Vattenfall
Renewables will change the 2020 electricity mix
Credit: Vattenfall
Giuseppe Lorubio  
Variable renewable resources are set to fundamentally reshape the European electricity system according to Giuseppe Lorubio of Eurelectric.

Fancy a chat about power statistics? For most people the answer is likely to be a resounding no.

Collecting statistics, validating data, ironing out rounding differences and inconsistencies, minutely analysing past trends to extrapolate into the future – all this may not be everybody’s cup of tea.

Yet as speakers at a recent event in the European Parliament pointed out, sound data are prerequisite for any serious, grounded energy policy that wants to build on the solid foundations of past trends to inform future investments and business decisions.

“Policies must be based on actual state of the art, which can only be defined by quality data gathered by professional researchers,” states Member of the European Parliament Dr. Romana Jordan while unveiling the latest edition of the annual statistics gathered by European power industry association Eurelectric. Her words met with approval from industry representatives but also from speakers from the International Energy Agency and the European Commission’s statistical arm Eurostat.

How can policymakers – and businesses for that matter – measure and evaluate success? How do they know whether political choices such as the liberalisation of the power sector, the introduction of stricter emission control systems for combustion plants or the launch of a renewable policy have had their intended effects?

Ultimately, the answer can be found in numbers: in the capacity being added to the power system, in the share of power generated by different technologies, in the evolution of electricity demand. In short, the sums must add up.

This knowledge is particularly important in these times of arguably unprecedented challenges: the rise of variable renewables and the corresponding need for firm back-up capacity, the threat of unmitigated climate change and the efforts of integrating new, smart ICT technologies into power grids.

In such times, sound data can make all the difference between a successful political initiative and one that is doomed to fail.

Siemens
Fossil fuels remain the ‘backbone’ of Europe’s power system
Credit: Siemens

This explains why we and the experts from our member associations scattered across Europe expend a lot of effort in providing up-to-date and timely quality data: they are simply indispensable to understanding how our sector is developing and communicating these views to European policymakers.

In fact our organisation has been collecting and publishing data from the electricity sector since the early 1970s, well before European energy policy as we know it today came into being. The latest edition of Power Statistics and Trends was published in December 2012 and officially presented at the European Parliament in January 2013. So what are its main findings?

Rollercoaster demand

After decades of rising electricity demand the European electricity sector has faced the same strong headwinds that have shaken up the economies of the region.

Following a partial recovery in 2010 from the lows reached in 2009, power demand in Europe fell again in 2011 as economies remained entangled in a prolonged sovereign debt crisis and the shockwaves of the financial and economic crisis continued to reverberate across the continent. Electricity demand broadly mirrors the pattern of GDP. It showed a decline from 3132 TWh in 2010 to 3073 TWh in 2011, a fall of 1.9 per cent. What does this short-term rollercoaster behaviour entail for the long-term fortunes of the power sector?

Overall electricity demand in the European Union (EU) is forecast to grow by 0.6 per cent per year until 2020, reaching 3327 TWh in 2020. However, demand growth will be uneven across Europe.

Siemens
Renewables accounted for 34 per cent of EU installed capacity in 2011
Credit: Siemens

Of the member states that joined the EU between 2004 and 2007, all except Slovenia show stronger power demand growth than the ‘old’ members. Bulgaria and Slovakia are projected to increase their electricity demand by 6 per cent and 3 per cent per year, respectively, followed by the Czech Republic, Lithuania, Latvia, Poland and Romania, with about 2 per cent annually.

Conversely power demand in other countries – notably Germany, Portugal and the UK – will actually decrease by between 0.2 per cent and 1 per cent a year, while power demand in Sweden will flatten out and decrease by 0.04 per cent per annum. But a word of caution is warranted.

Amid ever changing macro-economic conditions, and in light of the ongoing transition of the energy system at large, forecasting electricity demand up to 2020 and beyond is proving extremely difficult. In fact it is often erratic.

For instance, this year’s forecast for EU electricity demand by 2020 is about 4 per cent lower than last year’s more bullish view, which predicted a figure of 3467 TWh.

Low-carbon capacity

Renewable energy capacity in the EU increased yet again in 2011, reaching 34 per cent of the total installed. Despite the economic crisis, 25 GW of renewable capacity including hydro was connected to grids in 2011.

With demand shrinking, it would appear that this new renewable capacity has arisen as a result of subsidies put in place by EU governments to hit the 20 per cent target agreed in the EU Renewable Directive (2009/28/EC), rather than as a result of market conditions.

Eurelectric
Installed capacity evolution in EU-27 Credit: Eurelectric, Power Statistics 2012
Eurelectric
Generation comparison, 2011 & 2020 Credit: Eurelectric, Power Statistics 2012

In contrast, nuclear energy, the EU’s second source of low-carbon electricity, experienced a marked decline in capacity in 2011, reflecting the effects of Fukushima and the subsequent decision by some countries to revise their nuclear policy – most notably of those are the German phase-out programme and the anti-nuclear referendum in Italy.

Indeed, in the wake of the events in Japan of March 2011 the Merkel government put an immediate halt to 8.4 GW of German nuclear capacity.

While capturing the most public attention, these high-profile developments obscured the fact that 1 GW of nuclear capacity was nevertheless added elsewhere in the EU, mainly as a result of the repowering of plants’ equipment, such as turbines.

