until 2050

Table 3 - Fuel and CO2 price projections

oil
2010$ 2030 2050 $/barrel 87 115

Gas
/m
3

Coal
$/tonne 91 109

CO2
$/tonne 54 110

$/
1.30 1.20

37.5 52.9

Source: Based on ECF (2010d, 2010f), Mott MacDonald (2010) and Ecorys calculations.

Taking these together additional assumptions can be made, as presented in Table 4.

Table 4 - Assumptions for other adaptation cost items to intermittent generation shares

Lifetime Years
1 2 3 4 5 6 Demand response Interconnection capacity Storage capacity Back-up capacity Intermittent RES curtailment Outage/load shedding 50 50 50 30 50 50

OPEX fixed /kW 10 10 7.5 15

OPEX variable /MWh 1.00 1.00 1.00 0.00 1.00 1.00

Efficiency

Capacity Factor 35% 35% 35%

45%

20% 10% 10%

Source: Based on ECF (2010d, 2010f), Mott MacDonald (2010) and Ecorys calculations.

From all the adaptation measures, only one measure will need to burn fuel, namely the back-up capacity, which will also lead to CO2 emissions, which will be heavily taxed for the CO2 costs by 2050 as shown in Table 4. As a result, the back-up capacity becomes relatively expensive. Figure 8 shows the resulting costs expressed in /kW.
Figure 8 - Adaptation cost estimates to accommodate increasing shares of intermittent generation

/kW/year 500 400 300 200 100 0

Carboncosts Fuelcosts VariableOPEX FixedOPEX CAPEX

Source: Based on ECF (2010d, 2010f), Mott MacDonald (2010) and Ecorys calculations.

In addition, an estimate is needed for the deployment potential of the adaptation measures to accommodate increasing shares of intermittent generation. An optimisation of adaptation measures could show that all six measures are needed. For instance, to demand that intermittent generation always has priority access above other generation technologies, may not be the most economic

Assessment of Needed Share for Stable EU Electricity Supply until 2050

31

solution. Allowing for some RES curtailment, could be a more economic solution to balance the power system. Following ECF Energy Roadmap 2050, these shares can be roughly estimated as 20% demand response, 5% RES curtailment, 3% outages, 20% of interconnection capacity, 27% of backup capacity and 25% of storage. It is interesting to observe that the cost estimate for back-up capacity is very close to the estimate for RES curtailment. This implies that additional back-up capacity and RES curtailment are nearly equally cost-effective in abating the additional balancing need due to intermittent generation. Following the above methodology, it is also possible to derive the levelised costs for intermittent generation technologies. This is used in Section 4.4 to compare the adaptation costs to the levelised costs of intermittent generation. Table 5 shows the assumptions used and the resulting cost estimate is presented in the last column. Note that the data for the capacity factor is given for completeness, but is not used in the cost estimate.
Table 5 - Assumptions to derive levelised costs of intermittent generation

CAPEX /kW
1 2 3 Wind onshore Wind offshore Solar PV 1,050 2,100 1,000

Lifetime Years
25 25 25

OPEX fixed /kW 22.5 90 22.5

OPEX variable /MWh 0 0 0

Capacity Factor 24% 37% 11%

Levelised Cost /kW 138 321 133

Source: Based on ECF (2010d, 2010f), Mott MacDonald (2010) and Ecorys calculations.

