Balancing a 100% Renewable Electricity System, Least Cost Path for the Faroe Islands - 20-07-2018
Total Page:16
File Type:pdf, Size:1020Kb
Balancing a 100% renew- able electricity system Least cost path for the Faroe Islands 20-07-2018 Published by: Ea Energy Analyses Frederiksholms Kanal 4, 3. th. 1220 Copenhagen K Denmark T: +45 88 70 70 83 Email: [email protected] Web: www.eaea.dk 2 | Balancing a 100% renewable electricity system, Least cost path for the Faroe Islands - 20-07-2018 Contents Foreword ....................................................................................................5 1 Executive summary..............................................................................6 2 Faroese system: Data and assumptions ................................................9 2.1 Electricity demand .............................................................................. 9 2.2 Existing and committed generation capacity ................................... 11 2.3 Technology catalogue ....................................................................... 13 2.4 Transmission capacity ....................................................................... 17 2.5 Fuel prices ......................................................................................... 18 2.6 CO2 emissions policy ......................................................................... 18 3 Balmorel ........................................................................................... 20 4 Scenarios ........................................................................................... 22 5 Results .............................................................................................. 24 5.1 Generation capacity ......................................................................... 24 5.2 Hydro and pumped hydro expansion ............................................... 25 5.3 Annual generation ............................................................................ 26 5.4 Hourly operation of hydro in 2030 ................................................... 28 5.5 Transmission capacity ....................................................................... 30 5.6 CO2 emissions ................................................................................... 30 5.7 Total costs and cost of generation ................................................... 31 6 Discussion and further analyses ......................................................... 34 References ................................................................................................ 35 3 | Balancing a 100% renewable electricity system, Least cost path for the Faroe Islands - 20-07-2018 4 | Balancing a 100% renewable electricity system, Least cost path for the Faroe Islands - 20-07-2018 Foreword This project is developed for SEV, the electricity utility of the Faroe Island, and Orka, from the Environment Agency Umhvørvisstovan. The focus is in studying least costs options to develop the Faroe Island electricity system into a 100 % renewable system. A key challenge is to balance the variable wind and solar power generation in such a relatively small and isolated system. Analyses are done with the open source electricity and heat model Balmorel. With given inputs about cost and performance of alternative technologies the model simultaneously finds the optimal dispatch of the system and points at the least cost investment in new generation, that can fulfil a goal of 100 % re- newable energy in 2030. The model optimises the generation based on hourly resolution of the demand and generation. In 2015 an action plan for how to increase the share of renewable energy was published (Faroese Ministry of Trade and Industry, 2015). The report included a range of recommendations and initiatives included studies of wind, solar and tidal power, analyses of district heating, storage system, and electric con- nection to Iceland. 5 | Balancing a 100% renewable electricity system, Least cost path for the Faroe Islands - 20-07-2018 1 Executive summary The focus of this study was on how the expansions in hydro can contribute to the integration of wind and solar in the power system of the Faroe Islands. The specific expansion considered in this analysis consists of investment op- tions for additional turbines for the Mýrarnar and the Heygadal lakes, the ex- pansion of the reservoirs of both lakes and a pumping system, pumping water from the Heygadal lake to the Mýrarnar lake. Four scenarios are considered. The Main scenario would represent the refer- ence scenario in this study. Total electrification of the transport and heat sec- tor is assumed along with the assumption of zero CO2 emissions by 2030. Two sensitivies are performed on the Main scenario. The first one looks at a situation with lower full load hours (FLHs) compared