White Paper on Security of European Electricity DistributionDraft 17.4.2007

Antti SilvastJoe Kaplinsky

UNDERSTAND Project meeting arranged by NESA , Finland3-4 May 2007

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Structure of the White Paper

Analysis of the European power system and review of current national and EU-wide policies on energy supply management

a view to distilling essential drivers, future trends and current best practice

Key themes Resilient systems Globalisation Sustainability Public acceptability Emergency responses

Data Surveys, literature and research articles The internal energy market country reviews by the European Commission

(all member states) The annual reports that EU member states prepare for European Regulators’

Group for Electricity and Gas (24 member states) Discussions with electricity experts Also, the ongoing PhD project of A. Silvast

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Presentation today

Technical factors Organisational factors Social factors Defining security of electricity supply Blackouts – examples and impacts Training and standards Outputs for UNDERSTAND project

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Technical factors

Expanded grids Complex and intelligent components Intermittent sources of production Ageing infrastructure

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Organisational factors

Internationalisation Privatisation Outsourcing Competition

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Social factors

Climate change and managing demand

Climate change and renewable energy

Risk: power lines and cancer Consumer sovereignty Demographics?

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Defining security of electricity supply

Electricity end-use

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Why electricity supply is critical infrastructure “Critical infrastructure include those physical resources, services,

and information technology facilities, networks and infrastructure assets which, if disrupted or destroyed, would have a serious impact on the health, safety, security or economic well-being of Citizens or the effective functioning of governments.” (Green paper On a European Programme for Critical Infrastructure Protection 2005)

Key event: Terrorist strikes towards commuter trains in Madrid in 2004

Electrical supply as a series of tightly interlocking technical and social networks.

Primary fuels, generation, transmission & distribution, end-use Commercial, legal and regulatory networks Training and professional networks A break at any point in the chain will result in disruption

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Blackouts

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Major blackouts in EU

Country, yearNo of end-users

interrupted

Duration, energy not supplied

Estimated costs to whole society

France, 1999 1.4-3.5 million,

193 million m3

wood damaged

2 days - 2 weeks, 400 GWh

11,5 billion €

Sweden/Denmark, 2003 0.86 million in Sweden and 2.4 million in Denmark

2.1 hours, 18 GWh

145 - 180 million €

Italy/Switzerland, 2003 55 million 18 hours, ? ?Sweden, 2005 0.7 million, 70

million m3 wood damaged

1 day - 5 weeks, 111 GWh

400 million €

Central Europe, 2006 15 million households

Less than 2 hours, ?

?

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Case 1: Europe 2006

Key event Disconnecting a high voltage line in Germany for the transfer of a ship

Main causes The non fulfilment of the N-1 criterion Insufficient inter-TSO co-ordination

Recommendations (UCTE) The application of N-1 criteria Transmission system operator’s defence plans Developing standard criteria for regional and inter-regional transmission system operator

co-ordination Real-time information platform of the actual state of the UCTE system Adapting the regulatory and legal framework of electricity transmission (more information

and control for transmission system operators)

Other possible issues “Short term commercial objectives” “Strict constraints through regulation” The role of wind generation

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Case 2: Italy and Switzerland 2003 Key event

Overloaded lines between Switzerland and Italy, resulting to flashovers with trees

Main causes The inability of the Swiss system operator to reclose a line The subsequent responses by the Swiss and Italian system operators

UCTE area recommendations (UCTE) Mandatory emergency procedures The application of N-1 criteria Day ahead congestion forecasts Real-time data exchange Minimum requirements for generation equipment, defence plans and restoration plans Load-frequency control strategies Wide area measurement system

National recommendations (UCTE) Enforce minimum requirements for generation units Enforce defence and restoration plans for operators Evaluate tree trimming practices The blocking of on load tap changers of transformers

Other possible issues “The opening of the electricity market” Tree trimming practices

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Case 3: Sweden and Denmark 2003 Key event

A Swedish nuclear plant shut down followed by a 400 kV substation failure in Sweden

Main cause Two major faults within 15 minute period

Recommendations (Elkraft System, Svenska Kraftnät) Planning and operational standards of the Nordic system Automatic load shedding Possible consumer disconnection Protecting the infrastructure vs. maintaining services during emergencies Strengthen restoration processes Enforce technical requirements for generators Integrated information of the whole Nordic system Communication strategies (distributors, consumers, authorities and the media ) Eliminate the risks of flashovers between two busbars Enforce inspections and scheduled replacements of critical parts Review outsourced maintenance Investments into transmission lines between Denmark and Sweden New generation to southern Sweden

Other possible issues Absent: non-problematic blackout

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The social impacts of blackouts Loss of computers, appliances, lights, electric heating,

communication, waste disposal, drinking water, sewage management and mobile phone systems

