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The Role of TSO to integrate Renewables in Germany

Vienna, 20.10.2016

Michael Kranhold

REFIP 5.0

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Agenda:

The Tasks of the TSOEnergiewendeGrid Operation and ExtensionTSO-DSO CooperationEnergiewende Outlook 2035

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The Tasks of the TSO

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50Hertz as part of the European Electricity System

1. 50Hertz 2. TenneT TSO 3. Amprion4. TransnetBW

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2

3

43

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Owner of the transmission grid

System operator

Market developer

„Trustee“ for managing EEG* cash flows

In charge of operation, maintenance and the development of extra-high-voltage lines and power junctions (substations) as well as for the connection of large-scale generators and consumers (including offshore)

Catalyst for the development of the energy market, especially in Northern and Central-Eastern Europe.

Responsible for managing cash flows resulting from the Renewable Energy Law (EEG).

Responsible for system stability of the transmission system around the clock: frequency control and voltage regulation, congestion management.

Transmission grids are the technical backbone of the energy supply in Germany and in Europe

Source: 50Hertz * German Renewable Energy Law

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Situation end of 2015

The power system in the 50Hertz grid area

TSO (400 kV, 220 kV)

DSO – low level (< 110 kV)

DSO – 2nd to m. level (< 110 kV)

DSO – 1st level (< 110 kV)

7 TSOs 12 conv. power plants/storages

- Amprion- TenneT- TransnetBW

- CEPS- Energinet.dk- PSE

- Schwarze Pumpe- Boxberg- Jänschwalde- Lippendorf- Reuter West- Goldisthal

- Markersbach- Hohenwarte II- Brunsbüttel (GKW)- Moorburg- Rostock- Schkopau

Other DSOs

9 Distribution System Operators

159 Distribution System Operators

Approx. 1.200 Windfarms

200 Windfarms

PV, biomass and other RES

CHP and IPP

CHP and IPP

CHP and IPP

PV, biomass and other RES

- E.DIS- ENSO Netz- SW Magdeburg - AVACON- MITNETZ Strom

- Stromnetz Berlin- Stromnetz Hamburg- TEN- WEMAG Netz

9 Windfarms 3 Steel Plants- 7 onshore- 2 offshore

Cascading

PV, biomass and other RES

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50Hertz at a glance

Area

Total length of lines

Maximum load

Energy consumption (based on electricity supplied to end-consumers in acc. With the EEG)

Installed capacity:- of which Renewables- of which Wind

Turnover- of which grid

Workforce

109.589 km² (~31%)

10.150 km (~30%)

~ 96 TWh (~20%)

~ 16 GW(~20%)

2015

50.528 MW (~27%)26.975 MW (~30%)16.107 MW (~39%)

9,8 bn. €1,4 bn. €

955

109.360 km² (~31%)

9.800 km (~30%)

ca. 98 TWh (~20%)

~ 17 GW (~20%)

2010

38.354 MW (~35%)15.491 MW (~30%)11.318 MW (~40%)

5,6 bn. €0,6 bn. €

650

* As at 2015/12/31; approved figures will be available in August 2016; Source: 50Hertz

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Energiewende

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What are the core elements of German „Energiewende“?Policy-driven structural changes in the German energy system:

Phase out of nuclear energy production by 2022

Dynamic RES development (EEG 2.0)Targets: 40-45% share of total electricity consumption until 2025, 80% until 2050

Greenhouse gas reduction: Future of coal-fired generation in questionTarget: 40% CO2 reduction by 2020, 80-95% by 2050

Energy efficiency: 50% increase of electricity efficiency by 2050

Grid extension to transport RES energy to the big industrial centres in SouthernGermany

The German Energy Transition

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Challenges of „Energiewende“

? Costs: How to distribute costs equally in

society?

Grid extension: How to speed it up

and raise acceptance?

Conventional power plants:

How to accompany the structural change of the

energy system

Combined Heat and Power (CHP): How

many plants needed?

Market design: How to find right balance

between market-based prices and secure investments in RES?

RES integration: How to increase

flexibility of producers and consumers?

European energy policy:

How to coordinate „Energiewende“ with

neighbouring countries?

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2000 2006 2015

RES have developed from a niche product to a dominant energy source in the 50Hertz Hertz grid area (more than 50% share of total installed generation capacity in 2015)

Wind Solar PV Biomass

RES development in Germany

~ 30,000 plants ~ 221,000 plants ~ 1,600,000 plants

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RES in the 50Hertz grid area:Present situation and forecast of installed capacity

Source: 50Hertz; As at 2015/12/31

Installed capacities in MW

0

5000

10000

15000

20000

25000

30000

35000

40000

45000

2000 2005 2010 2015 2020 2025

OthersBiomassWind onshoreWind offshoreSolar PV

Installed Capacity End of 2015

Wind 16.107 MW

Solar PV 8.828 MW

Biomass 1.812 MW

Others 228 MW

Total 26.975 MW

2.100

8.100

15.491

26.975

32.600

38.150FuturePast

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RES growth requires an adaptation of the transmission grid infrastructure

Increasing transport need

Existing extra-high voltage lines from North to South Germany are overloaded – this leads to high re-dispatch costs.

