Knowledge Article

Knowledge Article

  • e-Highway 2050: A methodology to define power technologies expected to impact grid architecture studies at 2050

    Author: Eric Peirano, Athanase Vafeas

    A methodology to identify power system technologies likely to impact grid planning studies in a pan-European context over a period running until the 2050 time horizon is proposed.In a context of energy scenario thinking, the technology portfolio is de

    Challenge
    The main challenge relates to the identification and selection of power system technologies expected to impact grid planning studies in a pan-European context at 2050:
    - How to define a portfolio of power generation, storage, demand-side and power transmission technologies at the 2050 time horizon impacting the European transmission grid?
    - How these power technologies are consistent with the defined eHighway2050 scenarios?

    Background and assumptions 
    This knowledge article is to be read in the general context of the e-Highway2050 project. In this project, an energy-scenario approach was adopted and five energy scenario projections of likely futures are expected to grasp all likely evolutions of the power system at 2050. The methodologies to define these scenario  and their quantification are detailed in parallel knowledge articles. The five retained eHW scenarios are described in the knowledge article “Challenging energy scenarios for the pan European transmission system by 2050”.

    More particularly, it is written in the particular context of the power system technology characterization. The scope of power system technologies covers the whole electricity value chain from generation and storage, transmission (passive  and active transmission technologies) to demand.

    Description of the resuls
    The technology component of a grid planning approach is indeed of prime importance. In e-Highway2050 project, a technology assessment has been made to provide techno-economic data to the grid simulations. It is clear that the selection of technologies to be considered will influence these simulations at various levels: the level of electricity demand and the nature of the generation mix, the grid architecture options and the types of reinforcements. It consists in the construction of a database displaying data (i.e. technical performances, costs, environmental impact, etc.) that characterizes the different technologies for the next four decades, i.e. from today to 2050.

    In an energy context dominated by renewable energy sources in Europe (scenario 100% RES electricity), it is expected that renewable energy sources, since widely adopted and integrated  in the power system, will see their maturity and cost trajectories positively impacted. In terms of transmission system reinforcements, the two complementary options that are the addition of new transmission links (new lines, new cables in AC or DC) and the increase of power flow controllability will be considered at a degree depending on the energy scenario at 2050.

    Not all power system technologies need to be detailed in-depth at the 2050 time horizon. Some of them might remain marginal (not mature or too costly) or simply not relevant to the scenario. To illustrate such issue of relevance of a technology to a scenario, let us take an example.  The “Large scale RES and no emissions scenario” (X5) is characterized by some key features.

    Since large-scale offshore wind parks in the North Sea and Baltic Seas or implementation of transcontinental liaisons with North Africa might be needed, it is likely that generation technologies such as Off-shore wind power, PV, CSP or HVDC transmission technologies will be critical.
    On the same way, since for that scenario Electrification of Transport, Heating and Industry is considered to occur both at centralized (large-scale) and decentralized (domestic) level, it is likely that demand-side technologies  such as EVs or heat pumps will be needed.
    Last but not least, nuclear technology as a centralized technology is to be included in the technology portfolio as a technology in the generation mix for the same scenario “Large-scale RES and no emissions scenario” (X5). Technology selection will have to be consistent with the scenario-based approach followed by the project and considered sufficiently mature and deployed at the considered time horizon by the pool of technology experts in charge of the selection process.

    The result is therefore a technology selection approach considering two series of inputs:
    - all power technologies likely to impact a grid planning approach at a mid- or long-term time horizon
    - the five e-Highway2050 scenarios.

    1. Rationale of selection
    The technology portfolio of power system technologies is defined upon selection criteria that are based on their possible impact on transmission networks with regard to planning issues by 2050.  For example, typical transmission technologies solutions include AC interconnections, DC interconnections, hybrid AC/DC interconnections, or Power Electronics to better control flows over long distances.  

    More specifically the retained selection criteria include the relevance for grid planning at the considered time horizon, the validation that the technology is a contributor to the scenario (as a result of its commercial maturity).
    For each technology area, a review of all technologies has been made with the support of technology experts which led to the e-Highway2050 technology portfolio.
    For generation, storage and transmission area, the technology portfolio has been constructed based upon experts’ views.
    For demand-side technologies, a specific methodology has been proposed on the basis of the criticality induced by the future demand-side technology changes, impacting the transmission system at 2050.

    The selection and more generally the data gathering process for generation and storage technologies was mainly carried-out by a professional association, partner of the project (Eurelectric with its subcontractor VGB Power Tech) and an academic institution (University of Comillas) for electrochemical storage  technologies.
    A professional association (EWEA, European Wind Energy Association) delivered the data for wind energy. 
    The Institute of Power Engineering (IEN) completed the data sets for generation with specific data related to biomass-fired CHP (combined heat and power) plants.
    The data gathering process for demand-side technologies (electric vehicles, heat pumps and lighting) was performed by TECHNOFI.
    For transmission technologies, data was provided by T&D Europe for active transmission technologies (HVDC converters, FACTS, transformers, etc.), Europacable for cables (passive transmission technologies) and a pool of TSOs (RTE and Amprion), partners of the project, for overhead lines (passive transmission technologies).

    2. The e-Highway2050 technology portfolio
    As a result, the database is organized per technology, listed hereafter:
    - generation and storage technologies: hydropower; PV; concentrated solar power; wind power; geothermal; gas turbines; hard coal and lignite with or without CCS (Carbon Capture and Storage); nuclear power; biomass and biogas; pumped-hydro; CAES (Compresssed Air Energy Storage); electrochemical storage;
    - demand-side technologies: electric vehicles; heat pumps; lighting (Light Emitting Diodes and Organic LED);
    - passive transmission technologies: high voltage (HV)AC  and DC cables (AC and DC submarine and AC and DC underground); HVAC and DC overhead lines; high temperature conductors; combination of HVAC/HVDC transmission solutions; gas insulated lines; superconductors;
    - active transmission technologies: converters for HVDC (CSC and VSC); FACTS (shunt and series); phase shift transformers and transformers with tap changer; protection and control at substation and at system level.

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    Figure 1. Technological scope of the e-Highway2050 technology database

    3. The technology portfolio and the energy- scenarios
    For each scenario at 2050, the technology challenges and thus the technology portfolio are different.
    Let us consider as an example the “100% electricity RES” scenario. It is indeed an extreme scenario with 100% RES penetration which presents specific technological challenges mainly in renewable electricity generation, but also in the demand side in energy efficiency, new uses and electricity storage while increased power transmission needs are expected.

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    Table 1. Key features of the “100% RES electricity” scenario and associated technologies

    More generally, for the five considered scenarios an overview in terms of criticality is presented below.

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    Table 2. Criticality of challenges for the technology area for each e-Highway2050 scenario.

    Criticality index can thus be used as a direct filter to get the final technology portfolio from all possible technology options displayed in Figure 1 (e.g. filtering out the technologies rated ++ or +).

    Assessment of the methodology use and limitations 
    Such approach could be easily reproduced on different energy scenarios when reassessing the Table 2 on the criticality of technologies per energy scenario. It could be easily reused to any other issues of technology assessment in an uncertain context for which technologies play a crucial role. The prerequisite is the availability of technology roadmap competences via experts from academic or industry.

    References
    Deliverable D3.1 eHighway2050

  • e-Highway 2050: Performance and cost database of a portfolio of power system technologies expected to impact grid architecture studies at 2050

    Author: Eric Peirano, Athanase Vafeas (DOWEL)

    A technology assessment of available and commercially mature power system technologies at 2050 is made. It is presented in the form of a techno-economic database displaying data (i.e. technical performances, costs, environmental impact, etc.) that chara

    Challenge
    The main challenge relates to the technology assessment for the grid architecture of the pan-European transmission system at 2050:
    - How to define a portfolio of technologies at the 2050 time horizon impacting the European transmission grid?
    - How to characterize trajectories of performances and costs of each identified technology at that time horizon?
    - How these trajectories are consistent with the defined e-Highway2050 scenarios?

    Background and assumptions 
    The technology assessment for the grid architecture is included in the framework of the general e-Highway2050 process based on energy scenario projections of likely futures for the power system at 2050. More specifically it follows the power spatial localization (Generation/Demand/Exchanges) for each scenario, at country and cluster level, the general objective being to identify the possible weak points, the congestion points in the transmission grid, in case of absence of reinforcement.