Discovering the impacts Method 1: economic product (e.g. GNP) / electricity

consumption Method 2: ask costs directly from users

• On average, higher costs than with method 1• But notable dispersion: very high costs for some users, low for

others Method 3: interview users about experiences

• Fatalism towards easy blackouts• Criticism towards difficult blackouts• Technical explanations are usually unacceptable• Nature-related explanations are usually acceptable

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Technical measures for handling blackouts Coordinated planning

e.g. Pan-Nordic process: Exchange forecasts for capacity, dimensioned faults, plans for generator shutdowns, investments in interconnections

Reserve generation capacity Return to N-1 secure state through ”fast disturbance

reserve” Maintenance engineering

Reliability centred maintenance: an optimal mix of preventive and reactive maintenance

Computerised maintenance management systems

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Demand-side measures for handling blackouts The customer’s role: awareness of “true

costs” of consumption The responses’ impacts in amount of

energy For large-scale consumers of industrial,

public sector, commercial sector and agriculture, impacts quite well-known

For household consumers, impacts are still research-in-progress

The moral and value of reducing energy use The ”life politics” of energy use: promoting

awareness of energy and energy use as life style

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Training measures for handling blackouts

Education and training for emergency response

Team working and communication

The importance of common purpose

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Standards as alternative to regulation and market protectionism The rise of market protectionism

Securing supply as political counterforce to market liberalization

The rise of regulation Higher continuity and more secure transmission and

distribution systems Bureaucratic requirements on the existing institutions

and practices Standards

Common cross-industry bench-mark knowledge standards

Security of supply requires shared tacit assumptions about common goals

A forum with industry participation

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Outputs for the UNDERSTAND project

Resilient systems Globalisation Sustainability Public acceptability Emergency responses

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Thank you for your attention

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Electricity regional markets in the EU

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Physical flows of energy in the UCTE system

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Cross-border exchanges and coordination In market-based

model, future capacity has to be estimated

Available transfer capacity for cross-border exchanges is estimated daily typical seasonal

base load flow models

On this basis, yearly, monthly, weekly, daily or intra-daily auctions of capacity are held

http://www.nordpool.com

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Outsourcing maintenance

Background: demands for competition and cost-effectiveness in public and private sector

Outsourced service can carry on with less workforce, machines and facilities (too much resources vs. just enough resources)

The activities that can be delegated outside electricity companies: Network planning Network monitoring Preventive maintenance Reactive maintenance Customer service

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Investments and personnel

Much of the present electricity infrastructure put in place in the 1950s to 1960s

a typical design life of 40 to 50 years

In EU, investments have often been reduced to a matter of internal markets, renewables and energy saving

And regulation: ”Member States must have a regulatory framework in place which supports investments.”

The number of personnel in electricity industry, especially under the age of 30, is decreasing

Year persons1990 207031991 207841992 202161993 181231994 168481995 164621996 163991997 159491998 155991999 149962000 149002001 136922002 129232003 12323

The number of personnel in electricity and district heating in Finland

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Regulation of electricity distribution and transmission The natural monopoly problem ⇒ electricity companies are

monitored and given incentives for competition Regulator as a “protector of consumer rights”

Types of regulation Electricity price caps Measuring actual and perceived levels of electricity supply quality Promoting continuity improvement of electricity companies Ensuring good supply continuity levels to consumers

A European network of independent regulators (“ERGEG+”): Structures binding decisions for regulators and relevant market

players, such as network operators, power exchanges or generators, relating to cross border issues

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Decentralised generation

Centralised systems are too large and structurally coupled?

Decentralised: electricity generation near point of use, responsive demand from the users and renewables that require no fuel supplyEfficiency + renewability +

decentralisation + security? The example of SmartGrids

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The electric power system in the EU Infrastructural modernity

(1950-2000) Large-scale transmission Central planning Monopolistic provision Long-term contracts

between producers and users

Over-investment in generation

State investment and intervention

Provision of welfare Infrastructure as project of

modernization

Neoliberal reform of infrastructure (2000-)

EU internal energy market Economic rationality as

grounds for decisions Independent power

producers Increased electricity flows

over longer distances Customer utility switching But also: tightening

regulation of electricity prices, supply quality and continuity improvement

Infrastructure as project of economic rationality and assessment

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Public acceptability of generation and fuels Much public attention on greenhouse emissions, fossil fuel

depletion and nuclear safety Even overshadowing the security of the grid: e.g. move to wind

The rise of climate change policies Restricting the choice of generation: The European Commission’s

binding target of renewable energy in the EU's overall mix to 20% by 2020

The new rise of nuclear with its low carbon emissions, stable costs and economic efficiency

Market-based mechanisms for renewable generation The EU Emissions Trading Scheme The Green Certificate Scheme

Non-market-based mechanisms for renewable generation Feed-in-tariffs State subsidies