4.3

Measures for Stable Supply versus Higher Shares of Intermittent Generation

The next step is the analysis of the link of the two complementary indicators of stable supply to increasing intermittent generation shares. Data from the RES scenario of IRENE-40 have been used to derive the scatter plots in Figure 9 and Figure 10. The data is presented for the nine grid regions and the EU-27 as discussed in section 3.2.
Figure 9 - Link between the share of flexible supply versus the share of intermittent generation

60% 50% Flexiblesupplyshare 40%

IRENE40RESscenario
IT

RESshare2050 RESshare2030 Poly.(RESshare2050) Poly.(RESshare2030) IB CE DE SEFR PL NO UK EU ITIB DE

NO CE

SE FR

UK EU

30% PL 20% 10%

intermittentgenerationshare=0.47(0.05)0.36(0.11)Flexiblesupplyshare,R =0.383 0% 0% 10% 20% 30% 40% 50% Intermittentgenerationshare 60% 70% 80%

Note: Points in the graphs represent EU regions. Flexible supply share is the share of installed capacity of hydro + gas + oil over total capacity. Source: IRENE-40 RES scenario and Ecorys calculations.

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Assessment of Needed Share for Stable EU Electricity Supply until 2050

Figure 9 presents the relationship between the share of flexible generation units versus the share of intermittent generation for 2030 (green line and dots) and 2050 (blue line and dots). In 2030, a weak inverted U-shape curve emerges, whereas in 2050 it is close to a straight decreasing line. Pooling of the data for 2030 and 2050, provides an overall decreasing line with a goodness of fit, R2, of 0.38, and the estimated coefficient for the slope is statistically significant with 99% confidence. This shows that at higher shares of intermittent generation, the share of flexible supply decreases. Hence, Figure 9 shows that there is a good correlation between the share of flexible generation and the intermittent generation share. This result has to be interpreted as a negative relationship, because at higher shares of intermittent generation there will be lower shares of flexible generation capacity units, making it more difficult to balance the power system in real time. Additional adaptation measures, as suggested in section 4.1 will be needed in order to be able to balance the power system. In Annex B, the correlation between flexible supply and intermittent generation as established in Figure 9 is also derived for the data in other scenarios, namely Power Choices and Baseline 2009 scenarios of Eurelectric and the EFF, DES, CCS and BAU scenarios of IRENE-40. These results are, however, statistically less significant and the variation in shares of intermittent generation is much less. This further demonstrates that the chosen RES scenario of IRENE-40 is the most relevant one for this study.
Figure 10 - Link between the balancing need versus share of intermittent generation

2.50

RESshare2050 RESshare2030

IRENE40RESscenario

IB

2.00 Balancingneed

Poly.(RESshare2050) Poly.(RESshare2030) SE IB PL DE NO FR IT UK EU

DE

1.50

1.00 SE PL FR NO IT 0.50 CE

UK EU CE

0.00

intermittentgenerationshare=0.12(0.14)+3.09(0.32)Balancingneed,R2=0.842 intermittentgenerationshare=0.23+2.87Balancingneed,basedontwoEUobservations 0% 10% 20% 30% 40% 50% Intermittentgenerationshare 60% 70% 80%

Note: Points in the graphs represent EU regions. Balancing need is the regional level ratio of the difference between peak and off-peak residual demand over peak residual demand. Source: IRENE-40 RES scenario and Ecorys calculations.

Figure 10 presents the relationship between the difference in peak and off-peak versus the share of intermittent generation for 2030 (green line and dots) and 2050 (blue line and dots). Even though the graph included two polynomials, they are nearly straight lines and the line for 2050 is almost a natural extension of the line for 2030. A regression on the data confirms this graphical result with a goodness of fit, R2, of 0.84, and the estimated coefficient for the slope is statistically significant with 99% confidence. This shows that at higher shares of intermittent generation, the gap between peak and off-peak residual demand widens. Hence, Figure 10 shows a nearly perfect fit between balancing need and the intermittent generation share.