    In order to identify grid architectures in 2050 solving the congestions, it is needed to further investigate cost and performances of power system technologies likely to impact long-term grid planning issues. Deliverable 3.1 of e-Highway2050 deals with the assessment of the most impacting technologies for the power system in the EU28 at the 2050 time horizon.

    The scope of power system technologies covers the whole electricity value chain from generation and storage, transmission (passive and active transmission technologies) to demand.

    Description of the result
    Building a technology characterization database
    The definition of the future grid architectures in 2050 solving the congestions is based upon a technology assessment of available and commercially mature power system technologies at 2050.

    Such assessment consists in the construction of a database displaying data (i.e. technical performances, costs, environmental impact, etc.) that characterizes the different technologies for the next four decades, i.e. from today to 2050. Key issues of the database building relate to the technologies that are expected to be widely used in a long-term horizon, to the type of data that will be needed, and to the intrinsic uncertainty at that remote time horizon. These three major issues have been addressed in parallel through three main axis of effort: the technology selection and related data gathering, the template of the data gathering according to data types and the modalities to manage uncertainty.

    The techno-economic database consists therefore in three building blocks which could be represented by the three dimensions depicted in the figure below.
    - The wideness of technology areas is illustrated in brown color for the four considered technology areas (generation, storage, transmission and demand-side technologies).
    - The depth of the database is represented in blue color with examples of variables characterizing the selected technologies, including technical performances and costs at 2050.
    - A degree of uncertainty represented by the vertical axis: each data or range of data at the intersection of the horizontal plane (one technology X one variable) is qualified by a qualitative degree of confidence resulting from its uncertainty. This degree is estimated in the context of the five scenarios of the e-Highway2050 project.

    The technology database could be seen as composed by records for each intersection point “Technology area X characterization variable” including either:
    - quantitative data, i.e. precise values or ranges of values according to the degree of uncertainty,
    - and, in a separate document, a description of assumptions and models used by experts, or qualitative data, i.e. data relative to the maturity of an innovation for a technology.

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    Figure 1: The three dimensions of the e-Highway2050 technology characterization database

    It should be noted that the technology portfolio identification and selection is detailed in the knowledge article related to e-Highway 2050:  a methodology to define power technologies expected to impact grid architecture studies at 2050, and the management of data uncertainties and the contextualization according to scenarios is presented in the knowledge article related to e-Highway 2050:  Management of uncertainties and data contextualization in the framework of the technology assessment of power system technologies expected to impact grid architecture studies at 2050. In the following, the focus is on the architecture of the database (including the characterization variables).

    The whole construction of the techno-economic database is the result of a collective work under the management of TECHNOFI and involving key European stakeholders of the electricity value chain (manufacturers, TSOs, academia). 

    Architecture of the technology characterization database and characterization variables
    The database architecture consists in the definition of a list of key variables to be considered in order to characterize a given technology. The database is organized per technology (variant) and sub-technology (1), when relevant. For each technology, a set of variables is documented on costs, performances and other characteristics. These variables are organized according to a set of data types detailed in Table 1. For each variable a value is given for each decade: today (2013), 2020, 2030, 2040 and 2050.

    This architecture is found in all data sheets (Excel files) supplementing the Technology Assessment Report (Word file). The set of Excel files constitutes the technology database.

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    Table 1: Architecture of database per data types
    Within this general framework, the most impacting variables describing technologies in a given technology area are detailed in the following sections. The two data types  - technology performance characteristics and costs (2) - are the ones that have been detailed in-depth since of the highest interest for the power system simulations to be performed by the project.

    Assessment of the methodology use and limitations
    Beyond the values and records included in the techno-economic database, one key value of the result is in its methodological dimension, e.g. it provides statements and assumptions in a modular way to rerun the various methodological blocks, e.g.: 
    - to recalculate future costs of transmission technologies based on different archetypes or different breakdowns of cost or different laws of evolutions of indices
    - to re-contextualize data according to new 2050 scenarios
    - to add non considered technologies beyond the current e-Highway2050 technology portfolio.
    Beyond the e-Highway2050 project time horizon and scope, such approach could thus be used in further grid planning studies at national or EU levels.

    References
    Deliverable D3.1 e-Highway2050

    Glossary used in the article  
    - Database: A comprehensive set of data for each decade (from today to 2050) characterizing power system technologies (organized per technology and data type).
    - Data type: Classes of data such as technical performances, environmental impact and public acceptance, costs (there are eight data types).
    - Datasheet:Excel file including a set of data for one technology retained in the e-Highway2050 scope. It is related to a Technology Assessment Report (TAR).
    - TAR: Report detailing the assumptions and comments relative to the data displayed in the datasheet(s).
     

    Notes
    (1) For example, wind power (technology or variant) is divided into two sub-technologies, i.e. on-shore and off-shore.
    (2) the construction of future cost trajectories for transmission equipment based on their today’s estimated cost which is detailed here.

  • GRID4EU Demo 4: Increase the Medium Voltage (MV) network's hosting capacity for DER introducing Active Control and Demand Response of DER (generators, controllable loads and storage)

    Started in November 2011 for a duration of 51 months, the Grid4EU project lays the groundwork for the development of tomorrow's electricity grids. Grid4EU consists of six large-scale demonstrations (one per DSO leading the project), which will be test

    Within the Grid4EU project, the Italian DEMO4 is located in the Forli-Cesena area (Emilia Romagna region), which is a rural area with high renewable energy integration, mostly photovoltaic (about 40 MW, with 24 medium voltage producers over 500kW), along with low consumptions and power quality issues related to an aging infrastructure. The local distribution network is particularly representative of the southern Europe.

    As a matter of fact, because of the reversion of unidirectional flows (since the existing grid is designed for mono-directional flows), the connection of high numbers of DERs might cause low power quality, imbalance between load and generation, protection problems and congestion in MW network. DEMO4 is focused on load-flow optimization at local level with the implementation of an advanced Power Flow Control (PFC) system to increase the hosting capacity of the MV network and maximize the integration of DER into distribution grids. The demonstration will be performed under the coordination and management of ENEL Distribuzione, with the collaboration of other DEMO4 partners: CISCO, RSE, SELTA and SIEMENS AG. Active Control of DER, Demand Response, controllable loads and integration of small-scale storage will be tested under real operating conditions and on large scale.

    In order to achieve the earlier mentioned objective, the DEMO4 will:
    - Implement Voltage Control in MV networks;
    - Manage efficiently and reliably the Disconnection of DER when islanding operations occur;
    - Enable ancillary services provided by DER for MV Network operation;
    - Test and assess possible services provided by storage to the grid;
    - Enable the dispatching of renewable generation on the MV network;
    - Review MV DER connection criteria.

    For implementing the Active Control of DER, the project will deal with:
    - the realization of an advanced Power Flow Control (PFC) system communicating with renewable generators, Primary Substations (HV/MV), Secondary Substation (MV/LV) and storage facility;
    - the realization of an “always on” IP standard-based communication infrastructure for real-time data exchange  by using IEC 61850 standard, both wireless and wired technologies;
    - the installation of a storage facility (1 MVA / 1 MWh) with possibility to switch over seven MV lines of the primary substations involved.

    Moreover, a customer recruitment and selection campaign is needed to realize the demonstrator objectives in terms of consumer behaviour (agreements with active and passive customers potentially interested).
    The overall architecture of the main objects involved in the demonstrations is sketched in Figure 1.

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    Figure 1. Sketch of DEMO4’s overall architecture

    More precisely, the architecture of the Demo4 in the SGAM framework is showed in Figure 2.

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    Figure 2. DEMO4 System Architecture (SGAM framework)

    Table 1 below shows the manufacturer/developer partners related to each system. It has to be noticed that the system architecture is composed by several systems, which are, in turn, an aggregation of ICT devices and equipment for grid operations.

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    Table 1: Manufacturer / Developer related to each system with DEMO4

  • GRID4EU Demo 2: Monitoring and control of LV networks using Smart Grid and AMM technology for more distributed generation and improvement of customer power quality

    Started in November 2011 for a duration of 51 months, the Grid4EU project lays the groundwork for the development of tomorrow's electricity grids. Grid4EU consists of six large-scale demonstrations (one per DSO leading the project), which will be test

    Within the Grid4Eu project, the Swedish DEMO2 is located in the Uppsala area, situated 70km north of Stockholm, and target innovative distribution network operations, with a focus on distribution network monitoring technologies and consumption data gathering. Approximately 14,000 customers supplied from 145 secondary substations will be included in the project. It will validate that the LV network monitoring and control using Advanced Meter Management (AMM) technology allows for an increased integration of DER while improving customer power quality. The demonstration is performed under the coordination and management of Vattenfall, with the collaboration of other DEMO2 partners: ABB, eMeter, KTH Royal Institute of Technology and Schneider Electric.