Further aggravation of the problem:

Wind power generation increases in the North. Due to the nuclear phase-out, output in the South will drop by about 8 GW.

Grid adaptation is key to successfully implement the energy transition

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What key factors are essential to successfully implement the „Energiewende“?

1. Stable legal and regulatory framework conditions are essential to implement the grid expansion

2. Broad social consensus and political support at all levels as key factors to successfully implement the energy transition

3. Observing economic efficiency and avoiding and eliminating falseincentives (uniform grid fees, expanding deliverables)

4. Observing European framework - we are part of a European system

5. Further development of the electricity market design

The German Federal Government has identified the crucial issues for a successful „Energiewende“. Now its implementation is what counts.

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Grid Operation and Extension

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Conclusions

Solar eclipse 2015: A successful trial-runfor the future’s electricity system

PV-Kombi Germany, Day ahead Forecast 08.00am PV-Kombi Germany, Extrapolation

- The market mechanisms that were developed and introduced over the last years work well

- TSOs were able to grant high system stability by adapting additional measures

- A highly flexible control system as adopted in this exceptional situation will be required on a daily basis in the future

Megawatt (MW)

25.000

20.000

15.000

10.000

5.000

0

~13,7 GW

~6 GW

00:1

5:00

01:0

0:00

01:4

5:00

02:3

0:00

03:1

5:00

04:0

0:00

04:4

5:00

05:3

0:00

06:1

5:00

07:0

0:00

07:4

5:00

08:3

0:00

09:1

5:00

10:0

0:00

10:4

5:00

11:3

0:00

12:1

5:00

13:0

0:00

13:4

5:00

14:3

0:00

15:1

5:00

16:0

0:00

16:4

5:00

17:3

0:00

18:1

5:00

19:0

0:00

19:4

5:00

20:3

0:00

21:1

5:00

22:0

0:00

22:4

5:00

23:3

0:00

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50Hertz counter-measures to master unplanned load flows through the grid

Re-dispatch(„virtual PST“)

Phase shifters(physical PST) Grid extension

- Reduces system-security-relevant flows

- The challenge is to grant efficiency and cost effectiveness

- Reduces system-security-relevant flows

- Requires major investments

- Grants security of the whole electricity system

- Paves the way for an integrated European market

Short-term Mid-term Long-term

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Grid extension projects 50Hertz area since 2009 (as of 2016/6/30)

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Federal Requirement Plan 2012 as legal basis for grid extension need

Federal Requirement Plan approved by German Parliament in June 2013 –

Adjustments in Dec. 2015

- Basis: 2012 Grid Development Plan of the TSOs

- 43 projects confirmed

- 3 HVDC corridors

- Pilot project for respectively 5 direct current and alternating current cable lines

- Current Grid Development Plan confirms Federal Requirement Plan

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Progress of offshore projects in the Baltic Sea

Steady development of wind offshore projects in the Baltic Sea – Grid connections for existing projects according to plan

2011: Commissioning of Baltic 1 2012: Start of construction Baltic 2

2014: Connection granted to windfarm operators in the “Westlich Adlergrund” region; first cables ordered

2015: Allocation of grid connection capacity to the OWF Wikinger (350 MW) and Arkona-Becken Südost (385 MW)

2015: Grid connection of Baltic 2 2015: Grid Connection „Westlich Adlergrund“:

Receipt of all necessary approvals for the construction of the cable connection; start of preliminary works for the sea- and landline cable laying

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TSO-DSO Cooperation

Ten-point plan for ancillary services (AS) 22

The role of the distribution systems is undergoing drastic changes

Technological development as a result of the energy transition

Source: dena distribution system study, 2012

Shift of generation capacity to the distribution system Ancillary services can be provided by the DSOs more decentralised control required Unclear division of roles for the control of the generating units

OLD: centralised energy generation NEW: decentralised energy generation

1 millionproducers

1 millioncontrollableloads

Ten-point plan for ancillary services (AS) 23

Ten-point plan is milestone for cooperation by TSO and DSOs

Key elements of the agreement

Further development of the system security through the integration of RES feed-in

Improved coordination of the grid and system operation

Mutual exchange of operational data

Performance of pilot projects

Common efforts to bring about changes in the legal and regulatory framework

http://www.50hertz.com/Portals/3/Content/Dokumente/Medien/Positionspapiere/20140915_10-Punkte-Programm_Systemdienstleistungen-Kurzfassung.pdfhttp://www.50hertz.com/Portals/3/Content/Dokumente/Medien/Positionspapiere/10_Punkte_Programm_Systemsicherheit-Langfassung.pdf

Ten-point plan for ancillary services (AS) 24

Ancillary services and available measures

The share of renewable energy used for ancillary services needs to increase in response to the changed manner in which electricity is supplied and the rise in energy demand.

