Introduction: a European Vision

#Introduction: a European vision

*Introduction

In order to achieve EU renewable energy and CO2 emissionreduction targets, significant amounts of wind energyneed to be integrated into Europe’s electricity system.This report will analyze the technical, economicand regulatory issues that need to be addressed inorder to do so through a review of the available literature,and examine how Europe can move towardsa more secure energy future through increased windpower production.

The report’s main conclusions are that the capacityof the European power systems to absorb significantamounts of wind power is determined more by economicsand regulatory frameworks than by technicalor practical constraints. Larger scale penetration ofwind power faces barriers not because of the wind’svariability, but because of inadequate infrastructureand interconnection coupled with electricity marketswhere competition is neither effective nor fair, withnew technologies threatening traditional ways of thinkingand doing. Already today, it is generally consideredthat wind energy can meet up to 20% of electricity demandon a large electricity network without posing anyserious technical or practical problems.

When wind power penetration levels are low, grid operationwill not be affected to any significant extent.Today wind power supplies more than 5% of overall EUelectricity demand, but there are large regional andnational differences. The control methods and backupavailable for dealing with variable demand and supplythat are already in place are more than adequate fordealing with wind power supplying up to 20% of electricitydemand, depending on the specific system andgeographical distribution. For higher penetration levels,changes may be needed in power systems andthe way they are operated to accommodate more windenergy.

Experience with wind power in areas of Spain, Denmark,and Germany that have large amounts of windenergy in the system, shows that the question as towhether there is a potential upper limit for renewablepenetration into the existing grids will be an economicand regulatory issue, rather than a technical one.

For those areas of Europe where wind power developmentis still in its initial stages, many lessons canbe learned from countries with growing experience, asoutlined in this report. However, it is important thatstakeholders, policy makers and regulators in emergingmarkets realize that the issues that TSOs in Spain,Denmark and Germany are faced with will not becomea problem for them until much larger amounts of windpower are connected to their national grids.

The issues related to wind power and grid integrationmentioned in this report are based on a detailed overviewof best practices, past experiences, descriptionsand references to technical and economic assessments.

The report collects and presents detailed factsand results, published in specialized literature, as wellas contributions from experts and actors in the sector.The aim is to provide a useful framework for the currentdebates on integrating wind power into the grid.

*Turning the energy challenge into a competitive advantage

Europe is importing 54% of its energy (2006), andthat share is likely to increase substantially in thenext two decades unless a major shift occurs in Europe’ssupply strategy. Most of Europe’s oil comesfrom the Middle East and the larger share of its gasfrom just three countries: Russia, Algeria and Norway.

The European economy relies on the availability ofhydrocarbons at affordable prices. Europe is runningout of indigenous fossil fuels at a time when fossilfuel prices are high, as is the volatility of those prices.

The combination of high prices and high volatility pressuresthe energy markets, and increases the risk onenergy investments, thus driving up energy prices includingelectricity prices. The continued economic andsocial progress of Europe will depend on its ability todecarbonizes its energy mix in order to mitigate the riskto the climate, and use its indigenous renewable resourcesto mitigate the risk to its energy supply.Without reliable, sustainable, and reasonably pricedenergy there can be no sustainable long term growth.

It is essential that Europe develops its own internalenergy resources as far as possible, and that it stronglypromotes energy efficiency. Europe has always ledthe way in renewable energy capacity development,particularly due to the implementation of directives2001/77/EC and 2009/28/EC for the promotion ofthe use of renewable energy sources in the Europeanenergy mix.

Europe has a particular competitive advantage in windpower technology. Wind energy is not only able to contributeto securing European energy independenceand climate goals in the future, it could also turn aserious energy supply problem into an opportunity forEurope in the form of commercial benefits, technologyresearch, exports and employment.

The fact that the wind power source is free and cleanis economically and environmentally significant, butjust as crucial is the fact that the cost of electricityfrom the wind is fixed once the wind farm has beenbuilt. This means that the economic future of Europecan be planned on the basis of known, predictableelectricity costs derived from an indigenous energysource free of the security, political, economic and environmentaldisadvantages associated with conventionaltechnologies.