    The first step towards Smart Grid and Smart Meters utilisation was taken when Automatic Meter Reading (AMR) was introduced to all Vattenfall’s customers in Sweden several years ago. The demonstration project DEMO2 is to be considered as the second step in the implementation and development of AMM technology integrated with advanced Meter Data Management System (MDMS) and Supervisory Control And Data Acquisition (SCADA) / Distribution Management System (DMS) together with Remote Terminal Units (RTUs) in the secondary substations. The outcome of the project will have a significant impact on future implementation of Smart Grid technology. By choosing the right technology, system support, set-up and communication infrastructure when implementing AMM and Smart Grids, this demonstration project will show suitable short cuts for coming AMM and Smart Grid implementation and simplify a realization of step 2. This will have a prominent effect of minimising the future investment costs in the area of AMM and Smart Grid utilisation. The general architecture of the DEMO2 is presented in the schematic image below.


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    Figure 1. General architecture of DEMO2.

    The SCADA/DMS with associated peripherals working with various communication channels is technical novelty for monitoring and improving operation quality for existing and new LV grids. The system is physically built up by one pivot SCADA/DMS positioned in a control centre connected to various RTUs located in secondary substations. The system forms part of a test environment consisting of the existing Vattenfall electrical network and communication infrastructure or new links when applicable and also the new MDMS and AMM systems provided by the project partners Telvent and eMeter.

    SCADA/DMS system will use data collected by RTUs in secondary substations and mutually agreed and defined data received from MDMS and AMM systems connected to the DEMO2. The SCADA/DMS system will also deliver mutually agreed and defined data to participating MDMS and AMM. The SCADA/DMS system with peripheral RTUs will perform the Test and Analyze sequence during fully two years up to 2015 subsequent an initial two years period for design, installation and commissioning.

    The simplified image below illustrates the RTUs in the secondary substations communication with SCADA/DMS.

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    Figure 2. RTUs in the secondary substations communication with SCADA/DMS.

  • e-Highway 2050: A methodology for building future costs of transmission technologies in the framework of the technology assessment of power system technologies expected to impact grid architecture studies at 2050

    Author: Eric Peirano, Athanase Vafeas (DOWEL)

    A methodology to build cost trajectories of transmission technologies over a period running until the 2050 time horizon is proposed. Technological scope includes HVAC, HVDC interconnections, lines and cables, converters and FACTS. It relies upon a mode

    Challenge
    The main challenge relates to the building of cost trajectories until 2050 for a selection of transmission technologies relevant for the power system and consistent with the defined e-Highway2050 scenarios.

    Background and assumptions 
    In the general context of the technology assessment of the most impacting technologies for the power system in the EU28 at the 2050 time horizon a particular focus was made on power transmission technologies and more specifically on their cost trajectories.

    It is reminded that the scope of power system technologies covers the whole electricity value chain from generation and storage, transmission (passive and active transmission technologies) to demand and that the technology portfolio of power system technologies is defined upon selection criteria that are based on their impact on transmission networks with regard to planning issues by 2050. 

    Description of the result
    The technology assessment of available and commercially mature power system technologies at 2050 is the result of a collective work under the management of Technofi and involving key European stakeholders of the electricity value chain (manufacturers, TSOs, academia). It consists first in the data gathering of technical performance data on commercially mature technologies at each time horizon and then in an appraisal of tentative costs for the next four decades, i.e. from today to 2050.

    The database on transmission technologies includes AC, DC or hybrid interconnections or Power Electronics to better control flows over long distances. Transmission technologies have been organized into:
    - passive transmission technologies: high voltage (HV)AC and DC cables (AC and DC submarine  and AC and DC underground; HVAC and DC overhead lines; high temperature conductors; combination of HVAC/HVDC transmission solutions; gas insulated lines; superconductors.
    - active transmission technologies: converters for HVDC (CSC and VSC); FACTS (shunt and series); phase shift transformers and transformers with tap changer; protection and control at substation and at system level.

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    Figure 1: Portfolio of transmission technologies in the e-Highway2050 technology database

    The construction of future cost trajectories for transmission equipment based on their today’s estimated cost is one of the three major issues for the construction of the database and is detailed below.

    1. Proposed challenge and first observations
    Estimating likely evolutions of costs of transmission equipment, beyond a short-term “grid planning” time horizon, remains a complex exercise. Several sources propose models for estimating costs of technologies according to their maturity. These learning curve or experience curve based models have been explored in-depth for generation and demand technologies. They predict cost dropping rates per time period according to the market penetration of the technologies. Scientific literature on the “experience curve” approach applied to power transmission is less abundant (1).

    Predicting costs of transmission technologies is difficult since several exogenous factors might significantly impact the forecasts, i.e. the prices of commodities such as copper (cost multiplied by a factor 3 in few years) or the price of oil. Furthermore, each transmission project is very specific and costs depend largely on the selected technologies and on local constraints (terrain, labor costs, social acceptance, etc.).
    When considering the cost structure of transmission project, one can observe that the variations in costs due to different initial conditions (terrain, etc.) can offset by an order of magnitude the uncertainties related to the forecast exercise. This means that a big effort should be spent on these initial conditions, i.e. attention must be paid to at least two key factors: the archetypal configuration (the precise description of the installed transmission system) and the geographical factor (terrain).

    2. A systematic approach of deconstruction/reconstruction: key assumptions
    It is assumed and verified that time evolution of cost trajectories can be modelled by a systematic breakdown of costs in five distinct components (equipment, installation, civil work, project management, authorizations and right of ways).

    Evolution of each of these components can be approached via a simple evolution law with time constants that are inherent to the component. One could retain that three types of costs components could be distinguished with regard to evolution law:
    - cost components highly dependent on local constraints requiring a spatial analysis (terrain, country),
    - cost components highly dependent on factors for which forecasts at a long-term time horizon remain difficult due to a disruptive event (external factor or disruptive technology),
    - cost components for which evolution laws for the next decades could be built based upon basic assumptions under uncertainty margins.

    A series of assumptions are then formulated to allow optimizing the trade-off between complexity and tractability. It is assumed that:
    - The cost of a given archetype installed in a given installation context is known as of today
    - No disruptive change in the macro-economic context (geopolitical instability, major economic crisis, no force majeure event),
    - Evolution laws of rights of way and authorizations will depend on local constraints. This cost component, representing 4-10% of the overall costs, is excluded from the present analysis (i.e. no evolution law),
    - Evolution laws of installation, civil works and project management will mainly depend on future evolutions of costs of energy and labor. Oil prices, labor and engineering cost type indices could be good proxies to capture their respective evolutions.
    - There is a continuity in the technological evolution. The long-term trend for the future will thus result from the recent past trend and will take into account a classical technology learning curve (2). Such an assumption has some limitations on the short-term-fluctuations that might create some bias but it is expected that these short-term fluctuations will be averaged when considering longer term periods.
    - Evolution laws of equipment are thus driven by two complementary factors: the experience factor (i.e. a technology experience effect assuming no disruptive technology) to capture the ever progressing maturity of the industrial system. The second factor relates to the fact that transmission equipment (and especially lines and cables) includes raw materials (e.g. aluminum, copper), long-term trends of commodity prices has also to be taken into account.  


    3. Building the cost trajectories of transmission equipment until 2050
    It is reminded that the technology database includes a limited number of technology archetypes, commonly built by manufacturers and TSOs and aiming to be sufficiently representative of transmission solutions commercially available and competitive over the period 2014-2050. This approach was adopted to reduce the complexity (cf. knowledge article e-Highway 2050:  Management of uncertainties and data contextualization in the framework of the technology assessment of power system technologies expected to impact grid architecture studies at 2050).

    As a result, and for each considered transmission technology, cost evolutions can be estimated thanks to the aggregation of tentative forecasts of a series of indices at a given time horizon: commodity prices for energy and metals, labor and engineering costs as well as dropping rates (experience curve approach or other proxy).