the Main assumptions. The second one considers the existing hydro reservoirs less flexible compared to Main. Finally, a fourth scenario is set up where the results of the Norconsult report (Norconsult, 2018), “Hovedalternativet” are used and the hydro expansions in the Balmorel model is fixed to the numbers found in this study. The other ca- pacities are model-optimized. Main scenario In the Main scenario, the model shows an investment path where all diesel generation is replaced by wind and solar by 2030. The solar generation capac- ity is then 75 MW and the wind capacity 141 MW. In order to balance all this renewable power, the model invests in about 48.5 MW additional turbine ca- pacity and 7 GWh hydro reservoir expansion. The model also invests in a pump between the Mýrarnar and Heygadal lakes of 58 MW. Lower solar The scenario with lower FLSs for solar production shows lower solar capacities as the model finds the solar options less attractive with lower full load hours (64 MW compared to 75 MW in the Main scenario by 2030). In the genera- tion, the difference is even larger. The total costs for this scenario are only marginally larger than for the Main scenario (2% increase). Restricted hydro The restricted hydro scenario sees only 25% of the existing hydro reservoirs as useable for the balancing of the power system. The model shifts a small amount of wind power (less predictable) to solar power and installs more 6 | Balancing a 100% renewable electricity system, Least cost path for the Faroe Islands - 20-07-2018 pumping capacity. The total cost of this scenario is very close to the Main sce- nario. Norconsult scenario Compared to the Main scenario, the Norconsult scenario shows very high val- ues of storage size. This can be explained by remembering that Balmorel looks at one year at a time and in these simulations only considers a “normal hydro year”. The Main scenario therefore does not consider storing water during wet years for generation in dry years. Furthermore, the model has full fore- sight so does not have to keep hydro for reserves. The Norconsult scenario will make zero emissions by 2030 in all likely scenar- ios, including a dry hydro year. This comes at a price of about 70 million DKK additional system cost (or about 11%) compared to the optimized scenario where the zero-emission restriction will be upheld in case of a normal hydro year. 400 350 300 250 Solar Wind 200 MW Battery 150 Pumped hydro 100 Hydro 50 Gas oil 0 Fuel oil Peak demand Main Main Main Main Main Low Solar Low Solar Low Solar Low Solar Low Solar Low Norconsult Norconsult Norconsult Norconsult Norconsult Restricted Hydro Restricted Hydro Restricted Hydro Restricted Hydro Restricted Hydro Restricted 2016 2020 2024 2028 2030 Figure 1: Total capacity for the 4 scenarios for selected years between 2016-2030. Peak de- mands are indicated. The orange pumped hydro technology represents the ‘pumped hydro’ pro- ject in Miðvatn, Suðuroy. All other hydro expansions (which also include pumping) are shown as dark blue ‘hydro’. 7 | Balancing a 100% renewable electricity system, Least cost path for the Faroe Islands - 20-07-2018 800 700 600 500 400 Million DKK Million 300 200 100 0 Main Main Main Main Main Low Solar Low Solar Low Solar Low Solar Low Solar Low Norconsult Norconsult Norconsult Norconsult Norconsult Restricted Hydro Restricted Hydro Restricted Hydro Restricted Hydro Restricted Hydro Restricted 2016 2020 2024 2028 2030 Capital Cost (Old generation) Capital Cost (New generation) Capital costs (Existing Transmission) Capital Cost (New Transmission) Fixed O&M (Generation) Fixed O&M (Transmission) Variable O&M Fuel Cost Figure 2: Total annual system costs for the 4 scenarios for selected years between 2016-2030. This graph includes both model results and assumptions for costs made by SEV. It should be noted that investments in existing and committed generation is not included in this graph. 8 | Balancing a 100% renewable electricity system, Least cost path for the Faroe Islands - 20-07-2018 2 Faroese system: Data and assumptions In total, the electricity system in the Faroe Island consists of six isolated sys- tems. Here we focus on the two largest systems: Main (45,400 inhabitants) and Suðuroy (4,600 inhabitants). The remaining systems are Skúvoy (52 inhabitants), Stóra Dímun (7 inhabit- ants), Koltur (2 inhabitants), Fugloy (44 inhabitants) and Mykines (20 inhabit- ants). 2.1 Electricity demand Annual electricity de- In 2015, in Main and Suðuroy together, 314 GWh of electricity has been con- mand projections sumed. The projected classic electricity demand (excluding additional electrifi- cation in the heat and transport sectors) increases 2% annually due to eco- nomic growth and reaches 423 GWh in 2030. The classic demand projection, along with power demand projections for transport and heat are shown