*Wind power and Europeanelectricity

Due to its ageing infrastructure and constant demandgrowth, massive investment in generation plant andgrids are required. Over the next 12 years, 360 GW ofnew electricity capacity (50% of current EU electricitygenerating capacity) needs to be built to replaceageing power plants to meet the expected increasein demand. Since energy investments are long-terminvestments, today’s decisions will influence the energymix for the next decades. The vision presentedin this document shows that wind power meets all therequirements of current EU energy policy and simultaneouslyoffers a way forward in an era of higher fueland carbon prices.

Wind energy technology has made major progresssince the industry started taking off in the early 1980s.Thirty years of technological development means thattoday’s wind turbines are a state-of-the-art moderntechnology: modular and quick to install. At a givensite, a single modern wind turbine annually produces200 times more electricity and at less than half thecost per kWh than its equivalent twenty five years ago.

The wind power sector includes some of the world’slargest energy companies. Modern wind farms delivergrid support services – for example voltage regulation– like other power plants do. Effective regulatory andpolicy frameworks have been developed and implemented,and Europe continues to be the world leaderin wind energy.

Wind currently provides more than 5% of Europe’selectricity , but as the cheapest of the renewable electricitytechnologies, onshore wind will be the largestcontributor to meeting the 34% share of renewableelectricity needed by 2020 in the EU, as envisaged bythe EU’s 2009/28 Renewable Energy Directive.

EWEA’s "Baseline" scenario for 2020 requires installedcapacity to increase from 80 GW today to 230GW in 2020. Wind energy production would increasefrom 163 TWh (2009) to 580 TWh (2020) and wind energy’sshare of total electricity demand would increasefrom 4.2% in 2009 to 14.2% in 2020. EWEA’s ”High”scenario requires installed capacity to increase from80 GW today to 265 GW in 2020. Wind energy productionwould increase from 163 TWh (2009) to 681TWh (2020) and wind energy’s share of total electricitydemand would increase from 4.2% in 2009 to 16.7%in 2020.

On 7 October 2009, the European Commission publishedits Communication on Investing in the Developmentof Low Carbon Technologies (SET-Plan)statingthat wind power would be "capable of contributing upto 20% of EU electricity by 2020 and as much as 33%by 2030" were the industry’s needs fully met. EWEAagrees with the Commission’s assessment. Withadditional research efforts, and crucially, significantprogress in building the necessary grid infrastructureover the next ten years, wind energy could meet onefifth of the EU’s electricity demand in 2020, one thirdin 2030, and half by 2050.

Meeting the European Commission’s ambitions forwind energy would require meeting EWEA’s high scenarioof 265 GW of wind power capacity, including 55GW of offshore wind by 2020. The Commission’s 2030target of 33% of EU power from wind energy can bereached by meeting EWEA’s 2030 installed capacitytarget of 400 GW wind power, 150 GW of which wouldbe offshore. Up to 2050 a total of 600 GW of wind energycapacity would be envisaged, 250 GW would beonshore and 350 GW offshore. Assuming a total electricitydemand of 4000 TWh in 2050 this amount ofinstalled wind power could produce about 2000 TWhand hence meet 50% of the EU’s electricity demand.

In June 2010 the European Commission’s Joint ResearchCentre highlighted that provisional Eurostatdata showed that in "2009 about 19.9% (608 TWh) ofthe total net Electricity Generation (3,042 TWh) camefrom Renewable Energy sources. Hydro power contributedthe largest share with 11.6%, followed by windwith 4.2%, biomass with 3.5% and solar with 0.4%." Itwent on to conclude "that if the current growth ratesof the above-mentioned Renewable Electricity GenerationSources can be maintained, up to 1,600 TWh(45 – 50%) of renewable electricity could be generatedin 2020."

Whilst the technology has been proven, the full potentialof wind power is still to be tapped. Europe’s gridinfrastructure was built in the last century with largecentralized coal, hydro, nuclear and, more recently,gas fired power plants in mind. The future high penetrationlevels of wind and other renewable electricityin the power system require decision makers andstakeholders in the electricity sector to work togetherto make the necessary changes to the grid infrastructurein Europe.

