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Institutional and Technical Analysis of Wind Integration Challenges in Northeast China

Institutional and Technical Analysis of Wind Integration Challenges in Northeast China. Michael Davidson Advisors: Ignacio Perez-Arriaga, Valerie J. Karplus TMP – June 2014. Motivation. Generation (2000-2013) Non-Fossil Capacity Targets.

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Institutional and Technical Analysis of Wind Integration Challenges in Northeast China

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  1. Institutional and Technical Analysis of Wind Integration Challenges in Northeast China Michael Davidson Advisors: Ignacio Perez-Arriaga, Valerie J. Karplus TMP – June 2014

  2. Motivation Generation (2000-2013) Non-Fossil Capacity Targets *Final 2020 targets are still under discussion Source: China Electricity Council, NEA, ERI Wind is key focus of low-carbon electricity policy efforts in China. Grid-connected wind capacity is expected to triple by 2020, and may reach 400 / 1000 GW in 2030 / 2050.

  3. Spilled wind Wind integration challenges led to additional 9 Mt coal burned in 2012 Curtailment: Available wind turbines are instructed to not put power on the grid for economic, grid stability and other reasons

  4. Some technical causes

  5. Some institutional causes • Tariffs set administratively by NDRC for each provincereflecting economic costs and affordability • Annual “generation quotas” for each coal plant to recover costs • Transmission quotas/limits between provinces  most balancing is done within province • “Energy efficient dispatch”piloted since 2007: implementation uneven, and inconsistent with power sector market reform Sources: Ma, 2011; Kahrl et al., 2013; Gao & Li, 2010

  6. Research question • What is the relative contribution of technical and institutional causes to wind curtailment in the Northeast? • Evaluate the potential of the following solutions to reduce costs and wind curtailment: • More flexible operation of coal plants • Dynamic minimum outputs of CHP units based on heat load • Heat storage • Greater transmission interconnection

  7. Unit commitment optimization: Minimizes total operating cost = variable + startup costs Week time period: T=168 hours Fixed heating load constrains CHP plant operation Hydropower dispatch with historic inter-season storage rates Up and down spinning reserves All prices in yuan ($1 = 6.2 Yuan) Model

  8. Data 6 representative wind resource weeks Fixed weekly electricity load Capacity (end of 2010)

  9. Unit composition • Database of all generators: CEC (2010) • Updated unit breakdowns, cogeneration status

  10. Heat demand Daily Heating Load Power-Heat Curve

  11. “Generation quotas”: set minimum capacity factor of coal generators based on provincial average and reasonable summer/winter difference “Provincial dispatch”: (1) Set transmission limits and transmission directions between provinces. (2) Meet reserve requirement at provincial level. Modeling institutional constraints Source: Kahrlet al., 2013; Gao & Li, 2010

  12. Results

  13. Reference Case (Technical Factors Only) Ja– January Ma - March

  14. Flexible coal • Lower minimum outputs (from 54% to 40%) improve cost and wind integration • Startup/shutdown times, ramp limits have little effect • Startup costs have noticeable effect

  15. Heat • Dynamic outputs in dispatch worsens curtailment  Economic curtailment from not shutting down a high must-run baseload unit • Storage has potentially huge impact

  16. Regulatory Features: Provincial Dispatch • Reserve requirements at provincial level increase curtailment:

  17. Generation Quota • Highest curtailment for provincial dispatch with generation quota • Difficulties w/model convergence (Ma1 wind scenario)

  18. Conclusions (1) Technical • Absent regulatory design issues, there is curtailment (6.6% average), but still below observed levels of curtailment (15-40% in winter months) • Heat-electricity interactions can be measured: large impact of storage implies significant coupling and potential benefits from coordination • Some flexibility changes in coal (e.g., lower mins and reduced startup costs) will reduce curtailment…but not all (e.g.,shorter startup/shutdown times, higher ramp rates)

  19. Conclusions (2) Regulatory • Provincial dispatch with minimum generation quotas increases curtailment on order of technical causes • More broadly, this methodology helps identify province-level dynamics in an otherwise opaque system • Future research: Due to economic curtailment, does cost-minimizing dispatch guarantee elimination of integration challenges?

  20. Thank you 谢谢

  21. References Gao, C., and Li, Y. (2010). Evolution of China’s power dispatch principle and the new energy saving power dispatch policy. Energy Policy, 38(11), 7346-7357. Kahrl, F., Williams, J., Ding, J. H., & Hu, J. F. (2011). Challenges to China's transition to a low carbon electricity system. Energy Policy, 39(7), 4032-4041. Kahrl, F., Williams, J. H., & Hu, J. (2013). The political economy of electricity dispatch reform in China. Energy Policy, 53(0), 361-369. Kerr, T. (2008). CHP/DHC Scorecard: China. International Energy Agency. Liu, W., Lund, H., & Mathiesen, B. V. (2011). Large-scale integration of wind power into the existing Chinese energy system. Energy, 36(8), 4753-4760. Ma, J. L. (2011). On-grid electricity tariffs in China: Development, reform and prospects. Energy Policy, 39(5), 2633-2645. Schuman, S. & Lin, A. (2012). China’s Renewable Energy Law and its impact on renewable power in China; Progress challenges and recommendations for improving implementation. Energy Policy 51 (2012): 89-109. Zhao, X., Zhang, S., Yang, R., & Wang, M. (2012). Constraints on the effective utilization of wind power in China: An illustration from the northeast China grid. Renewable and Sustainable Energy Reviews, 16(7), 4508-4514. Zhang, D., Davidson, M., Gunturu, B., Zhang, X. & Karplus, V. J. An Integrated Assessment of China’s Wind Energy Potential (Report No. 261). (MIT JPSPGC, Cambridge, MA, 2014)

  22. China power sector reform • 1949-1985: Vertically-integrated state-run utility (Ministry of Water Resources and Electric Power, later Ministry of Electric Power) • 1985-1997: Private & foreign investors allowed to invest in generation, “competed” with local utilities • 1997-2002: Ministry broken up • Regulatory fns SETC, SDPC and later NDRC • State-owned generating assets  Big Five SOEs • T&D assets, system operation  State Grid, Southern Grid • 2003-present: Reform slowed – markets, indep system operator were not created • China does not fit either model – only partially unbundled

  23. Why the Northeast High proportion of combined heat and power (CHP) units Zhang et al. (2014) Kerr (2008)

  24. Regional electricity/heat institutions Northeast Grid State Grid Provincial Governments Provincial Grids Municipal Governments Wind Subsidiaries Electricity Energy SOEs Wind IPPs District Heating Government Quasi-gov’t SOE Other Coal Generators

  25. Monthly Curtailment Figures Wind curtailment (generation) by province (1st half 2012) Source: China Association of Agricultural Machine Manufacturers

  26. In a region with high overcapacity

  27. Transmission

  28. Transmission (Provincial Dispatch)

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