Chair of Energy Economics and Public Sector Management

EU - MENA RegGrid 2050

A “Decentral” Approach for the

Integration of Large-Scale Renewables

(LRES)

Christian von Hirschhausen, Florian Leuthold, Jonas Egerer,

Robert Wand, et al.

Enerday, TU Dresden April 16, 2010

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Agenda

1. Introduction and Background

2. Approach

3. Results

a) HVDC expansion for CSP integration

b) Influence of Scandinavia

4. Conclusion

5. References

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5 Theses

• New infrastructure emerges gradually from a nucleus or previous

infrastructure, and they do not appear from nowhere; thus, any SuperGrid,

too, will develop gradually from the existing grid.

• Regional, multi-source Super Grids are more likely to go forward than

continental, single source projects.

• The technical challenges of a large-scale renewables Super Grid are

challenging (HVDC technology, CSP, wind turbines), but the more critical

issues of implementation are regulatory and political design.

• The Desertec Super Grid project seems to have chosen the wrong technical

design, and it has substantial flaws of the institutional design.

• The EU-MENA RegGrid 2050 is a more realistic approach to achieving

similar LRES objectives; however, substantial institutional, and financial

obstacles remain.

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Classification of Different Approaches for a Super Grid

Geographic Approach

Continental Regional

Source

Single

• Zweibel et al. (2009):

Grand Solar Plan

• Trieb et al. (2009):

Characterisation of Solar

Electricity Import Corridors

from MENA to Europe

-

Multiple

• Trieb et al. (2006):

Trans-Mediterranean

Interconnection for

Concentrating Solar Power

• AWEA, SEIA (2009)

Green Power

Superhighways

• Krapels et al. (2009):

Integrating 200,000 MW of

RES into the US power grid

• Hirschhausen et al. (2009):

EEA- MENA RegGrid 2050

Integration of Large-Scale

Renewables

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The DESERTEC Project

• Concept based on Med-CSP (Trieb et al., 2005), Trans-CSP (Trieb et al., 2006),

• Recent study (Trieb et al., 2009) examines possible HVDC corridors from MENA

for EU wide integration of CSP

• Some unaddressed issues:

- No incentives to connect point to point HVDC connections to the right nodes

(price signals, multiple TSOs involved, national renewable targets)

- Special characteristics of electricity networks (loop flows, constraints) and

fluctuation of renewable generation not addressed

- Interdependency of Desertec approach with other developments not

sufficiently addressed (offshore-wind in north sea, balancing power, etc.)

Source: Trieb et al. (2009)

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Agenda

1. Introduction and Background

2. Approach

3. Results

a) HVDC expansion for CSP integration

b) Influence of Scandinavia

4. Conclusion

5. References

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Challenge: Integrated Economic Engineering Approach

• Optimization problem:

• Renewable energy:

• Engineering:

• Raised questions:

Maximizing total welfare for EU30+

with a DC load flow model.

Interaction of LS hydro, wind and solar electricity

generation.

Economic assessing of HVDC integration for MENA

CSP generation to EU30+.

What should the process of CSP integration look

like?

Does a stronger integration of the Scandinavian

market change the results?

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Original ELMOD

• Model of the Western / Central European UCTE network with 2120 nodes and 3243 lines

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• Model of the EU30+ network with 105 zones and 1230 lines

• 105 demand and generation nodes

• Simplified AC grid

• Reference year with 24 states

Season

Daytime

Demand

Wind generation

• Seasonal storage (reservoirs)

• Objective: Welfare maximization

for the entire system

Adjusted ELMOD

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• Three export nodes in the MENA region (Morocco, Tunisia and Middle East)

• Possible HVDC connection to 30 demand centers in the EU30+

• Line costs according DLR cost-distance images (Trieb et al., 2009) - 4GW cables

Model obtains the optimal HVDC connections for 2020, 2030, 2040 and 2050

Welfare Optimizing HVDC Expansion from MENA

Evaluation of the HVDC expansion path for CSP integration.

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• Demand increase to 4.200 TWh/yr in 2050

• Gradual decrease of fossil fuels in the electricity sector due to increasing generation capacities of RES

• Exogenous CSP generation expansion

• CO2-price 2050: 100 €/t-CO2

• Escalation rates fuel prices:

• Oil and gas: 2.5 %/yr

• Coal: 1.0 %/yr

Assumptions

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Agenda

1. Introduction and Background

2. Approach

3. Results

a) HVDC expansion for CSP integration

b) Influence of Scandinavia

4. Conclusion

5. References

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HVDC Expansion for CSP integration

2020 2030 2040 2050

Morocco 1 1.9GW 2 7.8GW 5 18.5GW 9 32.7GW

Tunisia 1 1.4GW 4 5.7GW 4 13.4GW 6 23.6GW

Middle East 1 3.5GW 4 14.4GW 9 33.9GW 15 57.5GW

• Expansion based on

welfare maximization:

Electricity prices

Transmission costs

Grid congestions

Demand

• CSP profitable in 2030

• Calculated

transmission costs

of about 1 cent/kWh

• Additional gains in total

welfare

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Investment Analysis CSP MENA

• Generation: 425 billion €

• Transmission: 55 billion €

• Total Investment: 480 billion €

• Starting in the early 2030th, CSP from the MENA region becomes competitive on

the European electricity market.

Investments in pilot projects and large scale CSP in MENA before 2030 has to be

financially supported

In addition to export capacity, capacity building for MENA domestic markets is of high

importance

Billion €

CSP Investment Transmission Investment

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Influence of Scandinavia

• Evaluation of the integration of the Scandinavian market and continental Europe/

the UK

• Additional exogenous HVDC connections:

- Integration of Scandinavian reservoirs

- Balancing of wind power

- Shift in electricity prices

Change in the HVDC expansion and profitability for CSP?

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• Expanded inter-connection of the markets shifts prices

- Price increase for Scandinavia of 4 cent/kWh

- Price decrease for rest of Europe 0.5 - 1.0 cent/kWh

• No influence on HVDC corridors before 2050

• CSP profitability delayed due to lower prices

also in southern Europe

• Welfare increase outweighs costs of

transmission investment in inter-connections

Influence of Scandinavia

[cent/kWh]

Northern zones

Southern zones

Integration of Scandinavia influences CSP integration.

Price difference through

better market integration:

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Agenda

1. Introduction and Background

2. Approach

3. Results

a) HVDC expansion for CSP integration

b) Influence of Scandinavia

4. Conclusion

5. References

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Conclusion

• Transmission

- HVDC connections for CSP integrations to closer markets (southern Europe)

- Existence of alternative large scale renewable energy sources other than CSP

avert integration in CSP supply, e.g. regions with high shares of wind or hydro

power are not supplied

• Profitability

- Dependent on scenarios (2030 reasonable for increasing CO2 prices)

- Possible delay in case of strong integration of the Scandinavian market (price

shifts)

- Subsidies for CSP in some MENA countries with cheap natural gas availability

might be required after 2030

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Agenda

1. Introduction and Background

2. Approach

3. Results

a) HVDC expansion for CSP integration

b) Influence of Scandinavia

4. Conclusion

5. References

- 20 -

References

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