Market Integration of Renewable Energies A European Perspective

Transcription

1 Market Integration of Renewable Energies A European Perspective British- German Workshop Renewable Energies and Electricity Market Design Squaring the Circle? Dr. Corinna Klessmann

2 Diversity of support schemes in Europe but some converging trends, e.g. diffusion of premium/cfd systems Source: Ecofys based on Ragwitz et al. (2012). RE- Shaping Ecofys et al. (2012). RE progress and biofuels sustainability. ECOFYS Dr. Corinna Klessmann

3 Diversity of support schemes in Europe but some converging trends Diversity of support schemes in Europe is shown by different colours and patterns, but some converging trends have been observed: Use of combination of instruments instead of one size fits all (e.g. FIT for small scale, auctions for offshore wind) many patterns instead of plain Diffusion of feed-in premiums across Europe as compromise between revenue security of investors and RES-E exposure to market signals Moratoriums and uncertainties on the future of support schemes because of public deficits (e.g. Spain, Portugal, Latvia, Bulgaria, Czech Republic) ECOFYS Dr. Corinna Klessmann

4 The type of support scheme determines how RES electricity is integrated into the electricity market. TGC revenues RES-support Market price FIT FIP Quota fixed premium - cap & floor - sliding/cfd > Feed-in tariffs (FIT): purchase obligation & market integration by TSO; low risk to RES-E producers; priority dispatch may lead to negative prices (if not regulated otherwise) > Feed-in premium (FIP) and quota: RES-E producers sell electricity directly on the market (usually through offtaker); higher revenue risks tend to increase the required support level; negative prices are limited ECOFYS Dr. Corinna Klessmann

5 How easily can RES-E producers sell their electricity to the electricity market? The picture across the EU is mixed. 100 Electricity market preparedness for RES-E market integration Low High *Austria *Belgium *Bulgaria *Cyprus Czech Republic Germany Denmark *Estonia Spain ECOFYS Dr. Corinna Klessmann Electricity market preparedness indicator Source: RE-Shaping 2011 Finland France Greece *Hungary Placehoder for missing data points (=10 points as default) E: Gate closure time D: Share of electricity traded at exchange (spot) C: Number of companies with more than 5% share in the national retail market B: Number of companies with more than 5% share in generation capacity / wholesale market A: Share of TSOs that are ownership unbundled Ireland Italy Lithuania *Luxembourg *Latvia *****Malta Netherlands Poland Portugal Romania Sweden *Slovenia **Slovakia *United Kingdom

6 Example: electricity volumes traded at power exchanges - relevant for defining references prices Traded volumes at power exchanges as a percentage of national demand (%) Source: CEER National Indicators (2012) ECOFYS Dr. Corinna Klessmann

7 Conclusions: RE market integration in the EU > An increasing number of countries in Europe supports direct marketing of renewable electricity trough FIP/Cfd schemes; potential for mutual learning > Whether this is an efficient way of RES-E support depends on the openness of electricity markets for RES-E, which differs across Europe ( Are RES-E generators able to secure long-term PPAs? At what cost?) > New integration challenges have emerged in countries with higher RES shares: merit order effect of wind and solar, need for increased system flexibility (grid expansion, flexible generation, demand resposne, storage) ECOFYS Dr. Corinna Klessmann

8 Thank you for your attention! Ecofys Germany GmbH Am Karlsbad Berlin Germany Dr. Corinna Klessmann T: +49 (0) E: I: 8 ECOFYS 13/06/2013 Name

9 Convergence of RES-E support needs to build on converging electricity markets Support framework Common (best) practice Cooperation Coordination Harmonisation Convergence of RES-E market conditions Common (best) practice Cooperation Coordination Harmonisation Electricity market framework ECOFYS 13/06/2013 Dr. Corinna Klessmann, Dr. Isabelle de Lovinfosse

10 Current steps for converging support frameworks mainly focus on best practice exchange. Steps towards implementing joint principles/design elements. Common (best) practice Support framework Cooperation Coordination Harmonisation Member States exchange (Concerted Action, IFIC, etc.) Some MS discuss coop mechs Joint support scheme SE- NO; Italy... EC: Best practice guidance EC: Guidelines to facilitate trade Future: Minimum design standards for RES-E support? ECOFYS 13/06/2013 Dr. Corinna Klessmann, Dr. Isabelle de Lovinfosse

11 The integration of European electricity markets is ongoing but not yet completed. Market adjustments for integrating large shares of variable RES-E. Future: Increase readiness for RES-E through alignment of electricity market regulations (gate closure, balancing markets, etc.); incentives for flexibility options? Cooperation of regulators (ACER) Transmission network development Multi-country market coupling RES-E priority or guaranteed grid access & priority dispatch Common (best) practice Cooperation Coordination Harmonisation Electricity market framework ECOFYS 13/06/2013 Dr. Corinna Klessmann, Dr. Isabelle de Lovinfosse

12 There are multiple support elements that benefit from joint principles and coordination Joint ambitions Common risk mitigation & allocation rules (e.g. for policy adjustments) & growth pathways Support scheme Support level & underlying methodology Common calculation methodology for LCOE & reference electricity prices Level/limitation of investment risk (market revenue risk, policy risk, etc.) Alignment to institutional, regulatory and market framework ECOFYS 13/06/2013 Dr. Corinna Klessmann, Dr. Isabelle de Lovinfosse