Despite the rise of low-carbon generation, fossil-fired power plants still represent the backbone of the region’s power system.

These are mainly gas, but also coal and form 52 per cent of total installed capacit

Eurelectric
Electricity demand, including network losses in EU-27, 2000-11 Credit: Eurelectric, Power Statistics (various editions)

A combined capacity of 1 GW was added in 2011. However, by 2020 renewables are set to overtake fossil fuel-fired plants as the largest generation technologies, reaching 44 per cent of total installed capacity.

Together with nuclear, they will provide a low-carbon power plant base of 56 per cent of installed capacity. This is a significant step forward towards reaching a low-carbon electricity sector in the region by 2050 and building on a diversified mix that will include renewables and nuclear plants, and fossil fuel plants fitted with carbon capture and storage.

Renewables rebalances

Most renewable technologies depend on the weather, as is often discussed in the case of variable renewable resources (vRES) such as wind and solar, but it also holds true for hydropower.

Adverse weather in 2011 led to low water availability, prompting a sharp decline in hydropower of almost 60 TWh – or 17 per cent year on year – most notably in Spain and Portugal, which saw a reduction of 27 per cent each compared with 2010.

The drop was partially compensated by an increase of 47 TWh (or 16 per cent year on year) from other renewables. Renewable energies other than hydro now account for 11 per cent of total generation, up 3 percentage points from 2009 and 1 percentage point from 2010.

Driven by the German shutdown, nuclear generation fell by 1.8 per cent in 2011, a drop of 16 TWh.

The fall occurred despite good performance from nuclear plants in other European member states.

For instance, nuclear generation was up by 16 per cent in Romania, 13 per cent in Bulgaria, 11 per cent in the UK and 6 per cent in Slovakia compared with 2010, mainly driven by a higher availability of power plants.

Fossil fuel-fired generation was also down by 50 TWh, or a fall of 3 per cent year on year, but, as in the case of nuclear, its share of total generation remained stable.

Looking towards 2020, the structure of the electricity mix will change towards increased renewable generation, with output from renewable energies other than hydro more than doubling from 340 TWh to 708 TWh in 2020 and providing 20 per cent of electricity generation.

Hydro will still cover 11 per cent of total electricity needs, bringing the total share of renewables to 31 per cent, while nuclear will account for 25 per cent. The share of low-carbon electricity generation will thus reach 56 per cent.

These changes will occur at the expense of fossil fuel-fired generation, which is now expected only to contribute 44 per cent by 2020, compared with the previously predicted 46 per cent of last year’s forecast.

Managing variability

The expected increase in variable renewable capacity will imply major changes in the way the electricity system is run. A holistic approach to managing Europe’s power sector will therefore urgently be needed, including an increasing role for flexible generation, storage and demand-side participation, a better allocation of transmission capacity, and reinforced transmission and distribution grids.

Energinet.dk
Correlation between wind generation and electricity spot prices in western Denmark (01/01/10 and 27/09/12) Credit: Energinet.dk
Energinet.dk
Wind generation in Denmark and interconnection patterns with Norway and Sweden (2-8 June 2011) Credit: Energinet.dk
Energinet.dk
Wind generation in Denmark and interconnection patterns with Norway and Sweden (25-31 December 2011) Credit: Energinet.dk, figure elaborated by Dong Energy

In this context, the report for the first time includes an investigation of the effects of renewables variability and the resulting system requirements for greater flexibility. Data from Germany and Denmark, in particular, on maximum, minimum and average generation for wind and solar show the intrinsic variability of some renewables.

For instance, out of a total generation of 29 GW and 4 GW, respectively, the average contribution of wind farms was 18 per cent in Germany, corresponding to 5.1 GW, and 28 per cent in Denmark, or 1.1 GW. The data on maximum generation from vRES provides an indication of how many wind turbines were generating electricity at a given time. In Germany, 78 per cent were feeding power into the grid at once; in Denmark, 89 per cent.

Furthermore, upward and downwards movements of vRES output in Germany show that a great deal of flexibility is needed to cope with ramps that can reach 15 GW in the space of a few hours. Considering that these data are a snapshot of electrical systems in which vRES, although growing, often still play a limited role, variability and the resulting flexibility needs will become even more significant in the next decades as the share of vRES reaches new heights.

Concluding the section on vRES and flexibility, the report also shows that wind power effectively depresses the Danish electricity spot price. The higher the wind feed-in here, the lower the Danish spot price. This downward pressure affects power plants across the whole value chain, questioning the rationale of price formation. In particularly extreme cases, negative spot prices can occur, also calling into serious question the business case for the operation of existing gas-fired power plants , not only in Denmark but at a wider European level.

The relative wind feed-in also alters the dynamics of power flows between Denmark and its northern neighbours, whose vast hydropower reserve it shares.

When Denmark experiences sustained wind generation, the country exports power to Sweden and Norway. Conversely, when wind generation drops, the flow in the interconnectors is reversed and Denmark becomes an importing country.

In sum these data provide a first indication of just how much the rise of vRES is set to fundamentally reshape the European electricity system in the years to come.

Giuseppe Lorubio is an Energy Policy & Generation Advisor at Eurelectric, which is a Brussel-based association that represents the common interests of the electricity producers, suppliers, traders and distributors at a pan-European level, For more information, visit www.eurelectric.org

More Power Engineering International Issue Articles
Power Engineering International Archives
View Power Generation Articles on PennEnergy.com