SEM Chart of the Week
Old friends: the hidden good side of the EU
Senior Consultant (Ireland)
In a week that has brought us further into the Brexit mire, I think it is important to highlight some of the good work that the EU and European Commission (EC) does behind the scenes of the energy industry. In particular, how research funding can be used to expand on the developments being pioneered in European states to create real value for industry.
The EU Sysflex project is being led by EirGrid and SONI, having received €20mn in funding to increase the level of renewable energy integration into the European grid systems. The project’s main task is to identify the challenges and solutions to system operation with high penetrations of wind, solar and other non-synchronous renewable generation on the electricity networks.
This week’s I-SEM Chart of the Week looks at the results that this project hopes to achieve, as Europe targets 50% of generation from renewables by 2030.
The EU Sysflex project will look at harmonising the approach to system services and data management on a pan-European level.
A key tenet of the project is the need for cooperation across a number of jurisdictions. The integrated nature of frequency management means that all parties in the European grid structure need to be involved from the ground up in an ambitious project of this magnitude. To do this, the EC has brought in industry experts, stakeholders and market participants from 15 countries (see Figure 1).
The System Operators in Ireland and Northern Ireland, EirGrid and SONI, have been chosen to lead this project, which is a reflection on their successful work to date in managing high levels of renewable generation on an isolated grid.
The generation from wind in Ireland has been continuing to increase in recent years, and data from EirGrid shows that at certain points last Saturday morning (12 January), 80% of electricity generated on the island was from wind. This has been achieved through identification of inertia limits on the system and the implementation of system services in the DS3 programme, which provides the System Operators with the tools and processes to balance frequency on their grid system during periods of high non-synchronous renewable generation. This innovative approach has enabled EirGrid and SONI to increase generation from wind and solar onto the grid. This has led to SEM having the highest levels of non-synchronous generation globally, for an isolated grid network.
The 80% headline figure makes impressive reading. However, the level of detailed work that has been carried out to enable that figure is the reason why EirGrid and SONI are leading the way on this European-wide project.
Years from today
The EU has set two future scenarios for this project to investigate the possible levels of non-synchronous generation on the European system. The Transition Scenario, which looks at the current anticipated build-out rate for renewables and which will bring the EU to 40% of generation from renewables, and the Ambition Scenario, which sets stretch targets with 50% of generation from renewables.
First glances at the graph in above suggest that Germany (DE) and Denmark (DK) are streets ahead in terms of grid stability and renewable penetration. While it is true that they have invested strongly in renewable generation, they have also been able to leverage their geographical location to provide system inertia and not rely on frequency system services. With France to the west (nuclear), Poland to the east (coal) and large hydro plants north and south in the Nordic and Alpine countries, they have a large reserve of dispatchable generation that can be called on to support their renewable generation.
As the other nations around Germany and Denmark start to move towards greater levels of non-synchronous generation, they will likely begin to encounter a lack of inertia on the integrated European network. Eventually a programme of system services, similar to the DS3 programme, will need implementation.
As the ambitious growth plans for renewables across Europe mature to reality, the System Operators will increasingly face the challenges that EirGrid and SONI have been working through for the past 10 years. It is a unique opportunity for Ireland to be at the leading-edge of what is possible for a carbon free future in the industry. As the inertia challenge works its way across Europe it will push frequency services and demand management to the front and centre of both government policy and investment.
The revenues for providing these services could provide strong business cases in a challenging wholesale energy market. In SEM, the value of these services could rise to up to €235mn by 2020; figures of up to €1bn by 2030 are being touted in some corners without a missed beat. It raises the question on the future shape of wholesale markets, and how they incorporate the growth of system services.
As this sector expands into Europe, the market for system services may grow to orders of magnitude above that, with EirGrid providing the technical know-how and the EU providing the seed money.
Download this week’s SEM Chart of the Week