    If we exclude the local/zonal costs, the minimum number of components to be considered is five, namely LAB and OIL for Installation and Civil works components, ENG for project management component, and the two indices capturing the equipment component (i.e. EXP, METAL indices). This number could even be reduced to four distinct indices if the two last indices on experience and commodities are formulated as a synthetized index (under the form of dropping rates of cost) which reflects the cost reduction of the supplied (not installed) transmission equipment.
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    Figure 2:  Approach to model cost trajectories based on cost breakdown and representative indices

    The figure below details the simple evolution models assumed for each category of indices.
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    Figure 3: Breakdown of cost components in indices and type of model of time evolution for each category of indices

    The aggregation is then direct for each time period for a given technology archetype. The figure below details:
    - The inputs: the initial CAPEX (1200 k€/km in the illustration below), the breakdown into the five components, the evolution laws of the end-indices (EXP, LAB, OIL, ENG), the uncertainty margins for each time period (±10% in 2030)
    - The outputs: the CAPEX for each time period with an uncertainty level in min-max intervals.

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    Figure 4: Costs projection at 2050 of the AC OHL archetype, 400 kV, 4.3 GW, in rural plain

    Finally, it should be added that if a variant of a given archetype has to be considered, it is proposed to resort to multipliers, (e.g. for other power, terrains, different number of conductors, different level of voltage, etc.).

    Assessment of the methodology use and limitations
    Forecasts at a long-term time horizon remain a tricky exercise with high degree of uncertainties. This is why an approach based on likely scenario and on a limited number of tentative archetype commonly built by manufacturers and TSOs was implemented to reduce the complexity.

    Beyond the values and records included in the techno-economic database, one key value of the result is in its methodological dimension, e.g. it provides statements and assumptions in a modular way to rerun the various methodological blocks, e.g.: 
    - to recalculate future costs of transmission technologies based on different archetype or different breakdown of cost or different laws of evolutions of indices
    - to re-contextualize data according to new 2050 scenarios
    - to add non considered technologies beyond the current e-Highway2050 technology portfolio.

    The proposed approach could be easily reused:
    - Within the e-Highway2050 project to reassess cost of transmission equipment according to different input hypothesis
    - Beyond the e-Highway2050 project time horizon and scope, in further grid planning studies at national or EU levels.

    A future user of such methodology can adjust the simulations at different levels:
    - use different initial cost conditions
    - modify confidence levels through  the uncertainty margins (min max range for each decade),
    - modify breakdown of CAPEX in equipment, installation and civil work, project management, authorizations and right of ways
    - modify the dependence of each of the five components to the end-indices (e.g. respective contribution of OIL and LAB to installation)
    -  assume different time evolutions for each of the end-indice: one could easily modify time evolutions of a given commodity (e.g. Aluminum or Copper) or Oil price.


    References
    Deliverable D3.1 e-Highway2050
     

    Notes
    (1) One could mention the FP7 EC-funded IRENE40 project aiming at building a technology database of power transmission systems with simple cost evolution models until 2050.

    (2)  The “learning curve” approach describes how marginal labor costs decline with cumulative production. The “experience curve” generalizes the labor productivity learning curve by including all costs necessary to research, develop, produce and market a given product. The general form of the experience curve is a power curve defined with a progress ratio PR=2-b, where b is the learning coefficient. Thus, for each doubling of cumulative production, the marginal cost decreases by (1-PR). For example with a PR of 90%, doubling of cumulative production within 20 years implies a 10% reduction in marginal cost. It should be noted that the “classical experience curve” includes “all costs necessary to…”: in our study we have separated two effects (the industrial product and the raw material due to its importance for transmission equipment).

  • Market4RES: Opportunities, challenges and risks for renewables integration in European electricity markets

    Within the European Commission funded Market4RES project, the consultancy company 3E N.V. assessed empirically the challenges and issues of increasing RES-E penetration for the short-term, medium and long-term electricity markets. This was carried out

    Market4RES project in a nutshell
    Market4RES is a project funded by the Intelligent Energy Europe program of the European Commission. The project started in April 2014 and will finish in September 2016. It investigates the potential evolution of the Target Model (TM) for the integration of European electricity markets that will enable a sustainable, functioning and secure European power system with large amounts of renewables. More information in the project article about Market4RES.

    Methodology
    In order to identify the existing and future market distortions on the very short-term, short-term and long-term markets when having high shares of RES-E penetration, empirical case studies analyses were conducted by E N.V. Several countries were analysed, spanning different market regions in the European electricity market with varying RES-E penetration. These countries include:
    - Central Western European (CWE) Region: Germany, France, the Netherlands, Belgium;
    - Iberian Region: Spain, Portugal;
    - Nordic Region: Norway, Sweden, Denmark, Finland.
    The countries were selected based on the availability of data and the presence of partners of those countries in the Market4RES consortium. Historical data was gathered from January 2006 until 31 December 2014 where possible through desk research and the involvement of partners.

    Major historical events happening in EU markets were analysed and indicators developed.

    The relevant cases were classified into three different categories:
    A. Events linked to changing environmental policy: increasing renewables uptake
    B. Events linked to improving economic efficiency of markets: market coupling and interconnections
    C. Events linked to security of supply: conventional supply changes

    Results of the case studies

    A. Events linked to changing environmental policy.
    Price levels are influenced by several elements, such as the overall installed capacities compared to demand, the renewable energy share in individual country energy mix, and the capacity of interconnectors.

    The analysis illustrates that with increasing shares of RES-E, average spot and futures prices tend to fall (a phenomenon that can be explained by the “merit-order effect”). For example, with close to zero variable costs, wind and solar generation can directly reduce wholesale market prices. These energy contributions can replace more expensive fossil-fuel electricity production. When a certain injection of RES-E is predicted with an almost zero marginal cost, the bid curve reverses, with renewables dispatched ahead of conventional generation effectively lowering wholesale market prices.

    There also appears to be a positive correlation between price trends and RES-E share percentage, though other factors are also important in setting spot and futures prices. Results on the intraday and futures markets are similar.

    Prices are influenced by supply relative to demand at specific points in time and will only decrease if capacities are too high relative to demand or if the electricity mix and flexibility of the system do not correspond to the needs of the rising renewable shares and changing consumer patterns [1].

    With increased penetration of RES-E, negative prices also occur more frequently on the spot market due to the intermittency of these energy sources. Germany, for instance, experienced 297 hours of negative prices on its day-ahead market since 2008 [2], hitting a low of -500 €/MWh in 2009. Though wind overproduction is often held responsible for negative prices, three major elements can explain the occurrence of these price events [3]: the high production subsidies and the lack of appropriate market incentives to address negative market prices, the limited flexibility of conventional power plants, and the must-run conditions of conventional power plants. The occurrences of negative prices on the wholesale markets signal, as a result, the need for more flexible electricity supply and demand through adaptation of systems components and reinforce the need for better integration of renewable generation sources to the power grid [4].

    Furthermore, the analysis could not conclude that there is a clear correlation between the share of RES-E penetration and the spot and futures prices on the market. However, the level of interconnection is a key driver to volatility as will be shown later.

    Finally, high RES-E generation coupled with low demand can create a need for curtailing renewable capacity. “Curtailment” is an option that some system operators employ as a consequence of constraints in distribution and transmission grids to deal with overabundance of electricity production on the system. Electricity producers can also be shut down for certain periods of time to balance the grid and secure stability of the system when there is, for example, network faults. Curtailment results in economic losses, as the power that could be generated from RES-E at that time goes unused. Spain in particular makes extensive use of curtailment due to its high wind production levels, lack of interconnection to neighbouring markets (particularly France and Portugal), must-run conditions of some non-RES units, and low demand levels at off-peak times.

    B. Events linked to improving economic efficiency of markets
    When looking at the impact of market coupling on electricity prices, it can be observed that market coupling optimises the spot prices and flows between interconnectors since generators benefit from increased export capacity and consumers from more import capacity. Moreover, there is a noticeable convergence of average monthly and yearly futures prices after the Central-Western European (CWE) market coupling announcement. Market coupling must however be paired with sufficient interconnection capacity to realise its full effect.

    Market coupling, moreover, has an impact on price volatility. More RES-E paired with high interconnection capacity tends to lead to lower and more stable prices. For example, the Nordic market has high RES-E shares, but low price variability because of its relatively high interconnection capacity, whereas Spain and Portugal have high price volatility due to high RES-E production and relatively low interconnection capacity to export excess electricity production. Volatility on the spot markets increases when interconnectivity is low. Therefore, real price volatility decreases only come with huge investments in grid infrastructure. 

    For the futures market, the analysis revealed that monthly futures price volatility within and between countries in the CWE region decreases after the market coupling in September 2010.