Assessment of Needed Share for Stable EU Electricity Supply until 2050

33

This result also has to be interpreted as a negative relationship, showing that at higher shares of intermittent generation a larger gap between peak and off-peak of residual demand will have to be closed, making it considerably more difficult to balance the power system. The derived linear regression equation (or line) between the share of intermittent generation and balancing need is based on regional data for the EU. However, from Figure 10 it can be observed that the two observations, for the EU total in 2030 and 2050, lay below this line and a line can be drawn through these two points. By taking the difference between these two lines it is possible to derive which part of the balancing need can be abated through transmission capacity in the EU-27, namely 105 GW for a share of 20% intermittent generation rising to 195 GW for a share of 80% intermittent generation. This provides us an upper limit for abatement of the balancing need through reduction of transmission constraints, which is used in the cost abatement model. 36 In Annex B, the same relation as established in Figure 10 is also derived for the data in other scenarios, namely the EFF, DES, CCS and BAU scenarios of IRENE-40. 37 These results are also statistically significant; however the variation in shares of intermittent generation is much less, especially for the BAU and CCS scenarios. The derived correlation for the RES scenario of IRENE40 is relatively close to the DES and EFF scenarios. This demonstrates again the appropriateness of working primarily with the RES scenario.

4.4

Analysis of Drivers for increasing Shares of Intermittent Generation

The final step in the analysis is to derive the four drivers for increasing shares of intermittent generation: 1. Needed amount of stable supply (= 1 intermittent generation); 2. The net balancing need, due to the increasing gap between peak and off-peak residual demand; 3. The merit order curve to adapt the power system to this balancing need (balancing cost); 4. The cost of intermittent generation. First, based on the share of intermittent generation the share of stable supply follows by definition. In order to estimate this figure in terms of GWs, the installed capacity of the IRENE-RES scenario in 2010 (equivalent to 10% intermittent generation) 2030 (equivalent to 35% intermittent generation) and 2050 (equivalent to 60% intermittent generation) is used. In the adaptation cost model the share of intermittent generation increases from 10% by steps of 5% up to 75%, using the technology mixes in 2010, 2030 and 2050, where the installed capacity beyond 60% is a continuation of the trend between 35% and 60%. Figure 11 shows the result (red line). The amounts for stable supply are given in GWs, which is the right vertical axis.

36

37

This could be used to estimate of the benefits of uncongested transmission in the EU-27. However, the costs of such a uncongested transmission system, depends, among others, on the development of the installed capacity, technology mix and demand. Moreover, it will not be economical to aim at a full elimination of congestion. Hence, the costs are expected to always be higher than the benefits. To avoid this problem, the cost adaptation model employs a mix of adaptation measures as introduced in Section 4.2. Data on hourly loads are not available for the Power Choices and Baseline 2009 scenarios of Eurelectric and these are therefore not presented.

34

Assessment of Needed Share for Stable EU Electricity Supply until 2050

Figure 11 - Link stable supply, net balancing need, share of intermittent generation cost and balancing cost for integrating increasing shares of intermittent generation into the interconnected EU-27 power system

200

Balancingcost Intermittentgenerationcost Stablesupply(GW) Netbalancingneed(GW)

1600

Billionperyear

150

1200

100

800

50

400

0 0% 20% 40% 60%

0 80%

Intermittentgenerationshare
Note: Source: This graph combines the results of the previous graphs on stable supply indicators, (residual) load duration curves and the intermittent generation adaptation cost merit order curve. Ecorys calculations with the adaptation cost model.

Second, the yearly peak in the EU-27 is assumed to be constant over all shares of intermittent generation (varying from 10% to 75%) namely 700 GW, which is the average peak of 2030 and 2050. From the derived correlation between the share of intermittent generation and the difference between peak and off-peak (expressed as a linear regression equation), follows the off-peak residual demand for increasing shares of intermittent generation. A balancing need emerges as soon as the difference between peak and off-peak minus flexible supply (which is defined as stable supply minus base-load) is positive. This happens from a share of 28% intermittent generation onwards. Figure 11 shows the result (green line). The net balancing need is given in GWs, which is the right vertical axis. Third, as soon as a net balancing need arises, abatement (balancing) costs emerge, in order to achieve a secure supply. Low levels of net balancing need can be abated by relatively cheap measures such as demand response, interconnection and storage. However, beyond a certain point these adaptation measures will no longer be sufficient to meet the net balancing need and more expensive options have to be used, such as additional back-up capacity, RES curtailment or even allowing for system outages. The derived adaptation cost model is designed to capture these trade-offs. For instance, a relatively low net balancing need is assumed to be fully met with demand response alone, whereas the full net balancing need at a share of 75% intermittent generation is assumed to be met with 20% demand response, 20% interconnection, 25% storage, 27% back-up capacity, 5% RES curtailment and 3% outages. The amounts for balancing cost (purple line) are given in billion s per year, which is the left vertical axis. Fourth and finally, the levelised costs of intermittent generation are also calculated to show how these compare to the adaptation cost, where levelised costs are defined as the cost per unit (expressed in /kW/year) of installed capacity, taking all capital and operational costs into account. The cost assumptions are from ECF and Mott McDonald and have been extrapolated to the

