June 2016 –
Case study
Lack of flexibility in European electrical systems
leads to deteriorated grid management
How solar forecasting could avoid negative energy prices due to high
renewable energy generation
SAS Reuniwatt, 14 rue de la Guadeloupe, 97490 Sainte-Clotilde, Reunion Island, France
Phone: +33 977 216 150 / Fax: +33 262 921 020 / mail: [email protected]
SAS with a capital of €150.000 RCS Saint-Denis 518 919 345
June 2016 –
Case study
The development of photovoltaics in Germany
The German energy transition
Electricity generation with photovoltaics (PV)
The 21st century was marked by a joint effort to
achieve energy transition: to gradually move
from a strong fossil resource consumption
towards a more environmentally-friendly one led
by renewable energy sources (RES). Several
important agreements like the Kyoto Protocol in
1997 and more recently, the UE climate plan in
2008 represent a global trend that aims at
restricting global warming.
In the new German energy mix, PV embraces an
important place with 6.4 per cent of the national
electricity production in 2015.
Photovoltaic energy has many assets. First, it
uses sunlight, an inexhaustible source, as a
resource. Second, its operating costs are very
low. Eventually, the cost of PV has dropped
considerably in recent years. The only obstacle to
its massive development is its dependence on
weather conditions. This means that solar energy
is variable and not as controllable as a
'conventional' energy. As the network’s stability
may be jeopardized, the regulatory authorities
are obliged to limit the penetration of variable
energies into the grid.
At an international level, Germany is considered
as one of the forerunners of this transition, with
a total involvement of its energy plan for RES:
Energiewende.
After only 10 years of existence, it has resulted
in an increase in the proportion of RES from 6 to
25 per cent. During a sunny and windy day, this
represents a supply of nearly half of the
electricity demand of the entire country.
The use of PV (like wind energy) places new challenges to the various grid
stakeholders. To overcome these, it is necessary to consider four areas of
development:
1
Variability anticipation according to various
physical parameters (position of the sun, cloud
cover...);
2
Production decentralisation with a better
energy distribution to ease the management of
"weather-located" events;
3
Energy storage to better pilot the injection of
variable energies into the grid,
4
Demand management (demand response,
flexibility from market participants…) to
maintain the balance of the network.
June 2016 –
Case study
Incentive policies for the development of renewables in Germany
Various measures have been implemented
over the years to generate an appetite for the
renewable energy sector and to promote the
German energy transition.
In 2001, the law on renewable energy sources
(Erneuerbare-Energien-Gesetz) was created. It
allows the introduction of a guaranteed feedin tariff for 20 years, at a price known in
advance which enables the producers to make
their investments profitable. The cost overrun
impacts the end consumers in the form of a
surcharge: EEG-Umlage.
This policy has increased after the Fukushima
incident, with a strong desire to phase out
nuclear energy by 2022. To achieve this,
several objectives have been settled:
-
-
-
To reduce greenhouse gas emissions by 40
per cent by 2020 and by 80-95 per cent by
2050 compared to 1990,
To reduce primary energy consumption by
2 per cent by 2020 and by 50 per cent in
2050 compared to 2008,
To increase the share of RES within the
primary energy consumption to over 50
per cent in 2050, with an intermediate
increase of 35 per cent by 2020.
Despite a renewable electricity selling price
higher than that of other energies (fossil,
nuclear...), the almost zero operating costs of RES
can rank them in priority through the merit order.
The merit order effect consists in appealing to the different electrical production units,
progressively, according to their increasing marginal costs. Following this logic, the first
production units called are those producing electricity known as "lethal", meaning that it
is "lost" if it is not immediately used (it is the case for wind and solar).
Source: Clean Energy Wire
June 2016 –
Case study
Consequences of the development of RES on the German market
The impact of renewables on energy prices
A variety of measures have been installed to
promote the development of solar and wind
energies in Germany. But these changes in the
common order of markets have produced
different changes both in the consumers and
in the economic management of energy.
First, Germany has a purchase cost of
electricity which is one of the highest in the
world (nearly twice that of France). In 2015, it
was 30 cents / kWh at the household level and
15 cents / kWh for industrials. This is due to
the renewable support tax which is used to
offset the high price of renewable electricity
through the merit order that ranks it as the first
energy consumed.
Negative prices
Second, negative electricity prices have
emerged. This phenomenon corresponds to a
price signal on the wholesale electricity market
which happens in case of large flexible
production and low demand.
It remains more profitable for producers to
continue producing for a few hours and thus
lose money rather than to stop production and
lose even more. Indeed, stopping certain
thermal production facilities can be costly
given the technical and economic constraints
(starting-up costs, technical threshold of
minimum power, minimum off-time…) or even
difficult in the case of nuclear power.
Concretely, this translates with buyers being
paid to use electricity.
Historically, Germany was the first country to
allow that measure in September 2007. Every
year, the country experiences about 50 hours
of negative prices, ranging from € -200 / MWh,
to € -500 / MWh in rare cases.
In recent years, new technologies have been
developed to better manage overproduction
of variable renewable energies, such as
consumption forecasting, EMS (or Energy
Management Systems), forecasts using
persistence...
Lately, however, a significant event occurred
th
on the German electricity
electricity market.
market. On
OnMay
May 88th,,
2016, the
the day
day was both sunny and windy,
2016,
windy,
which caused, at around 1pm, the production
of 55 of the 67 GW consumed that day, a rate
rate
of penetration into the network of 87 per cent
for RES.
Energy production from May 8th, 2016
Source
GW
% net production
Solar
27,62
59%
Wind
17,30
37%
Conventional
15,32
33%
Total production
60,24
129%
Export
-13,59
-29%
Net production
46,65
100%
Source: German Energy Blog
June 2016 –
Despite a significant share of 13.6 GW of
energy exported to neighbouring countries,
the
management
of
this
energy
overproduction had important consequences
on the energy market.
In order to preserve the integrity of the overall
power grid of the country, this phenomenon
Case Study
has spawned over the day negative price of
approximately -144.78 EUR / MWh, according
to EPEX Spot. A net loss that was the
responsibility of all energy producers who
preferred to inject electricity into the grid
rather than to cut production.
Power, prices, generation and consumption on May 8th, 2016
Negative prices
Source: Quartz
Solutions to negative prices
Negative electricity prices are not inevitable
and solutions exist and are gradually
established. The current situation, where the
consumer is sometimes paid to consume, must
be regarded as a transitional adjustment
period to allow the development of renewable
energy sources. But ultimately, solutions will
have to be put in place in technological and
regulatory plans. The first necessity is to
successfully adapt support mechanisms for
RES to European targets by 2030 as well as
market mechanisms and the lack of flexibility
of some means of production.
Furthermore, a solution at the energy
management level is the use of electricity
storage, and energy management tools
including, in the case of PV, solar production
forecasts.
June 2016 –
Case Study
Soleka, Reuniwatt’s forecasting solution
The variability of photovoltaic energy is
intrinsically linked to meteorological hazards:
photovoltaic generation can experience power
variations of up to 70 per cent in just a few
seconds. Because of that, the energy
producers’ commitments to electricity network
managers become more complex. Reuniwatt
supplies a solution to these actors to
accurately predict solar irradiance.
Thus, Reuniwatt has developed Soleka, a
technological innovation to forecast solar
energy from one minute to several days in
advance, through a combination of the most
efficient methods.
Intra-day forecasting
Intra-day forecasting (from 30 minutes to 6
hours in advance) uses satellite images to
predict the movement of clouds and later
extract the irradiance data on the study area.
This solution optimizes:



A more stable network management
(intra-day balancing of supply and
demand, use of backup systems);
Storage tools for industrials;
A possible management by energy
producers of commitment notifications
at an intra-day level.
Day-ahead forecasting
To provide day-ahead forecasts (from 6 hours
to several days in advance), Soleka uses
weather data, downscaling approaches (data
refining + weather modelling) and a statistical
method to obtain accurate forecasts for this
time horizon.
These information provided for the following
day enable:



The power producer to send the
network
manager's
commitment
announcements;
Network managers to forecast the
expected production for the next day
and therefore to adapt the balance
between production and consumption;
Traders in the energy market to have
reliable information to speculate,
which indirectly helps stabilize the
volatility of the price of solar energy.
Intra-hour forecasting
Intra-hour forecasting, or shortcasting, (from
a few minutes to an hour in advance) is based
on the observation of the sky from an imaging
system developed and patented by Reuniwatt.
The information collected will help:


Energy
storage
and
microgrid
stakeholders to better pilot their
infrastructure;
Improve the accuracy of other types of
forecasts in solar PV plants
June 2016 –
Case study
Soleka, a solution to the consequences of variability on the energy
market
In recent years, the development of the energy
sector has focused largely on the growth of RES.
But our energy transition goals cannot be
focused only on this, they should also guide us
towards finding auxiliary technologies to
support them. It is essential before installing
more variable energy sources (solar, wind) to
stabilize the existing production in order to
avoid an imbalance of supply and demand, as
was the case on May 8th 2016 in Germany, which
led to a sale of electricity at negative prices.
Suffering from the inherent variability of solar
energy is no longer an option if we want to use
more renewables in our energy mix. Solar
forecasting brings a reliable answer to this
challenge.
It appears as a versatile solution to support all
players in the solar energy sector. From
producers to energy suppliers, forecasting
allows better integration of storage systems and
adds perfectly to the data-management
interaction objectives of smart cities.
In addition, solar forecasts remain an essential
solution to stabilize the power grid in an energy
mix with a high penetration of solar energy. It
thus avoids to have to deal with negative
electricity prices as:


Reuniwatt
14, rue de la Guadeloupe
97490 Sainte-Clotilde
Reunion Island – France
+33 9 77 21 61 50
[email protected]
www.reuniwatt.com
Long-term forecasting helps manage
the energy mix with calls for energy
producers in line with the solar
production forecasts;
Intra-day forecasting is a solution to
manage overproduction peaks with
preventive calls for consumption.