    C. Events linked to security of supply
    The analysis of nuclear maintenance and phase-out events reveals that building interconnection capacity is a key to ensuring security of domestic supply and stable spot price levels during low production periods. The announcement of the shutdown of a nuclear plant temporarily drives yearly futures prices up, but other factors such as higher shares of RES-E and the possibility to import cheaper energy from neighbouring countries through interconnectors play a greater role in influencing prices in the long term.

    Futures markets are highly responsive to security of supply issues. In Belgium, results of tests on the mechanical properties of the nuclear reactors Doel and Tihange indicate higher than expected risks for irradiation at the end of March 2014. As a result, outages of both plants have happened earlier than planned. In July and August 2014, the FANC (Federal Agency for nuclear control in Belgium) decided to keep both nuclear power plants temporarily offline until further assessment.

    Looking at the relationship between market prices and commodity prices, one can observe that there is some correlation between the TTF Gas prices and the day-ahead market prices, at least for the Netherlands (where gas-fired power plants account for a large proportion of the electricity production facilities). However, the correlation between the European Brent oil prices and day-ahead market prices appears to be nearly non-existent. A plausible explanation for this is that oil is not usually considered a direct substitute for electricity and there is little oil used in the current production of electricity. Monthly futures natural gas prices are mostly positively correlated with the monthly futures power prices.

    Measures for optimal market design

    Increasing renewable shares, market coupling and conventional supply changes are not unique European trends. Other jurisdictions around the world are confronting similar challenges, but may be addressing them in different ways. Therefore, the Market4RES project looked beyond European borders by highlighting developments and best practices implemented in international markets with similar energy challenges to Europe. Solutions and measures that are relevant to the European context are briefly described hereunder (non-exhaustive list), with the view to inform market design policies in Europe to better optimise RES-E integration on the electricity system.

    Increase interconnection capacity. Building new interconnections to control price volatility, increase market efficiency and flexibility is the key to managing intermittent renewable sources. This measure equally applies when there is an over production of generation and when there is security of supply issues, for example, when nuclear plants go offline for maintenance or permanent shutdown.
    Support demand management. Demand-side response (DSR) should be incentivized in order to better match supply with demand. DSR can shift consumer demand to off-peak periods during periods of high demand and incentivise consumption during high production and/or traditionally low demand periods. Technical infrastructure, such as smart meters, may be required to enable flexible demand.
    Increase flexibility operations. There are several ways to increase flexibility of the system through flexible operation measures, for example, merging balancing areas, sharing flexible generation assets, sharing back-up reserves, etc. Having stand-by capacity that can ramp up rapidly can also provide more flexibility to the system.
    Improve forecasting techniques. More sophisticated and accurate forecast of RES-E availability can reduce the need for back-up capacity. Another part of the solution is to decrease the lead-time for forecasts through intraday markets which would improve forecast accuracy.
    Optimise interplay of intraday, balancing and day-ahead markets. Intraday and balancing markets should be designed to make full use of the flexibility of the transmission system and the different generation technologies. For instance, lead time available to pursue system adjustments could be increased, gate closure delays reduced and it should be possible to reschedule power flows between countries more often.

    References

    [1] Batlle, C., Banez-chicharro, F., Frías, F. P., Linares, P., Olmos, L., Rivier, M.,  Eeg, T. U. W. (2013). Design and impact of a harmonised policy for renewable electricity in Europe Derivation of prerequisites and trade-offs between electricity markets and RES policy framework 2020.
    [2] EPEXSPOT
    [3] KU Leuven Energy Institute. (2014). Negative electricity market prices, 1–5. Retrieved from http://set.kuleuven.be/ei/images/negative-electricity-market-prices
    [4] European Commission (2014). Quarterly Report on European Electricity Markets. DG Energy Market Observatory for Energy, 7.

  • e-Highway 2050: Grid reinforcements design for long term transmission planning in Europe

    The potential bottlenecks of the pan-European transmission system in 2050 are first analyzed by an analysis taking into account its boundary conditions: (i) the European power system is represented via a zonal model of 100 clusters; (ii) for 2030 the st

    Challenges
    - How to identify the grid bottlenecks caused by physical power flows exchanged between areas in Europe at the 2050 time horizon?
    - Which grid reinforcements could tackle these constraints for a given energy scenario for the pan-European transmission system at 2050?

    Background and assumptions 
    The analysis focusing on the system in 2050 is based on a scenario approach projecting the outlook of the energy system in Europe in 2050 and on the already known grid reinforcements scheduled until 2030 which constitute the “starting grid” of the approach, common for all scenarios:

    - The five scenarios for the pan-European transmission system at 2050 have been described here and Europe has been clustered into about 100 different clusters modelling a simplified European transmission system (assuming 1 cluster = 1 node)
    Image removed.
    Figure 1. Countries and clusters including North Sea and North Africa (left) and Equivalent transmission network (right)

    - The quantification of the five scenarios (meaning that demand, storage, exchange and generation have been defined up to the cluster level) was carried out thanks to a dedicated approach.
    - The starting grid was set assuming that the transmission network existing today will still be in operation by 2050 and that the transmission network developments foreseen by the TYNDP 2014 until 2030 (1) will all be completed.

    All these preparatory steps were needed to perform system simulations modelling the behavior of the whole European power system with robustness considering both the starting grid as initial condition and the evolutions of generation and demand over the period. Two successive steps are implemented. First the identification of network constraints by measuring difference between a “copper plate” grid and a grid with limited capacities. Then, in a second step, Transmission Requirements are defined representing the needed increase of capacity between two clusters. They are progressively defined by an iterative approach with the goal to minimize the effects of grid limitations at least costs    .

    1. System simulations
    The system simulations optimize the dispatch of generation in terms of cost for each hour of the year, taking into account the topology and characteristics (impedances and grid transfer capacities) of the “starting grid”. The optimization process identifies the required inefficient generation shift allowing electricity flows to remain within their limits. The operating cost of the pan-European power system can be estimated for the “starting grid” and for any modified grid architecture.

    The simulations are performed with the ANTARES (2) tool:
    - The optimisation aims to minimize the overall cost of the system taking into account grid characteristics. The European system is optimized in one shot and a perfect market is assumed.
    - Probabilistic simulations of 99 possible years are performed thanks to a Monte-Carlo approach (3) to address the variability inherent to a high share of RES
    - The time step resolution is one hour and simulations cover a period of one year.

    2. The methodology aiming at detecting the constraints
    This first phase identifies the most critical issues for the grid in both time and space dimensions while taking into account the intrinsic uncertainty of some variables (e.g. renewables).

    Network constraints effects are measured by the difference between two simulations: The “copperplate” situation - in which network capacities are set to infinite – and a mode “with grid constraints” - in which capacities are limited to the “starting grid”(4) at first, then to the “starting grid” with Transmission Requirements of the reinforcement process.

    The “copperplate” simulation gives the upper limit of what could be achieved by grid reinforcements to ensure system security and optimize operating costs. On the contrary, the “starting grid” simulation gives the lowest level of system security that can be achieved with the 2030 transmission network status after implementation of the demand and generation levels as expected for 2050.

    To address the tractability of a huge amount of data (8760 hours x 99 MC years for each of the about 100 clusters and each link (>200)), a progressive approach in both time and space dimensions is implemented with an in-depth analysis of three indicators for each scenario at different time and geographical scales:
    - ENS (Energy not served or unsupplied energy) represents the volumes of energy not served due to network limitations
    - Extra spillage or delta spillage depicts the must run energy (e.g. Renewables) that cannot be consumed due to the congested grid
    - Thermal redispatch which can be positive or negative: a positive redispatch in a given cluster meaning that local thermal generation is increased to secure the load. This (more expensive) generation substitutes RES energy and competitive thermal generation available in other clusters but that cannot be relieved due to network limitations. Conversely, a negative redispatch means that thermal generation that is optimized in the copper plate simulation is reduced due to grid constraints (typically it occurs in countries/clusters with capacities in competitive technologies, with excess of energy).

    3. The progressive grid development towards the architecture at 2050
    An iterative process is implemented which stops when indicators are stabilized. Once all the reinforcements are identified, they are transposed into possible technologies for a cost / benefit assessment of the resulting architecture (the complete set of reinforcements for the pan-European space).

    The loop is detailed in the figure below: based on constraints analysis, transmissions requirements are proposed and tested.
     
    Image removed.
    Fig. 2: Iterative process to define the reinforcements

    The constraints analysis of characteristic weeks enable to suggest reinforcements to connect areas in surplus to areas in deficit. Their sizes are set based on the identification of synchronous volumes at stake. The possibility to collect or distribute energy along the path is considered.

