Interconnectors and RES

1. Interconnectorsand RES ArnisStaltmanis AS AUGSTSPRIEGUMA TIKLS Board member 04.07.2013 | www.ast.lv

2. Content • EU Strategy • ThedevelopmentsofgenerationcapacityinBalticStates • RES longtermchallenges • TheprojectsinBalticStatestowards 2050 10.05.2013 | www.ast.lv

3. EU milestones towards 2050 Electricity Highways 2050 • Large and intermittent wind volumes in the northern Seas. • Large-scale solar in southern Europe and possibly in northern Africa. • The Middle East along with the developments in storing and consuming electricity and in decentralized models of electricity generation. Towards carbon-neutral technologies in the future energy mix 10.05.2013 | www.ast.lv

4. DriversofPowerSystemEvolution • Securityofsupply • Renewableenergyintegration • InternalMarketintegration 10.05.2013 | www.ast.lv

5. Bulkpowerflowsrelated to generationconnection 10.05.2013 | www.ast.lv

6. ThedevelopmentsofgenerationcapacityinBalticStates 10.05.2013 | www.ast.lv

7. TheavailablecapacityinBalticStates Thereliableavailablecapacityisshownwithoutmarketrules. 10.05.2013 | www.ast.lv

8. Thedevelopmentsof RES inBalticStates 10.05.2013 | www.ast.lv

9. TheRES long term challenges • Balancing the unpredictable renewable energy sources (RES) – Wind, Sun and Biomass/Biogas. • High surplus by 2020 expected in the Nordic countries will need to be transmitted to the Continental Europe. • Grid development may not be in time if RES targets are met as scheduled, due to internal grid reinforcement restrictions. • Uncertainties regarding the market development on the EU-Russian border. • Large uncertainty regarding generator investments is a challenge for grid development. • North - South flow direction in all the Baltic Sea countries. • Changing of power balance in Germany is significantin the short term. Wind energy – the most challenging forecasted generation unit in grid operation 10.05.2013 | www.ast.lv

10. Whererenewableenergyinterconnects 10.05.2013 | www.ast.lv

11. Performance Expectations at Various Connection Points in the Electric System 10.05.2013 | www.ast.lv

12. ConcernswithIntegratingRenewables • Penetration • Affected by utilities' existing generation mix regulating capabilities, load characteristics, resource availability, and correlations between system load and resources • Additional systems costs imposed by variability and uncertainty may go up with increasing penetration • Costs are moderate – up to 20-30% Penetration – and depend on balancing authority and market structure • Infrastructure Capacity • Lack of transmission capacity from stranded renewable resource locations • Variable and Uncertain Generation • Solved by • spatial diversity of the resource • flexible conventional generation • grid operations and control areas • limited curtailment for extreme events • load management • sufficient AC interconnectioncapacity • and at high penetrations possibly storage TechnicalConcerns Realbutsolvable 2012.09 | www.ast.lv

13. RES Interconnection – TechnicalConcerns Wind and Large Solar (Bulk System Connected Generation) • Steady state and transient stability analysis • Load/Generation Coincidence (Peak Load and Variability of Source) • Regulation Requirements • Integration with Automatic Generation Control (AGC) • Incorporation of renewable resource forecasting • Examine current operating practice and new concepts to enable high penetration; • frequency responsive (create regulating reserves) • demand side coordination Most technical concerns at the bulk level have been solved with modern wind turbines and grid codes 2012.09 | www.ast.lv

14. RES Interconnection – TechnicalConcerns Distributed Solar and Small Wind (Distributed Generation) • Issues listed above, plus • Voltage and VAR Regulation • Power Quality (Harmonics, Flicker, DC Injection) • Unintentional Islanding • Protection design and coordination (short circuit, recloser, etc.) • Equipment grounding • Load and generation imbalance • Generation interaction with controllable loads (DSM) • Storage and storage controls Technical concerns at the distribution level have been identified, but small REShave not been fully integrated into planning and operations 2012.09 | www.ast.lv

15. Solutions to Variable and Uncertain Generation Winddiversity • Spatial diversity of the resource • Flexible conventional generation • Sufficient AC interconnectioncapacity • Grid operations and control areas • Load management • Limited curtailment for extreme events • And at high penetrations possibly storage 2012.09 | www.ast.lv

16. Energy Storage to Address RESGeneration • Costs of More Wind Than Forecasted: • ValueofDay-Aheadcontractsnotrealised • Day-AheadNominatedGasnotused • Power Plant Cycling • Exportson AC interconnections • Costs of Less Wind Than Forecasted: • Spot market electric purchases • Greater “wear & tear” costs due to more starts/stops than assumed in Retail rate design • Potential depletion of gas system pressure due to higher than expected starts/usage • Power Plant Cycling • Imports on AC interconnections 10.05.2013 | www.ast.lv

17. Historical and Current Integration Activities Regarding Large Wind Integration Studies • A large amount of research has looked into the technical concerns regarding integration of wind farms into the electrical grid. • Several studies have examined 20-30% penetration • For large, diverse electric balancing areas, existing regulation and load following resources and/or markets are adequate and associated costs are low 2012.09 | www.ast.lv

18. Historical and Current Integration Activities Regarding Large Wind Integration Studies • Moderate cost increases may be needed to account for variability and uncertainty of wind resource (3-4% low to 7-10% high) • Largely dependent on local utility market design and resource constraints • State of the art forecasting can reduce costs • majority of the value can be obtained with current state-of-the-art forecasting • additional incremental returns from increasingly accurate forecasts • Realistic studies are data intensive and require sophisticated modeling of wind resource and power system operations 2012.09 | www.ast.lv

19. Needs for Distributed Renewables • Distributed renewable interconnection technologies with advanced functionality • Integration of renewable energy with dispatchable load and storage • Electric power systems technologies, controls, and operations that enable high penetration of distributed renewable energy systems • Models for renewable energy systems that allow them to be included in the planning and analysis tools 2012.09 | www.ast.lv

20. TheLongtermchallengesfortransmissiongrid The main objectives are: 1. increase of the security of supply; 2. increase of the competition in liberal electricity market; 3. development of the robust and reliable transmission system; 4. Baltic States integration in European power system; 5. RES integration. • External interconnectors: • NordBalt –2016; • Estlink2 – 2014; • LitPol link – 2015. • Internal reinforcements in 2020 (LV, LT un EE): • EE-LV 3rd interconnection – 2020; • Kurzemes ring, LV – 2018; • Panevezis-Musa-Klaipeda, LT – 2018; • Harku-Sindi-Tartu, EE – 2018. 10.05.2013 | www.ast.lv

21. Interconnectorsplaycruicialroleinorder to meet EU RES targets • Inorder to havemaximumbenefitfrominterconnectors: • forectastingmethodshas to beimproved; • opportunitiesgivenbysmartgridshas to befullyutilzed; • newwaysofeffiecientenergystoragehas to bedeveloped Conclusions 10.05.2013 | www.ast.lv

22. LatvianTransmissionSystem OperatorAS AUGSTSPRIEGUMA TĪKLS Dārzciema iela 86, Rīga, LV-1073T: (+371) 67728353F: (+371) 67728858ast@ast.lvwww.ast.lv Thankyouforattention