The optimal path for greater use of renewable energy in Greece WHITE PAPER ON POWER SYSTEM OPTIMISATION
The global energy market landscape is in transition, largely due to the rapidly decreasing cost of renewables. Major players are CONTENTS moving towards more flexible and sustainable energy systems with a rapidly increasing share of renewable energy, declining inflexible thermal generation, and a wider application of flexible I. Market background ...... 3 II. Determining the optimal path for power generation and energy storage technologies. Greece ...... 4 III. The modelling results. . . . . 5 All European Union member states are required to create a National Energy IV. Recommendations and benefits.13 and Climate Plan (NECP) on how they intend to reach the following 2030 EU targets: V. Conclusion ...... 14 • 32% share of renewable energy in final energy consumption • 26% reduction in primary energy consumption compared to 2005 • 40% reduction in greenhouse gas emissions compared to 1990
In the most recent version of Greece’s NECP, wind and solar capacity are set to more than double by 2030, with coal reduced to half of its current capacity, reducing CO2 emissions by 50%. However, it is worth noting that these figures may be revised upwards in the light of a recent statement from the Greek government announcing a complete shutdown of all coal-fired plants by 2028 instead of 2030 and an increase in the share of renewables from LEARN MORE: 31 to 35%. https://www.wartsila.com/ energy
White paper on power system optimisation | The optimal path for greater use of renewable energy in Greece | 2020 2 White paper on power system optimisation | The optimal path for greater use of renewable energy in Greece | 2020 Installed capacity 2020-2030 - Scenario 1 - NECP
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Installed capacity 2020-2030 - Scenario 2 - Optimal I. Market background 40000
35000 The share of renewable energy in Greece is already over 20%. As the amount of renewables in the system increases,30000 more and more energy will be curtailed as the system lacks the flexibility to cope with the intermittent nature of renewable generation. 25000 Greece is also in the process of establishing a balancing market that is planned to go live in 2020. This market20000 will help the transmission system operator (TSO) source flexibility more efficiently and also provide MW an opportunity for flexible generation to make greater inroads in the Greek market. 15000 INSTALLED CAPACITY The current installed capacity relies heavily on inflexible thermal capacity in the form of coal (lignite) plants 10000 and combined cycle gas turbines (CCGTs), which together provide 70% of the total required energy. Hydro, CCGT cycling and interconnectors to neighbouring countries are currently the main sources of flexibility; 5000 while CCGT is not suited to this role, hydro – particularly the reservoir hydro commonplace in Greece – does provide some degree of flexibility. 0 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
Installed capacity 2020-2030 - Scenario 1 - NECP Installed capacity 2020–2030
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Solar PV Wind Hydro ICE OCGT CCGT STInstalled Gas capacity 2020-2030 - Scenario 2 - Optimal ST Coal Peak load Domestic energy mix 2019
Source: current version of NECP for Greece. 40000 Domestic energy mix 2019 7% 35000 Natural gas
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Lignite 25000 Hydro 25% 20000 MW Total 42% 15000 40.8 10000 TWh
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0 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 Source: Yearly DAS trading system report 26% 2019, Energy Exchange Group
White paper on power system optimisation | The optimal path for greater use of renewable energy in Greece | 2020 3
Solar PV Wind Hydro ICE OCGT CCGT ST Gas ST Coal Peak load II. Determining the optimal path for Greece
The objective of this study, carried out using PLEXOS, was to model the optimal path for the power system in Greece. ABOUT PLEXOS® ENERGY The goal was to determine how the NECP for Greece can SIMULATION SOFTWARE be further optimised by taking advantage of the country’s PLEXOS by Energy Exemplar is a excellent solar and wind conditions and to assess the role of proven energy simulation software flexible generation in the Greek mainland power system. used by the world’s leading system operators, regulators and Our analysis introduces flexible power generation to planners as well as utilities, traders, complement renewables while also trying to determine if consultants and manufacturers. total operational costs and emissions can be further reduced Wärtsilä uses PLEXOS globally for compared to the NECP. power system modelling, both in SCENARIOS CONSIDERED long-term capacity development Scenario 1 (base case) optimisation and short-term Capacity additions and retirements as planned in the NECP dispatch optimisation. PLEXOS is for Greece. built to find the most cost optimal solution for each scenario based on Scenario 2 (optimal scenario) the applied constraints. PLEXOS is free to optimise the capacity additions. The sources for our study are the NECP report and Bloomberg New Energy Finance figures for renewable energy source
(RES) costs. For both scenarios, fuel and CO2 prices were taken from the NECP. Wind and solar profiles are based on actual generation in 2017 using data from the ENTSO-E Transparency platform. Hydro data is based on actual generation data taking into account yearly variations and is also taken from the ENTSO-E transparency platform. The model takes into account day-ahead pricing for the neighbouring countries in order to determine volume of exchange. The study was performed as a long-term generation expansion model in PLEXOS. The planning horizon is 2020–2030 and the resolution time of the model is one hour. Note: the results of the scenario 1 PLEXOS model match the actual NECP very closely. The results presented here for scenario 1 are from the PLEXOS model, not the NECP plan.