    Image removed.
    Figure 3. Example of map with average hourly values on the 99 Monte Carlo years
    in a characteristic week and reinforcements

    The reinforcements are not tested one by one or all at once: at each iteration of the process, a set of reinforcements constitutes a “step” to be further assessed.

    - The annual benefit of the “step” is calculated as the sum of generation costs savings and ENS costs reduction. Within the project, ENS costs are estimated on the level of 10000 Euro/MWh for the whole Europe (a cost of 1000 Euro/MWh is also considered in a sensitivity analysis).
    - The cost of the tested set of reinforcements is then roughly assessed considering costs of DC cables, as the most expensive case. It is compared to the benefits to verify that the investments are profitable whatever the technology as a “no regret investments”. Based on the remaining constraints in the characteristic weeks, a new iteration of reinforcement is then defined. If there are no more significant issues (which means only small and spread volumes of ENS, spillage and redispatch remain), the iterative process stops.

    The final grid proposal is made of all the transmission requirements (reinforcements) defined in the different steps and defines the final architecture.

    4. Technology and cost assessment
    Transmission Requirements consist in specification of needs and are not related to any specific technology: they are however transposed into possible technologies to ensure the technology availability and to better assess the cost of the final architecture.

    Indeed since the selection of technologies in 2050 will be highly impacted by the level of public acceptance towards new lines, three strategies are considered to encompass a wide range of possible costs: from a “Status Quo” strategy (5) to a “New Grid Acceptance” strategy (6), an intermediate strategy being the “Re-Use of Corridors” in which the public accepts new overhead lines as long as they are close to existing ones.

    It should be noted that a given transmission requirement can be realized through many parallel lines, especially due to the capacity limit of a single line and the N-1 robustness. These different lines could follow different routes between the clusters and be connected to different substations, but this perspective remains beyond the scope of this study.

    5. Cost/benefit analyses
    A simplified analysis is carried out as a final step here, while a more comprehensive toolbox for the cost and benefit analysis applicable to a reinforcement project is proposed here. For the three strategies, the investment annuity (7) of the final architecture is compared to the annual benefit of it, to measure the level of profitability.

    This assessment of the profitability encompasses the whole architecture and does not evaluate profitability of partial packages of reinforcements (the profitability of each reinforcement depends strongly on the other reinforcements already in place, thus it is difficult to assess the profitability of a single project).

    6. Resulting grid architectures at 2050
    New transmission reinforcements to support each of the five identified scenarios confirm the predominance of “North to South” corridors. An overview of architectures is proposed and discussed here.

    References
    [1]    B. H. Bakken, M. Paun, R. Pestana, G. Sanchis, “e-Highway2050: A Modular Development Plan on Pan- European Electricity Highways System for 2050”, Cigre Lisbon, April 2013
    [2]    G. Sanchis, RTE et alia, “A methodology for the development of the pan-European Electricity Highways System for 2050”, CIGRE Paris, August 2014  
    [3]    Thomas Anderski, Amprion et alia, deliverable D2.3 System simulations analysis and overlay-grid development – Digest.
    [4]    T. Anderski, Amprion; F. Careri, RSE; N. Grisey, RTE; G.Migliavacca, RSE; D. Orlic, EKC; G. Sanchis, RTE. e-Highway2050: a research project analysing very long term investment needs for the pan-European transmission system. Cigre Paris. Submitted to Cigre Paris, August 2015
    [5]    http://www.e-highway2050.eu
    [6]    Thomas Anderski, Amprion et alia, deliverable D2.4 Contingency Analyses of Grid Architectures and Corrective Measurements, to be published in 2015
    [7]    ENTSO-E, “Ten-Year Network Development Plan (TYNDP)”, www.entsoe.eu/major-projects/ten-year-network-development-plan/, 2014

    Notes
    (1) which includes for example major North-South HVDC corridors in Germany
    (2) Antares is a sequential Monte-Carlo system simulator developed by RTE. More details can be found in: M. Doquet, C. Fourment, J.M. Roudergues “Generation & Transmission Adequacy of Large Interconnected Power Systems : A contribution to the renewal of Monte-Carlo approaches”, PowerTech2011, IEEE Trondheim
    (3) 11 different solar & wind “years” combined with 3 different demand “years” –based on temperatures) and 3 types of hydrologies -dry, average, wet “years”
    (4) Starting grid 2030 based on the actual grid and the TYNDP2014 enlargements 
    (5)the public opposition against new infrastructure prevents any new OHLs. Only refurbishment of existing lines or new DC cables can be implemented
    (6) the public accepts new OHL and also the development of new corridors. DC cables are also possible but OHL are preferred when possible due to their lower costs
    (7) Investment annuity is calculated as discounted annual costs respecting economic lifetime of the equipment defined in WP3 and discount rate of 5%.  

  • e-Highway 2050: A new multi-criteria cost-benefit methodology to compare new transmission investments

    Author: G. Migliavacca, S. Rossi, F. Careri (RSE); L. Olmos, A. Ramos, M. Rivier (IIT-UP Comillas); J. Sijm (ECN); D. Huang, D. Van Hertem (KU Leuven)

    The proposed Cost-Benefit Analysis approach goes beyond the set of indicators commonly used for assessing cost and benefits in transmission planning. In addition to the main economic aspects of transmission expansion projects, it considers social-envir

    Challenge
    How to define and to combine relevant indicators to quantify costs and benefits so as to compare transmission system investments at a 2050 time horizon?

    Background and assumptions
    Investment choices imply examining all possible options for achieving a given goal and sorting them in order to select the most promising one. Two alternative approaches are commonly used: cost-benefit analysis (CBA) and multi-criteria approaches (MCA). The former relies on economic indicators from which a single scoring parameter is drawn, whereas in the latter dimensionless values are combined with different weights. CBA is used more often for assessing infrastructural investments while MCA is preferred for analyses of projects in which social and environmental aspects are prevailing. The project choice was to implement a comprehensive CBA approach trying to appraise in monetary terms several aspects that are usually only investigated in a qualitative manner. A toolbox is also being implemented allowing to apply the proposed methodology in an automatic way and will be put available as a public deliverable of the project.

    CBA approach in e-Highway2050
    The proposed methodology for e-Highway2050 is a CBA approach completing existing approaches when dealing with long-distance trans-national transmission infrastructures. It enables scoring of investment alternatives for the European transmission grid by comparing simulation cases with and without network reinforcements.

    Figure 1 below shows the main aspects of the CBA methodology.
    Image removed.
    Figure 1 - Relevant components included in the CBA methodology

    Economic profitability indicators
    - Lifecycle costs include all costs incurred during the life cycle of the transmission project, viz. by computing the NPV (net present value) including authorization expenses, asset capital expenses (CAPEX), installation/refurbishment expenses, operations and maintenance expenses (OPEX), decommissioning expenses, disposal net expenses.
    - Social Welfare change (SW) resulting from transmission projects as the difference between the value of SW in the two scenarios “with” and “without” the studied set of reinforcements.
    - Change of inter-zonal network losses due to a network reinforcement are evaluated by means of post-processing calculations.
    - Change of CO2 emissions: costs for CO2 emission rights are implicitly accounted for within the generation cost curves adopted for the system simulations and monetized at the reference forecasts for emission trade prices at the targeted year: thus, their contribution has just to be unbundled from the overall SW figure to provide an evaluation of the potential benefit deriving from CO2 emission reduction due to the new transmission project.
    - Further benefits from RES integrability: network reinforcement options lead to a more efficient exploitation of the generation capacity present in the system. This benefit is implicitly accounted for by an increase of the overall SW. However, the present transmission upgrade could allow hosting further RES generation, whose maximum hosting capacity could be appraised by a sensitivity analysis and an iterative approach on levels of installed RES capacity and thermal generation.
    - Change of Social Welfare due to markets: CBA in transmission studies relies upon marginal cost pricing simulations for evaluating the economic benefits of potential transmission investment projects. However, neglecting the effect that generators’ strategic behavior (imperfect competition) may have on the overall system Social Welfare can lead to erroneous estimations of benefits. Actually, network reinforcements could result in an additional benefit for the system by reducing the potential for exercise of market power by incumbent generation companies and increasing overall SW. The methodology [1] includes the effect of price-cost markup on top of the market outcomes computed by assuming perfect competition: it is based on a regression analysis using historical values for the main EU countries allowing to quantify the correlations between some market variables and price-cost markup. This approach is similar to the one followed for market monitoring by the Californian ISO and proposed by [2].
    - Distribution network investments: a gross estimation of the investments that could be necessary in the distribution network [1] as a consequence of the considered inter-zonal transmission reinforcements is provided by comparing the net power exchange of each cluster resulting from the economic operation of the system before and after transmission expansion. Demand Side Management and distributed storage effects are also considered.