By 2020, most of the EU’s renewable electricity will beproduced by onshore wind farms. Europe must, however,also use the coming decade to exploit its largestindigenous resource, offshore wind power. For this tohappen in the most economical way Europe’s electricitygrid needs major investments, with a new, modernoffshore grid and major grid reinforcements on land.

The current legal framework, with newly establishedbodies ENTSO-E and ACER, the key deliverable of the10-Year Network Development Plan, as well as the ongoingintergovernmental "North Seas Countries’ OffshoreGrid Initiative" are all steps in the right directionand the political momentum for grid development andthe integration of renewable energy is evident.

*Wind power in the system

Wind cannot be analyzed in isolation from the otherparts of the electricity system, and all systems differ.The size and the inherent flexibility of the power systemare crucial for determining whether the systemcan accommodate a large amount of wind power. Therole of a variable power source like wind energy needsto be considered as one aspect of a variable supplyand demand in the electricity system.

Grid operators do not have to take action every timean individual consumer changes his or her consumption,for example, when a factory starts operation inthe morning. Likewise, they do not have to deal withthe output variation of a single wind turbine. It is thenet output of all wind turbines on the system or largegroups of wind farms that matters. Therefore, windpower has to be considered relatively to the overall demandvariability and the variability and intermittency ofother power generators.

The variability of the wind energy resource should onlybe considered in the context of the power system,rather than in the context of an individual wind farmor turbine. The wind does not blow continuously, yetthere is little overall impact if the wind stops blowingin one particular place, as it will always be blowingsomewhere else. Thus, wind can be harnessed toprovide reliable electricity even though the wind is notavailable 100% of the time at one particular site. Interms of overall power supply it is largely unimportantwhat happens when the wind stops blowing at a singlewind turbine or wind farm site.

*All power sources arefallible

Because the wind resource is variable, this is sometimesused to argue that wind energy per se is notreliable. No power station or supply type is totally reliable– all system assets could fail at some point.In fact, large power stations that go off-line do so instantaneously,whether by accident, by nature or byplanned shutdowns, causing loss of power and an immediatecontingency requirement. For thermal generatingplants, the loss due to unplanned outages representson average 6% of their energy generation. Whena fossil or nuclear power plant trips off the systemunexpectedly, it happens instantly and with capacitiesof up to 1,000 MW. Power systems have always hadto deal with these sudden output variations as well asvariable demand. The procedures put in place to tacklethese issues can be applied to deal with variationsin wind power production as well, and indeed, they alreadyare used for this in some countries.

By contrast, wind energy does not suddenly trip off thesystem. Variations in wind energy are smoother, becausethere are hundreds or thousands of units ratherthan a few large power stations, making it easier forthe system operator to predict and manage changesin supply as they appear within the overall system.The system will not notice when a 2 MW wind turbineshuts down. It will have to respond to the shut-downof a 500 MW coal fired plant or a 1,000 MW nuclearplant instantly.

Wind power is sometimes incorrectly described as anintermittent energy source. This terminology is misleading,because on a power system level, intermittentmeans starting and stopping at irregular intervals,which wind power does not do. Wind is a technology ofvariable output. It is sometimes incorrectly expressedthat wind energy is inherently unreliable because it isvariable.

Electricity systems – supply and demand - are inherentlyhighly variable, and supply and demand are influencedby a large number of planned and unplannedfactors. The changing weather makes millions of peopleswitch on and off heating or lighting. Millions ofpeople in Europe switch on and off equipment thatdemands instant power - lights, TVs, computers.

Power stations, equipment and transmission linesbreak down on an irregular basis, or are affected byextremes of weather such as drought. Trees fall onpower lines, or the lines become iced up and causesudden interruptions of supply. The system operatorsneed to balance out planned and unplanned changeswith a constantly changing supply and demand inorder to maintain the system’s integrity. Variability inelectricity is nothing new; it has been a feature of thesystem since its inception.