4 White paper on power system optimisation | The optimal path for greater use of renewable energy in Greece | 2020 Installed capacity 2020-2030 - Scenario 1 - NECP
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20000 III. The modellingMW results
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10000 CAPACITY MIX OVER THE PLANNING HORIZON
In the5000 optimal scenario the share of wind and solar is higher than in the NECP scenario. The optimal scenario also favours flexible thermal generation (engine power plants) over CCGTs. 0 Installed2020 capacity2021 2020-2030 2022- Scenario 1 - NECP2023 2024 2025 2026 2027 2028 2029 2030 Installed capacityInstalled capacity2020–2030 2020-2030 - Scenario - Scenario 11: - NECP NECP
40000 40000 Installed capacity 2020-2030 - Scenario 2 - Optimal 35000 35000 40000 30000 30000 35000 25000 25000 30000 20000 MW 20000 MW 25000 15000 15000 20000 MW 10000 10000 15000 5000 5000 10000 0 0 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 5000 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
0 Installed capacity 2020-2030 - Scenario 2 - Optimal 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 Installed capacityInstalled capacity2020–2030 2020-2030 - Scenario - Scenario 22: - Optimal Optimal
40000 40000 35000 35000 30000 30000 25000 25000 20000 MW 20000 MW 15000 15000 10000 10000 5000 5000 0 0 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
Solar PV Wind Hydro ICE OCGT CCGT ST Gas ST Coal Peak load
White paper on power system optimisation | The optimal path for greater use of renewable energy in Greece | 2020 5
Solar PV Wind Hydro ICESolar PV OCGTWind CCGTHydro STICE Gas STOCGT Coal PeakCCGT load ST Gas ST Coal Peak load Annual capacity built 2020-2030 - Scenario 1 - NECP
ANNUAL CAPACITY BUILD-OUT OVER THE HORIZON In both3500 scenarios one lignite plant is built: the Ptolemaida V power plant, which is currently under construction and planned to come online in 2020/2021. Ptolemaida V will be operated on lignite up until 2028, after which3000 fuel conversion will be discussed. For this study we have assumed that the plant will undergo a gas conversion in 2028.
2500 Both scenariosAnnual capacity also builtshow 2020-2030 reservoir - Scenario 1hydro - NECP expansion in 2022 and pumped storage in 2025. Hydro is highly dependent on environmental permits and finding a suitable location. Therefore, it has been assumed that the hydro2000 expansion plans outlined in the NECP will be implemented as planned with no further hydro rollout. 3500 MW
1500 3000 Annual capacity built 2020-2030 - Scenario 1 - NECP Installed capacity 2020–2030 - Scenario 1: NECP 1000 2500 3500 500 2000 3000
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6 White paper on power system optimisation | The optimal path for greater use of renewable energy in Greece | 2020
Solar PV Wind Hydro ICE OCGT CCGT ST Gas ST Peak load
Solar PV Wind Hydro ICE OCGT CCGT ST Gas ST Peak load In the optimal scenario the annual build-out of wind and solar is higher than in the base case, especially during the later years of the planning horizon when investment costs are lower. Both scenarios show additional investment in natural gas-based generation, though use of gas in the optimal scenario is slightly lower than in the base case. In the optimal scenario flexible thermal generation (engine power plants) is recommended. As flexible thermal generation can be quickly ramped up and down as required, it provides the flexibility needed to deal with the intermittent nature of renewables.
White paper on power system optimisation | The optimal path for greater use of renewable energy in Greece | 2020 7 Annual storage capacity built 2020-2030 - Scenario 1 - NECP While the NECP outlines a 700 MW storage addition, it does not specify the type or duration of this storage. For this study it has been assumed that this storage capacity will be realised as pumped storage in 2025. As previously1000 stated, this pumped storage addition has also been assumed in the optimal scenario. In addition to the pumped storage the model is building battery energy storage systems (BESS) for both frequency Annualregulation storage capacity (power built 2020-2030 application) - Scenario and1 - NECP energy shifting. This shows that the 700 MW of pumped hydro is part800 of the solution but that there is room for other storage technologies as well.