Primary control reserve Secondary control reserve Minute reserve supply Switchable and interruptible loads Automatic

frequency relays

Reactive power control

• Control of generating units

• Operation of compensation elements

Short-circuit capacity

Transformer stepping andswitchover

Black-start and islandingpotential

Commissioning with/withoutprior voltage switching

Coordination acrossgrid levels (concepts)

Feed-in management Redispatch / congestion

management Operational planning / disconnection planning Back-up power plants Data interchange (energy information network)

Frequencycontrol

Voltagecontrol

Systemrestoration

Systemcontrol

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Energiewende Outlook 2035

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Background and Motivation

The energy transition is in full swing, but future development remains uncertain Germany finds itself in an energy transition. Today, more than 30% of electricity

consumption is covered by renewable energy sources, 49% in the 50Hertz area. The upcoming development trends of this energy transition remain uncertain (esp. with

regard to the policy objective of achieving 80% of electricity usage from renewable energy sources by 2050):

Will prosumer models with PV-systems and small-scale systems prevail? Will power generation through large systems be located at profitable locations? How will the energy transition develop in other European countries?

50Hertz considers itself a service provider for the implementation of the energy transition. In this respect, 50Hertz is committed to policy objectives, socio economic welfare

and efficient solutions. Therefore, the company is analyzing possible future developments in

“50Hertz Energiewende Outlook 2035”.

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The energy development paths form a wide spectrum

Policy objectives are achieved through…

Prosumer oriented energy transition

Energy transition according to the

German renewable energy act

Competitive energy transition

Delayed energy transition

Incomplete energy transition

Policy objectives are not achieved due to…

… a strong buildup of PV systems.

… a combination of various technologies.

… large wind energy systems in profitable locations.

... planned implementation of various technologies is delayed.

… insufficient acceptance due to, for example, high costs, prevents a complete energy transition.

For the 50Hertz Energiewende Outlook 2035, five realistic energy transition scenarios have been developed.

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In all scenarios, high capacity from renewableswith different technologies is expected

0

10

20

30

40

50

60

70

80

90

100

Inst

alle

d C

apac

ity in

Ger

man

y [G

W]

Pros

umer

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nted

ene

rgy

trans

ition

Ener

gy tr

ansi

tion

acco

rdin

g to

RE

Act

Del

ayed

ene

rgy

trans

ition

Com

petit

ive

ener

gy tr

ansi

tion

Inco

mpl

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ansi

tion

NEP B 2025

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NEP B 2035

NEP B 2025

Pros

umer

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nted

ene

rgy

trans

ition

Ener

gy tr

ansi

tion

acco

rdin

g to

RE

Act

Del

ayed

ene

rgy

trans

ition

Com

petit

ive

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ansi

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Inst

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Ger

man

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Inco

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fsho

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Even in a delayed or incomplete energy transition, the German electricity supply in 2035 will be characterized by high shares of renewables.

Wind Power Solar Power

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0

50

100

150

200

250

300

2010 2015 2020 2025 2030 2035 2040 2045 2050

Strong expansion of renewables also in other European countries like France and Italy is expected

Inst

alle

d C

apac

ity o

f RE

-Pla

nts

[GW

]

Italy

Poland

2020 2025 2030

Germany

France

Simulation of all European Countrieswithin the study

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ConclusionsEn

ergy

Tran

sitio

n O

utlo

ok 2

035

-Con

clus

ions

A broad range of energy transition scenarios is possible: a prosumer oriented path, a renewable energy act path, a competitive manifestation, but also a delayed or incomplete implementation.

The 50Hertz control area remains a clear net energy exporter in all energy transition scenarios, while Germany tends to become an energy importer.

50Hertz‘s planned grid expansion measures for the coming years are necessary for all possible energy transition development paths. The robustness is proven by sensitivity simulations of major trends such as storage or gas power plant allocation.

Wind power systems are the major driver of the need for the grid extension. In contrast, the allocation of gas power plants is not relevant for the grid expansion.

Even with a decomissioning of lignite power plants by 2035, 50Hertz‘s planned grid extension measures for the coming years remain necessary.

Even in a prosumer oriented energy transition, with a high number of small scale storage units combined with PV-systems, significant transmission requirements remain, and 50Hertz‘s planned grid extension measures for the coming years are essential.

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Michael Kranhold

50HertzHeidestraße 210557 Berlin

030 – 5150 –4502Michael.Kranhold@50Hertz.com

www.50Hertz.com

Thanks for Attention