Assessment of Needed Share for Stable EU Electricity Supply until 2050

GW

35

expected costs for 2050. The amounts for intermittent generation cost (blue line) are given in billion s per year, which is the left vertical axis. Overall, the abatement (balancing) costs are relatively low until 40% of intermittent generation, where the abatement costs are estimated to be 25 billion Euros per year. This is equivalent to a 23% cost increase on top of the levelised costs of intermittent generation. Once the share of intermittent generation goes up further, the abatement costs begin to increase exponentially. The abatement costs become significantly high beyond a share of 62% intermittent generation. At this point the abatement costs are estimated to be over 100 billion Euros per year, which is equivalent to a 42% cost increase on top of the levelised costs of intermittent generation. The derived percentages of intermittent generation are based on the best estimate. In order to show the robustness of this result, the most critical assumptions of the derived adaptation cost model have been subjected to a sensitivity analysis: 1. First of all, it is not unrealistic that the derived correlation between share of flexible supply versus share of intermittent generation, and the difference between peak and off-peak versus share of intermittent generation would have been higher or lower. Therefore, the estimated coefficient for the slope of both regression equations is simultaneously increased or decreased by 5%. An increase of 5% (intermittent generation is less harmful than expected) and would bring the estimates down by about 2%, whereas the estimates would increase by about 2% by a decrease in the slope coefficient of 5%. 2. Secondly, an increase (decrease) of 20% in abatement costs would lead to a 3% higher (lower) share of intermittent generation for 25 billion Euros per year and a 4% higher (lower) share of intermittent generation for 100 billion Euros per year. 3. Thirdly, if both variations are applied simultaneously, it would lead to a variation of 5% on the estimate of the share of intermittent generation for 25 billion Euros per year. This sensitivity analysis shows that although there is some uncertainty in the estimates the best estimates are relatively robust. The policy implication of this analysis is that there are clear limits to the deployment of intermittent generation technologies in the EU-27. Furthermore, a corresponding upper threshold is estimated to be around 40% for the share of intermittent generation capacity in both a 2030 and 2050 perspective (with 5% uncertainty). Beyond this share, costly additional preventive measures will have to be taken in order to guarantee power system stability. This limit is based on considerations of abatement (balancing) costs needed to guarantee power system stability. The abatement costs are assigned to the intermittent generation technologies that are causing the need for abatement. A cost increase of 25 billion Euros per year is suggested here as a limit to acceptable costs. The purpose of this analysis has been to show the impact of a higher share of intermittent generation on the additional costs for the power system stability. The final choice of an acceptable cost increase will be a political choice.