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Power application battery Energy shifting battery Hydro PS
8 White paper on power system optimisation | The optimal path for greater use of renewable energy in Greece | 2020
Power application battery Energy shifting battery Hydro PS Share of energy 2020-2030 - Scenario 1 - NECP
70000 Share of energy 2020-2030 - Scenario 1 - NECP
ENERGY MIX OVER THE PLANNING HORIZON 60000 With the increased amounts of renewable energy in the system, the optimal scenario shows a faster ramp- 70000 down on thermal generation. Furthermore, towards the end of the horizon, flexible thermal capacity is used to 50000provide energy to the system when required. 60000 Import and export do not differ markedly between the two scenarios. This serves to confirm the notion that 40000 interconnectors cannot be assumed to effectively address the curtailment problem – one cannot assume 50000
thatGWh excess renewable energy is automatically sold to neighbouring countries since they most likely also have30000 excess wind and solar energy at the same time. 40000 Share of energy 2020-2030 - Scenario 1 - NECP
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White paper on power system optimisation | The optimal path for greater use of renewable energy in Greece | 2020 9 0 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
Solar PV Wind Import Hydro ICE OCGT CCGT ST Gas ST Coal Share of renewable energy 2020-2030 - Scenario 1 - NECP
100 SHARE OF RENEWABLES 90 In the NECP scenario the share of renewable energy (including hydro generation) in the system is approximately80 60%, while in the optimal scenario the share increases to nearly 80%.
70 Share of renewable energy 2020-2030 - Scenario 1 - NECP Share of energy 2020 –2030 - Scenario 1: NECP 60
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10 White paper on power system optimisation | The optimal path for greater use of renewable energy in Greece | 2020 CO2 EMISSIONS
In the optimal scenario, CO2 emissions are reduced from the base case by a further 69% in 2030. This is an important metric for reaching the 2030 targets set by the EU.
Annual CO2 emission intensity comparison
Annual CO2 production comparison
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White paper on power system optimisation | The optimal path for greater use of renewable energy in Greece | 2020 11 RES CURTAILMENT As peak demand coincides with the peak in solar generation, almost no solar energy is curtailed. However, wind curtailment increases over the whole planning horizon. Even though the curtailment of wind in the optimal scenario is slightly higher than in the NECP scenario, more wind energy is utilised in the system as there is significantlyRES curtailment more 2020-2030 wind capacity. - Scenario This 1 - NECP means (%) that it is economically a better choice to overbuild wind than running existing inflexible thermal generation. In future, curtailed energy could be used in power-to-x technologies, and this should be taken into account 100 when developing subsequent models. 90 RES curtailment 2020-2030 - Scenario 1 - NECP (%)
Share of80 energy 2020–2030 - Scenario 1: NECP
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0 12 White paper on power2020 system 2021optimisation2022 | The optimal2023 path2024 for greater2025 use of renewable2026 energy2027 in Greece2028 | 20202029 2030
Solar PV Wind IV. RecommendationsSystem cost, EUR/MWh and benefits
70 In order to optimise the NECP for Greece, PLEXOS suggests increasing the annual build-out of wind and
solar compared60 to the NECP. PLEXOS also suggests adding flexible thermal capacity in the form of gas- fired engine power plants. About 700 MW of flexibility is needed by the end of the planning horizon in 2030.
For energy50 customers in Greece, optimising the system should translate into a lower price for electricity.
The overall increase in system cost can be attributed to increasing fuel and CO2 allowance prices over the horizon. Calculated as cumulative savings, the total savings at the system level amount to EUR 4.2 billion 40 over 10 years.
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This study was performed to show that flexibility has a valuable role to play in the Greek mainland system and that the already ambitious capacity expansion can be optimised further. By investing in flexible thermal generation capacity, more wind and solar energy can be utilised and the use of inflexible thermal generation – lignite plants in this case – can be ramped down more quickly. Total system savings could amount
to EUR 4.2 billion over 10 years, with CO2 emissions reduced by 69% compared to the current situation.
BENEFITS OF THE OPTIMAL SCENARIO
69% REDUCTION EUR 4.2 BILLION
IN CO2 EMISSIONS SAVINGS OVER IN 2030 10 YEARS
14 White paper on power system optimisation | The optimal path for greater use of renewable energy in Greece | 2020 White paper on power system optimisation | The optimal path for greater use of renewable energy in Greece | 2020 15 information containedherein. Thispublicationis intendedforinformation purposesonly. No liability, whether direct, indirect, special,incidental orconsequential, isassumedwith respect tothe information contained herein. Informationinthispublication issubjecttochangewithoutnotice. any otherWärtsilä Group Company, assumesanyresponsibility forthecorrectness, errors oromissionsof any representation or warranty (express or implied) in this publication and neither Wärtsilä Finland Oy, nor permission ofthecopyrightholder. NeitherWärtsilä Finland Oy, noranyotherWärtsilä Group Company, makes graphic, photocopying, recording, taping or other information retrieval systems) without the prior written No partofthispublicationmaybereproduced orcopiedinanyformbymeans(electronic, mechanical, © 2020Wärtsilä Corporation –Allrightsreserved. wartsila.com/energy capacity in180countriesaround theworld. Wärtsilä has delivered 72GW of power plant efficiency andguaranteed performance. as lifecycleservicesthatensure increased management systems,andstorage,aswell comprises flexiblepowerplants,energy future-proofing theirassets.Ouroffering by optimisingtheirenergysystemsand unlock thevalueofenergytransition energy future. We helpourcustomers transition towards a100% renewable Wärtsilä Energy Business leads the About Wärtsilä EnergyBusiness
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