Both electricity supply and demand are variable. Theissue, therefore, is not the variability or intermittencyper se, but how to predict, manage and ameliorate variabilityand what tools can be utilized to improve efficiency.Wind power is variable in output but the variabilitycan be predicted to a great extent. This does notmean that variability has no effect on system operation.It does, especially in systems where wind powermeets a large share of the electricity demand.

*Main challenges and issues of integration

The levels of wind power connected to certain nationalelectricity systems show that wind power can achievelevels of penetration similar to those of conventionalpower sources without changes to the electricity systemin question. In mid 2010, 80 GW of wind powerwere already installed in Europe, and areas of high,medium and low penetration levels can be studiedto see what bottlenecks and challenges occur. Largescaleintegration of both onshore and offshore windcreates challenges for the various stakeholders involvedthroughout the whole process from generation,through transmission and distribution, to power tradingand consumers.

In order to integrate wind power successfully, a numberof issues have to be addressed in the following areas:

@System design and operation (reserve capacitiesand balance management, short-term forecastingof wind power, demand-side management, storage,contribution of wind power to system adequacy)

@Grid connection of wind power (grid codes and powerquality)

@Network infrastructure issues (congestion management,extensions and reinforcements, specific issuesof offshore, interconnection, smart grids)

@Electricity market design issues to facilitate windpower integration (power market rules)

Related to each of these areas are technical and institutionalchallenges. This report attempts to addressboth of these dimensions in a balanced way.

*Integration of wind power in Europe: the facts

The contribution from wind energy to power generationas foreseen by EWEA for 2020 (meeting 14-17%of the EU’s power demand) and 2030 (26-34.7%) istechnically and economically possible, and will bringwind power up to the level of, or exceeding, contributionsfrom conventional generation types. Theselarge shares can be realized while maintaining a highdegree of system security, and at moderate additionalsystem costs. However the power systems, and theirmethods of operation, will need to be redesigned toachieve these goals. The constraints of increasingwind power penetration are not linked to the wind energytechnology, but are connected to electricity infrastructurecost allocation, regulatory, legal, structuralinefficiencies and market changes, and are part of aparadigm shift in power market organization.

The major issues surrounding wind power integrationare related to changed approaches in design and operationof the power system, connection requirementsfor wind power plants to maintain a stable and reliablesupply, and extension and upgrade of the electricaltransmission and distribution network infrastructure.

Equally, institutional and power market barriersto increased wind power penetration need to be addressedand overcome.

*Wind plants: the essentials

State-of-the-art wind power technology with advancedcontrol features is designed to enhance grid performanceby providing ancillary services. Using these powerplant characteristics to their full potential with aminimum of curtailment of wind power is essential forefficiently integrating high levels of wind power. Advancedgrid-friendly wind plants can provide voltagecontrol, active power control and fault-ride-through capability.Emulating system inertia will become possibletoo. The economic value of these properties in thesystem should be reflected in the pricing in proportionto their cost.

Wind power provides variable generation with predictablevariability that extends over different time scales(seconds, minutes, hours and seasons) relevant forsystem planning and scheduling. The intra-hour variationsare relevant for regulating reserves; the hourby hour variations are relevant for load following reserves.Very fast fluctuations on second to minutescale visible at wind turbine level disappear when aggregatedover wind farms and regions. The remainingvariability is significantly reduced by aggregating windpower over geographically dispersed sites and largeareas. Electricity networks provide the key to reductionof variability by enabling aggregation of wind plant outputfrom dispersed locations. Wind plant control canhelp control variability on a short time scale.

The latest methods for wind power forecasting helpto predict the variations in the time scale relevantfor system operation with quantifiable accuracy. Aggregatingwind power over large areas and dispersedsites and using combined predictions helps to bringdown the wind power forecast error to manageablelevels in the time frames relevant for system operation(four to 24 hours ahead). Well interconnectedelectricity networks have many other advantages. Inorder to control the possible large incidental forecasterrors, reserve scheduling should be carried out intime frames that are as short as possible (short gateclosuretimes), assisted by real time data on windpower production and site specific wind conditions.