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Assessment of Needed Share for Stable EU Electricity Supply until 2050

References

DLR (2008), Renewable energy deployment potentials in large economies, REN21 Renewable Energy Policy Network for the 21st Century, April 2008, Stuttgart; EASAC (2009), Transforming Europes electricity supply An Infrastructure Strategy for a reliable, renewable and secure power system, European Academies Science Advisory Council, EASAC Policy report 11, Cardiff; ECF (2010a), Roadmap 2050 Practical guide to a prosperous, low-carbon Europe Annexes B-E: Grids, European Climate Foundation, Volume 1 2010, Brussels; ECF (2010b), Roadmap 2050 Practical guide to a prosperous, low-carbon Europe Annex A: Generation, European Climate Foundation, Volume 1 2010, Brussels; ECF (2010c), Roadmap 2050 Practical guide to a prosperous, low-carbon Europe Annex F: Macro-economics, European Climate Foundation, Volume 1 2010, Brussels; ECF (2010d), Roadmap 2050 Practical guide to a prosperous, low-carbon Europe Brief on Power Generation, European Climate Foundation, April 2010, Brussels; ECF (2010e), Roadmap 2050 Practical guide to a prosperous, low-carbon Europe Brief on Power Networks, European Climate Foundation, April 2010, Brussels; ECF (2010f), Roadmap 2050 Practical guide to a prosperous, low-carbon Europe Technical Analysis, European Climate Foundation, Volume 1 2010, Brussels; Ecofys (2008), Global potential of renewable energy sources: a literature assessment Background report, REN21 Renewable Energy Policy Network for the 21st Century, March 2008, Utrecht; Ecorys et al (2008), Assessment of non-cost barriers to renewable energy growth in EU Member States AEON, Commissioned by European Commission DG Transport and Energy, May 2010, Rotterdam; Ecorys et al (2010), Investment Needs for future adaptation measures in EU nuclear power plants and other electricity generation technologies due to effects of climate change, Commissioned by: European Commission DG Energy, December 2010, Rotterdam; ENTSOE (2010a), Ten-Year Network Development Plan 2010-2020, European Network of Transmission System Operators for Electricity, June 2010, Brussels; ENTSOE (2010b), ENTSO-E report System Adequacy Forecast 2010-2025, European Network of Transmission System Operators for Electricity, January 2010, Brussels; ENTSOE (2011), Scenario Outlook and System Adequacy Forecast 2011-2025, European Network of Transmission System Operators for Electricity, February 2011, Brussels; EREC (2009), [R]enewables 24/7 Infrastructure needed to save the climate, European Renewable Energy Council and Greenpeace, November 2009, Brussels; Eurelectric (2009), Power Choices Pathways to Carbon-Neutral Electricity in Europe by 2050, Full Report, Union of the Electricity Industry, November 2009, Brussels; European Union (2004), Green X Deriving optimal promotion strategies for increasing the share of RES-E in a dynamic European electricity market, FP5 research programme, European Commission DG Research, Vienna; European Union (2008), Update of the nuclear illustrative programme in the context of the second strategic energy review, COM (2008) 776, Brussels; European Union (2010a), Energy 2020 A Strategy for Competitive, Sustainable and Secure Energy, European Commission Directorate-General Energy, November 2010, Brussels; European Union (2010b), Energy Infrastructure Priorities for 2020 and beyond, a blueprint for an integrated European Energy Network, COM (2010) 677/4, Brussels;