    Socio-environmental aspects
    The main socio-environmental aspects to be considered for the assessment of the socio-environmental impacts for transmission systems are land use and public acceptance (other aspects include for instance real estate prices, biodiversity and landscape, human health and well-being). Land use values can be estimated with a quantification of the rights-of-way compensation costs by means of a five-step approach: (i) Create a land taxonomy; (ii) Collect values for the European countries; (iii) Analyze average characteristics of clusters borders based on the ground taxonomy; (iv) Use a “brown field approach” in case of long borders with variable characteristics (v) Assume infrastructure length according to inter-distance between clusters centers. Public acceptance has an impact on the implementation time of a new transmission infrastructure. Statistics for selected countries are collected and then typical values for extra delays are assumed depending on the category of network infrastructures.

    System resilience and security of supply
    - Reliability costs are estimated as the cost of service interruptions under normal conditions, i.e. the amount of Energy not Served (ENS) times the unit Value of Lost Load (VoLL).  VoLL levels are estimated here for all EU countries for a one-hour interruption per type of energy consumption and country.
    - Resilience costs (service interruptions under extreme events). Here, the amount of ENS occurring as a result of an extreme event is calculated for each node which allows to compute the cost of the lack of resilience.
    - “Reliability related” DSM costs (costs of mobilizing demand to preserve system security). The cost of DSM measures applied to avoid service interruptions is deemed equal to the cost for the system of interruptible contracts, or other reliability driven measures like regulating energy markets. It comprises the cost of procuring a load available to be interrupted if necessary and the cost of the use of this service. Both actions can be undertaken either through contracts or any reliability market scheme.

    Financial and regulatory aspects
    The interplay of regulation, financing and risk is at the heart of transmission network financing [5] and an integrated approach is necessary. The level of risk allocated to the firm by regulation design impacts the incentives and the market perception of the firm which translates into a specific cost of the capital provided by investors.

    Individual systematic risks are identified, given equal weight and summed into a single overall systematic risk category. Typical asset beta values corresponding to each overall systematic risk category have been pre-identified by screening the cost of capital profiles in a European context [6]. Then the asset beta value, as representative of cost of capital, is selected by matching the target regulation and risk model with the corresponding overall systematic risk [7].

    Assembling all the CBA indicators
    An algebraic sum of benefits and costs is constructed since all CBA components are expressed in monetary terms. A scoring parameter can then be used for selecting one solution among several investment alternatives.

    A classification of CBA indicators is provided, cf. Table 1 below.  Core indicators are the ones where a consolidated experience is available. Experimental indicators require further validation and assumptions due to a lack of data. Extra indicators are also given but not used in the CBA calculations since they provide additional information when performing sensitivity analyses.
    Image removed.
    Table 1 – Core, experimental and extra indicators
    Sensitivity analyses are based upon the uncertainty over the different scenarios and possible modifications in the scoring due to a change in the reciprocal importance given to the costs and benefits.

    Conclusions
    A CBA toolbox has been developed as a public deliverable of the e-Highway2050 project to appraise the grid expansion architecture options for the 2050 time horizon, starting from the ENTSO-E 2020 planned network layout, for each of the five reference scenarios adopted by e-Highway2050.  

    References 
    [1] Rossi, S., Careri, F., Migliavacca, G., Özdemir, O., van Hout, M., “Linear Estimation Approach for Including Strategic Competition in Market Simulations”, 11th International Conference on the European Energy Market (EEM) May 2014
    [2]  Sheffrin, A.Y., Chen, J., Hobbs, B.F., “Watching watts to prevent abuse of power”, IEEE power & energy magazine, July/August 2004
    [3]  Losa, I., Bertoldi, O., “Regulation of continuity of supply in the electricity sector and cost of energy not supplied” International Energy Workshop 2009, June 2009. [Online]. 
    [4]  Council of European Energy Regulators (CEER, 2010), “Guidelines of Good Practice on Estimation of Costs due to Electricity Interruptions and Voltage Disturbances” Ref: C10-EQS-41-03, December 2010. 
    [5]  Rabensteiner, P., 2013, “Multi-Dimensional Risk and Investment Return in the Energy Sector: The Case of Electric Transmission Networks”.
    [6] ACER, “On Incentives for Projects of Common Interest and on a Common Methodology for Risk Evaluation”, Technical paper,
    [7] New South Wales Government, 2007, “Determination of Appropriate Discount Rates for the Evaluation of Private Financing Proposals”, Technical paper
    [8]  G. Sanchis, RTE et alia, “A methodology for the development of the pan-European Electricity Highways System for 2050”, CIGRE Paris, August 2014  
    [9]  B. H. Bakken, M. Paun, R. Pestana, G. Sanchis, “e-Highway2050: A Modular Development Plan on Pan- European Electricity Highways System for 2050”, Cigre Lisbon, April 2013

    [1] “distribution” in the sense that it also includes all the levels of transmission voltage that are not considered in the e-Highway2050 project.

  • e-Highway 2050: Approach towards a European cluster model

    Grid development planning is an exercise that requires high knowledge about future developments and accuracy of data to perform detailed grid analyses. In the project e-Highway 2050 and its long-term planning horizon it seemed unrealistic to provide in

    Challenge
    How to define a model of the pan-European transmission system at 2050 which is an optimal trade-off between accuracy of data and time of calculations of grid simulations studies? What would be an appropriate number of nodes for such simulations?

    Background and assumptions
    In short term studies, system simulations as well as load flow analysis at nodal level are required to define the grid needs. However, the whole European transmission network includes almost 10.000 electrical nodes (Figure 1), which are not tractable for the project. Indeed, for such a long term horizon, uncertainties increase when we perform geographical zooms. A clustering approach has thus been introduced, reducing the level of description of the grid.
    Image removed.
    Figure 1 : present European transmission grid

    Description of the result
    The geographical clustering process is performed to split Europe and its countries into smaller parts, relevant for the system modeling (i.e. they should not be too big, to also represent grid characteristics but large enough to enable a geographical allocation of generation and demand in 2050).

    The basis for this analysis has been the Nomenclature of Territorial Units for Statistics (NUTS3 regions) which is set by Eurostat. The clustering is also based on real system characteristics in order to represent the underlying transmission system appropriately. The clusters must be valid for all scenarios of the project.
    The criteria used are population, potential of RES generation, land use – availability of the areas, installed generation capacity (thermal and hydro).

    A two-step approach was implemented. In a first step an algorithm (K-means clustering (1)) is applied considering the first four criteria which are all measureable criteria. The optimization aims at joining together the incremental NUTS-regions in a way that homogenous clusters are reached.

    Image removed.
    Figure 2 : NUTS regions

    In the second step, the TSO expertise is taken into account for the optimization of the clusters.    

    Then, the clusters are used for the definition of transmission equivalents. The starting point is the existing transmission system, including the grid reinforcements already planned for the next decade. This whole picture is provided by the Ten Year Network Development Plan (TYNDP) (2). This basis for grid reduction ensured that the European grid model is based on the most accurate information about the available transmission system.    

    The determination of transmission equivalents, enabling scheduled unit commitment optimization and grid analysis, is heading towards two main indicators. A transmission equivalent is characterized by its thermal capacity and impedance, latter describing the load flow distribution within the network. Equivalent lines were only introduced between adjacent clusters sharing at least one interconnection line in reality.

    The methodology chosen to determine the thermal capacity of the transmission equivalent has been derived from European Network TSO-E (ENTSO-E) methodology to assess the Grid Transfer Capacity (GTC) value between two neighboring countries.

    The purpose of Z-equivalents in the grid model is to estimate load flows of the reduced system in comparison to real flows on the borders between clusters. The used methodology searched for and optimal impedance matrix, that minimizes the mean to Root Mean Square Error (RMSE) on the difference between initial flows of the nodal and the reduced network, for each transmission equivalent.

    The final pan-European cluster model, as a result of the clustering and grid reduction, is shown in Figure 3, with almost 100 clusters.

