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Transition to modern power systems with renewable base load

This presentation discusses the rapid growth of renewables and its consequences on power systems. It explores the role of flexibility and provides examples from the USA and Denton, Brazil. The presentation also highlights the decreasing prices of solar and wind power plants, making them economically viable without subsidies. The text language is English.

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Transition to modern power systems with renewable base load

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  1. Gabriel Cavados Wärtsilä Brasil Transition to modern power systems with renewable base load

  2. presentation • Rapid growth of renewables • Consequences on power systems • Role of flexibility • Example from USA: Denton • Some thoughts on Brazil

  3. Solar and wind power plant prices keep going down Wind & solar are becoming economically viable, without subsidies, and keep getting more competitive!!!!! Solar ”explotion” coming in the next 5 years! There is NO GOING BACK! Renewable base load is here to stay! ($/W) Solar PV 2000 $/kW!? 300 $/kW!? 2017 Wind 900 $/kW!? Source: Bloomberg New Energy Finance

  4. Record low Wind PPA prices Mexico $17.70/MWh Source: Wind Technologies Market Report 2016

  5. Dramatic decline in solar pv PPA prices Saudi $17/MWh

  6. Also in brazil December 2017 April 2018

  7. Usa in the forefront USA annual new capacity additions

  8. Cumulative wind & solar capacity Current global power generation capacity 2016 ~ 6700 GW 6000 GW 5000 GW 4000 GW 3000 GW 2000 GW 1000 GW Lifetime of a new thermal power plant - - - 40 years Source: Bloomberg New Energy Finance

  9. presentation • Rapid growth of renewables • Consequences on power systems • Role of flexibility • Example from USA: Denton • Some thoughts on Brazil

  10. Welcome to a board of directors meeting in 2015... Welcome to a board of directors meeting in 2007... CHALLENGES OF INFLEXIBILITY – WISDOM FROM GERMANY ”... What information did the board have on their table in 2007?” Top Plant: Irsching 4 Combined Cycle Power Plant, Irsching, Bavaria, Germany Owner/operator: E.ON Inauguration: September 2011 The Irsching 4 Combined Cycle Power Plant has set a new world record in power plant efficiency with its new SGT5-8000H gas turbine. With an output of more than 578 MW and efficiency of 60.75% (net) achieved at a world record test run in May 2011, the plant demonstrates that climate protection, low-cost power generation, and flexible operation using fossil fuels can be attained simultaneously through technical advances. The right answers can no longer be found from the past... What is our business case? State of art CCGT!! What happened?

  11. CHALLENGES OF INFLEXIBILITY – WISDOM FROM GERMANY • Germany - facts • Germany pushed in Renewableswith feed-in tariff • Fast growth of solar after 2010 • 2016 statistics • System peak load 83 GW • 21,3 % of GWh by renewables Irsching

  12. And in texas

  13. [Presentation name / Author]

  14. Duck from california Source: CAISO

  15. presentation • Rapid growth of renewables • Consequences on power systems • Role of flexibility • Example from USA: Denton • Some thoughts on Brazil

  16. Key messages from Bloomberg nov 2017 • Solar and wind dominate future electricity investment and capacity • Gas plays a key role, but not as most people imagine! Germany 2017 Germany 2030 Coal Source: Bloomberg New Energy Finance

  17. What is flexibility? Valuable flexibility features in future in high-RES power systems No start-up cost Almost 50 power system models No Minimum Down Time Energy and reserves co-optimization Efficient reserve provision Multiple starts per day No Minimum Run Time Fast start-up time No ramping cost Low Minimum output

  18. What is this magic number? 1192 Number of starts of 160 MW Wärtsilä Antelope power plant (TX, USA) during 2016. Recent New Mexico (USA) tender for 560 MW flexible gas power plants requests 1500 plant starts per year

  19. THE FUTURE DISPATCH…

  20. Role of flexibility in high-res power systems Enable full utilization of renewables – go off-line & restart fast! Produce balancing energy  Net load Provide operational reserves Contingency reserve – rapid (s) system fault correction - A/S Wind & solar forecast error reserve - new reserve Typical gas power plant operation profile Start & stop several times every day 2500...3500 annual operating hours / year (ERCOT & SPP today) Typical battery storage operation Spinning reserve & frequency control = Ancillary Services Energy shifting later when battery costs are lower

  21. presentation • Rapid growth of renewables • Consequences on power systems • Role of flexibility • Example from USA: Denton • Some thoughts on Brazil

  22. Municipal Utility 40 miles north of Dallas • 353 MW peak load • Owns Gibbons Creek coal plant with three other municipalities • City council: We must have 70% of energy from Renewable sources by 2019 denton energy business case

  23. Gibbons Creek operation – decreasing utilization 2014 2015 2016 [Presentation name / Author]

  24. Denton business case RENEWABLES AS BASELOAD Contract adequate MW to cover 70 % of electricity needs (MWh) BUY POWER FROM REAL TIME ELECTRICITY MARKET Average price lower than DAH, but volatility will increase WINNING PORTFOLIO STRATEGY Accept and mitigate market risks to minimize costs & to maximize renewables HEDGE & OPTIMIZE WITH FLEXIBLE GENERATION Hedge R/T purchase costs & capture R/T & DAH price spikes & sell A/S + = +

  25. Denton’s energy mix 2016 Denton’s energy mix 2019 Renewable Denton – The best portfolio (energy mix) Flexible gas generation Renewable PPA Market purchase Market purchase Renewables Coal ownership

  26. Annual cost to serve load Savings over 20 years The Brattle Group to validate the results RenDen vs Status quo RenDen vs Market $ -750 Mn $ -975 Mn Status quo Pure market strategy Renewable Denton

  27. 70 % renewables 80 % CO2 emission reduction 30 % cost saving The book... A dramatized story of USA Power industry´s struggle to understand and accept the new reality

  28. presentation • Rapid growth of renewables • Consequences on power systems • Role of flexibility • Example from USA: Denton • Some thoughts on Brazil

  29. Some thoughts on brazil…. Thermal generation will have 2 distinctly different roles Hydro power balancing Week / month time horizon Annual operation hours depend strongly on rain & load growth Wind and solar balancing Minute / hour time horizon Plants to be located in load centres close to the wind / solar resource Several short operation cycles / day, matching changes in wind & solar conditions Annual running hours ~ 2000....4000 By installing adequate quantity of flexible generation in the system to enable efficient utilization of renewables  Brazil may avoid the EU & USA problems.

  30. Thanks! gabriel.cavados@wartsila.com

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