Assessment of Needed Share for Stable EU Electricity Supply until 2050

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European Union (2011a), Energy Efficiency Plan 2011, COM (2011) 109, European Commission Directorate-General Energy, March 2011, Brussels; European Union (2011b), Smart Grids: from innovation to deployment, COM (2011) 202, European Commission Directorate-General Energy, April 2011, Brussels; EWEA (2009), Pure Power Wind energy targets for 2020 and 2030, European Wind Energy Associations, November 2009, Brussels; EWIS (2010), Towards a successful integration of large scale wind power into European electricity grids, European Wind Integration Study, March 2010, Brussels; FORATOM (2009), Nuclear energy and Greenhouse Gas Emissions avoidance in the EU, FORATOM for nuclear energy in Europe; September 2009; IEA (2010a), Energy Technology Perspectives 2010 Key graphs, OECD/IEA, 2010, Paris; IEA (2010b), Energy Technology Perspectives 2010 Scenarios and strategies to 2050 Executive Summary, OECD/IEA, 2010, Paris; IEA (2010c), Grid Integration of Variable Renewables Project, Presentation NEA meeting Hugo Chandler, October 2010, Paris; IEA (2010d), World Energy Outlook 2010 Executive Summary, International Energy Agency, 2010, Paris; IEA (2011), Harnessing Variable Renewables A Guide to the Balancing Challenge, International Energy Agency, Hugo Chandler, August 2011, Paris, ISBN 978-92-64-11138-7; IRENE-40 (2011), Internal Report Task 2.3: Scenario Synthesis, FP7 research programme, Energy research Centre of the Netherlands, commissioned by the European Commission DG Energy, Brussels; Mott MacDonald (2010), UK Electricity Generation Costs Update, June 2010. NEA (2011a), Nuclear Power and Climate Change nuclear development, Nuclear Energy Agency, OECD paper, Paris; NEA (2011b), Table of Contents of the WPNE Study The System Effects of Nuclear Power, Nuclear Energy Agency, NEA/NDC(2011)21, Paris; NEI (2007), Nuclear Energy: A Key tool in reducing Greenhouse Gas Emissions, Nuclear Energy Institute, Policy Brief, Washington; Oxford Economics (2007), Report on modelling the macroeconomic competitiveness impacts of EU climate change policy, June 2007, Oxford; VGB (2010), Facts and Figures: Electricity Generation 2010/2011, VGB PowerTech, September 2010, Essen (Germany);

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Assessment of Needed Share for Stable EU Electricity Supply until 2050

Annex A: Definitions

This section presents an overview of the definitions of terms used throughout this Final Report. It is important to note that these definitions in particular the definitions for the classification of the different electricity generating sources are (only) tentative. For example, electricity generating technologies evolve over time, which means that their classification may change due to evolving markets and technological circumstances (e.g. technology improvements). Balancing Cost The adaptation costs needed to balance the power system (expressed in billion s per year) Balancing Need Yearly residual demand peak yearly residual demand off-peak divided by yearly residual demand peak (unit-less indicator) Base-load The installed capacity that can not respond quickly enough to sudden fluctuations in residual demand, which is defined as 1 intermittent generation flexible supply (expressed in GWs) Flexible Supply Generation sources that can follow short run demand fluctuation. Defined in this study as the installed capacity of hydro + gas + oil (expressed in GWs) Intermittent Generation Generation sources that follow weather patterns, rather than demand. Defined in this study as the installed capacity of solar PV + wind onshore + wind offshore (expressed in GWs) Intermittent Generation Cost The levelised costs of the installed capacity of solar PV + wind onshore + wind offshore (expressed in billion s per year) Net balancing Need The additional need for balancing the power system due to intermittent generation, which is defined as yearly residual demand peak subtracted by yearly residual demand off-peak flexible supply (expressed in GWs) Residual demand Hourly demand corrected for intermittent generation, which is defined as Demand intermittent generation (expressed in GWs) Stable Supply All generation sources that can be scheduled to follow variations in demand. Defined in this study as base-load + flexible supply (expressed in GWs)

Assessment of Needed Share for Stable EU Electricity Supply until 2050

39

Annex B: Graphs for Alternative Scenarios

Figure 12 - Link between the share of flexible supply versus the share of intermittent generation

60% 50% Flexiblesupplyshare 40% 30% 20%

EurelectricPowerChoicesscenario
IT CE NO NO CE FR SE SE UK EU IT UK EU

RESshare2050 RESshare2030 Poly.(RESshare2050) Poly.(RESshare2030) IB IB DE

DE FR

PL 10% 0% 0% 10% 20% 30% 40% Intermittentgenerationshare 50% 60% PL intermittentgenerationshare=0.33(0.07)0.06(0.20)Flexiblesupplyshare,R =0.004
2

Note: Points in the graphs represent EU regions. Flexible supply share is the share of installed capacity of hydro + gas + oil over total capacity. Source: Eurelectric Power Choices scenario and Ecorys calculations.