    Image removed.
    Figure 3 : Clusters of Europe
     
    Assessment of the methodology use and limitations
    The European grid model is used by the e-Highway2050 project as a tractable model to perform network simulations with respect to identify candidate grid architectures able to meet challenges of electricity markets until the 2050 time horizon.
    Beyond the e-Highway2050 project, such clustering approach could be used in further grid planning studies at national or EU levels.

    References
    "Energy Roadmap 2050 Impact assessment and scenario analysis,” European Commission 
    G.Oettinger, EU Commissioner for Energy,“A pan-European grid for 2020 and beyond”
    Cordis 
    “Guidelines for trans-European energy infrastructure”, European Commission, October 2011
    B.H.Bakken, M.Paun, R.Pestana, G.Sanchis, “e-Highway2050: A Modular Development Plan on Pan-European Electricity Highways System for 2050”, Cigre Lisbon, April 2013
    e-Highway2050 web site
    ENTSO-E, “Ten-Year Network Development Plan (TYNDP)”, 2012

    Notes
    (1)  k-means clustering is a method of vector quantization used for cluster analysis in data mining. k-means clustering aims to partition n observations into k clusters in which each observation belongs to the cluster with the nearest mean, serving as a prototype of the cluster.
    (2) ENTSO-E, “Ten-Year Network Development Plan (TYNDP)”, 2012

  • e-Highway 2050: Methodology for strategic environmental and social assessment of grid reinforcements at 2050

    Author: Maria Partidário (IST), Rita B. Soares (IST), Margarida Monteiro (IST), Nuno Oliveira (IST), Peter Phillips (CEP), Steven Forrest (CEP), Katya Brooks (CEP), William Sheate (CEP).

    The overall objective of the Strategic Environmental and Sustainability Assessment (SESA) is to contribute to the integration of environmental and sustainability issues in the development of strategies inherent to the e-Highway2050 project, and to asse

    Challenge
    How to define an appropriate assessment framework for the strategic environmental and sustainability assessment of grid reinforcements at a 2050 time horizon?

    Background and assumptions 
    The scenarios for the pan-European transmission system at 2050 have been described here and Europe has been clustered into about 100 different clusters. Then the five energy scenarios at 2050 have been quantified, meaning that demand, storage, exchange and generation have been defined at country and cluster level according to a dedicated approach. Grid architectures and reinforcement options are detailed here.

    Description of the result   

    1.      The SESA approach in e-Highway2050
    The SESA methodology enables an early assessment of a range of strategies inherent to the e-Highway2050 project using a strategic thinking methodological approach which seeks to establish environmental and sustainability conditions for successful e-Highway2050 project outcomes.  A key element in the methodology are the Critical Decision Factors (CDF) [2], integrated themes that express environmental and sustainability priorities, and which are used as success factors in the assessment framework. The CDF together with assessment criteria and indicators constitute an assessment framework. This framework is built on the integration of three types of frameworks:
    (i) a problem framework, i.e. map problems and potentials concerning key environmental and sustainability issues;
    (ii) a governance framework relative to institutional arrangements already in place and additional structures and processes required to support an effective delivery of e-Highway2050;
    (iii) a Strategic Reference Framework highlighting relevant macro-policies, and its key objectives and targets, that serves as a referential for assessment.

    The strategic assessment is structured around the CDF, while the assessment is conducted with reference to the macro-policy objectives and targets as well as in relation to main trends on key environmental and sustainability themes, considering key drivers of change, as well as governance arrangements and policy conflicts that may impact e-Highway2050 decisions. The CDF are the key instrument in keeping the strategic focus in the assessment.

    2.      Defining the CDF and the strategic options
    The four CDF that structured the assessment of the e-Highway2050 strategies for grid architectures are: Social acceptance and acceptability; Energy security and energy technologies; Geo-political economy and regional equity; and European regional governance.

    Image removed.
    Table 1 – The four Critical Decision Factors (CDF) in e-Highway2050

    The strategies underlying the five selected energy scenarios at the 2050 time horizon were interpreted in order to identify the plausible strategic options that could determine the design of an overall grid development considering five different possible futures.  When applying the SESA process to the five e-Highway2050 scenarios, 16 strategic options in four strategic themes were identified:
    1) Generation and regional balance;
    2) Storage;
    3) Transmission;
    4) International strategy.

    Image removed.
    Table 2 – e-Highway2050 Strategic Options

    The correspondence matrix between the 16 strategic options and the five scenarios is described in [3].

    3.      Assessing strategic options underlining candidate grid architectures

    The following risks and opportunities illustrate outcomes from the assessment of the identified strategic options within the e-Highway2050 framework:
    - Most identified risks result from a relatively restrictive set of options from which strategic choices are made by considering generation, storage and transmission. As a result of the long-term planning context (2050) of the e-Highway2050 project, the range and type of uncertainties must be considered by resorting to adaptive approaches that can reduce the power system vulnerability to climate change, accidents, political instability, market volatility and other causes.
    - Other significant risks are related to specific strategies that, if adopted, may increase some regions/Member States’ energy dependency (such as a highly centralised strategy for both generation and storage or a non-RES dominant energy mix).
    - Opportunities could be identified. Most of them relate to the possible deployment of a mixed scale and technological energy system (combining both large-scale and smaller scale solutions in terms of generation and storage) that can foster vast demand-side management deployment and promote overall reduction on energy consumption, and on transmission losses.
    - A mix of transmission technologies adapted to local conditions present the highest amount of opportunities for a sustainable grid development. Optimizing the existing AC network with FACTS while developing HVDC links, and combining both underground and overhead lines can deliver the best trade-offs between the security of supply, regional equity and competitiveness, social acceptance and the power system’s governance.

    SESA is not an appropriate instrument to deliver yes or no go ahead solutions. These conclusions must be supported by accurate modelling and cost-benefit analysis that consider the land-take and environmental impacts that transmission infrastructure can have on ecosystems, ecosystem services and local communities. Failure to take these into account may lead to difficulties at a later stage, including irreversible losses through social and environmental damages, public opposition and increased costs.

    4.      Towards guidelines for grid development
    The SESA process leads to the following recommendations to guidelines for grid development:
    - Large-scale and decentralised, smaller-scale generation and storage solutions must be combined to reduce vulnerabilities (the use of adiabatic CAES should be considered instead of PHS, to enhance the public acceptability of large-scale storage systems);
    - Spatial planning and constraints analyses must be used to guide underground lines away from particularly vulnerable locations;
    - The loss of biodiversity and other ecosystem services essential to local development must be avoided first, then reduced and only as a last resort compensated for;
    - Technologies with low technology readiness level and Key Enabling Technologies must be promoted to keep future options open;
    - Alternative solutions for energy imports must be identified and developed, and energy import dependence and vulnerability, at country and regional level should be monitored;
    - Market coupling projects and agreements should be implemented within a technological framework (i.e. accounting for technological progress of the power system);
    - Enhance interconnections by ensuring the speed-up of authorization processes (simplification of administrative procedures).

    At last, energy infrastructure development entails public acceptance issues: it is critical that relevant stakeholders are engaged early on in the planning process. It is also essential to consider, and clearly expose the costs and benefits of selected strategic options, not only from an economic and financial perspective but also considering social and environmental issues, to allow informed participation by regional and local stakeholders – while reducing public opposition. Governance and market development mechanisms must also be enhanced to support MS cooperation and coordination, regulate the energy system and promote technological development and market integration, while considering regional equity as a baseline.

    Conclusions

    The methodology developed to implement the SESA process can be used to assess 2030 and 2040 scenarios, as well as other strategic-level decision-making processes during grid planning. However, it is essential that a strong interaction exists between strategic assessment and grid development in order to adapt to an evolving decision-making context. This will enable a continuous improved integration of environmental and sustainability issues during grid planning processes.

    References

    [1]     e-Highway 2050: http://www.e-highway2050.eu
    [2]     Agência Portuguesa do Ambiente e Redes Energéticas Nacionais. Lisboa. 2012. (http://ec.europa.eu/environment/eia/pdf/2012%20SEA_Guidance_Portugal.pdf)
    [3]     Maria Partidário et al. Deliverable D4.2  of e-Highway2050 project. Environmental validation of the grid reinforcements for 2050
    [4]     G. Sanchis, RTE et alia, “A methodology for the development of the pan-European Electricity Highways System for 2050”, CIGRE Paris, August 2014  
    [5]    B. H. Bakken, M. Paun, R. Pestana, G. Sanchis, “e-Highway2050: A Modular Development Plan on Pan- European Electricity Highways System for 2050”, Cigre Lisbon, April 2013+H20

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