Figure 13 - Link between the share of flexible supply versus the share of intermittent generation

70% 60% Flexiblesupplyshare 50% 40% 30% 20%

RESshare2050 RESshare2030

EurelectricBaseline2009scenario
IT SE UK FR IT NO FR UK EU EU

IB DE

Poly.(RESshare2050) Poly.(RESshare2030) CE NO CE

IB DE

PL

PL 10% 0% 0% 5% 10% 15%

SE 2 intermittentgenerationshare=0.21(0.07)+0.65(0.26)Flexiblesupplyshare,R =0.257 20% 25% 30% 35% Intermittentgenerationshare 40% 45% 50%

Note: Points in the graphs represent EU regions. Flexible supply share is the share of installed capacity of hydro + gas + oil over total capacity. Source: Eurelectric Baseline 2009 scenario and Ecorys calculations.

Assessment of Needed Share for Stable EU Electricity Supply until 2050

41

Figure 14 - Link between the share of flexible supply versus the share of intermittent generation

60%

IRENE40Efficiencyscenario
50% Flexiblesupplyshare NO 40% CE 30% 20% 10% PL

IT PL CE SE NO UK EU FR FR UK IB SE

RESshare2050 RESshare2030 Poly.(RESshare2050) Poly.(RESshare2030) EU IT DE IB DE

intermittentgenerationshare=0.43(0.06)0.16(0.17)Flexiblesupplyshare,R =0.044 0% 0% 10% 20% 30% 40% Intermittentgenerationshare 50% 60%

Note: Points in the graphs represent EU regions. Flexible supply share is the share of installed capacity of hydro + gas + oil over total capacity. Source: IRENE-40 Efficiency scenario and Ecorys calculations.

Figure 15 - Link between the share of flexible supply versus the share of intermittent generation

70% 60% Flexiblesupplyshare 50%

IRENE40Desertecscenario
IT

RESshare2050 RESshare2030 Poly.(RESshare2050) Poly.(RESshare2030)

NO 40% 30% PL 20% 10% CE

PL SE CE FR EU UK IB NO SE FR IT IB EU UK

DE

DE

intermittentgenerationshare=0.46(0.06)0.26(0.13)Flexiblesupplyshare,R =0.189 0% 0% 10% 20% 30% 40% 50% Intermittentgenerationshare 60% 70% 80%

Note: Points in the graphs represent EU regions. Flexible supply share is the share of installed capacity of hydro + gas + oil over total capacity. Source: IRENE-40 Desertec scenario and Ecorys calculations.

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Assessment of Needed Share for Stable EU Electricity Supply until 2050

Figure 16 - Link between the share of flexible supply versus the share of intermittent generation

70%

IRENE40CCSscenario
60% Flexiblesupplyshare 50% NO 40% 30% 20% 10% PL CE CE PL

RESshare2050 IT UK NO SE IT UK SE FR EU EU RESshare2030 Poly.(RESshare2050) Poly.(RESshare2030) IB IB DE DE

FR

intermittentgenerationshare=0.46(0.07)0.20(0.27)Flexiblesupplyshare,R =0.029 0% 0% 5% 10% 15% 20% 25% 30% Intermittentgenerationshare 35% 40% 45%

Note: Points in the graphs represent EU regions. Flexible supply share is the share of installed capacity of hydro + gas + oil over total capacity. Source: IRENE-40 CCS scenario and Ecorys calculations.

Figure 17 - Link between the share of flexible supply versus the share of intermittent generation

60%

IRENE40BAUscenario
50% Flexiblesupplyshare 40% CECE 30% 20% 10% IT IT

RESshare2050 RESshare2030 Poly.(RESshare2050) Poly.(RESshare2030)

SE SE FR NO NO FR EU EU

IB

UK IB

UK DE DE

PL PL

intermittentgenerationshare=0.33(0.05)0.01(0.21)Flexiblesupplyshare,R =0.0001 0% 0% 5% 10% 15% 20% 25% 30% Intermittentgenerationshare 35% 40% 45%

Note: Points in the graphs represent EU regions. Flexible supply share is the share of installed capacity of hydro + gas + oil over total capacity. Source: IRENE-40 BAU scenario and Ecorys calculations.

Assessment of Needed Share for Stable EU Electricity Supply until 2050

43

Figure 18 - Link between the balancing need -peak versus share of intermittent generation

2.50

RESshare2050 RESshare2030

IRENE40Efficiencyscenario
IB DE IT

2.00 Balancingneed

Poly.(RESshare2050) Poly.(RESshare2030)

1.50 UK IB 1.00 PL NO 0.50 CE intermittentgenerationshare=0.02(0.12)+3.33(0.33)Balancingneed,R =0.850 0.00 0% 10% 20% 30% 40% Intermittentgenerationshare 50% 60%
2

SE

EU DE

PLUKNO SE IT CE FR EU

FR

Note: Points in the graphs represent EU regions. Balancing need is the regional level ratio of the difference between peak and off-peak residual demand over peak residual demand. Source: IRENE-40 Efficiency scenario and Ecorys calculations.

Figure 19 - Link between the balancing need -peak versus share of intermittent generation

2.00 1.80 1.60 1.40 Balancingneed 1.20 1.00 0.80 0.60 0.40 0.20 0.00 0%

RESshare2050 RESshare2030 Poly.(RESshare2050) Poly.(RESshare2030)

IRENE40Desertecscenario
IB UK DE

IB UK PLNO SE FR IT CE EU PL

DE EU SE NO IT FR

CE

intermittentgenerationshare=0.18(0.11)+2.11(0.28)Balancingneed,R =0.756 10% 20% 30% 40% 50% Intermittentgenerationshare 60% 70% 80%

Note: Points in the graphs represent EU regions. Balancing need is the regional level ratio of the difference between peak and off-peak residual demand over peak residual demand. Source: IRENE-40 Desertec scenario and Ecorys calculations.

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Assessment of Needed Share for Stable EU Electricity Supply until 2050

Figure 20 - Link between the balancing need -peak versus share of intermittent generation

1.20 1.00 0.80

RESshare2050 RESshare2030 Poly.(RESshare2050) Poly.(RESshare2030) UK PL PL NO ITUK EU EU

IRENE40CCSscenario

IB IB

DE DE

Balancingneed

SE SE IT FR FR NO

0.60 0.40 0.20

CE CE

intermittentgenerationshare=0.41(0.07)+1.72(0.27)Balancingneed,R =0.695 0.00 0% 5% 10% 15% 20% 25% 30% Intermittentgenerationshare 35% 40% 45%

Note: Points in the graphs represent EU regions. Balancing need is the regional level ratio of the difference between peak and off-peak residual demand over peak residual demand. Source: IRENE-40 CCS scenario and Ecorys calculations.

Figure 21 - Link between the balancing need -peak versus share of intermittent generation

1.40 1.20 1.00 Balancingneed 0.80 0.60 0.40 0.20

RESshare2050 RESshare2030 Poly.(RESshare2050) Poly.(RESshare2030) NO NO IT IT PLSE SE FR FR PL CE CE IB UK IB DE DE

IRENE40BAUscenario

UK

EU EU

intermittentgenerationshare=0.43(0.05)+1.94(0.21)Balancingneed,R =0.828 0.00 0% 5% 10% 15% 20% 25% 30% Intermittentgenerationshare 35% 40% 45%

Note: Points in the graphs represent EU regions. Balancing need is the regional level ratio of the difference between peak and off-peak residual demand over peak residual demand. Source: IRENE-40 BAU scenario and Ecorys calculations

Assessment of Needed Share for Stable EU Electricity Supply until 2050

45