Combining Energy Networks: The Impact of Europe's Natural Gas Network
on Electricity Markets till 2050 Jan Abrell, Hannes Weigt, Clemens Gerbaulet, Franziska Holz
19.04.2013, Dresden
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Agenda
1. Coupled Energy Markets
2. Model Setup
3. Results
4. Conclusion
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Electricity and Gas Linkage
• Energy Markets are interlinked (local as well as global)
• Gas is considered the most important fossil fuel for electricity markets (golden age of gas?)… while Germany shouts down some gas plants due to lack of profitability…
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Modeling the interaction of Energy Networks
Problem:
• Linkage of energy markets via electricity fuel input
• Most primary fuel markets have an underlying network topology
• Electricity markets are a pure network market
Interaction of „normal“ price effects and network effects
Integrated assessment necessary, but rarely done
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Agenda
1. Coupled Energy Markets
2. Model Setup
3. Results
4. Conclusion
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Model
Gas wholesale market
Gas final market
Electricity wholesale market
Electricity final market
Final demand
gas
Final demand
electricity
Electricity generation
Pipeline operator
LNG trader Trader
pipeline gas
Gas producer
System operator Pipeline market
Fuel market
Natural gas Transmission service Electricity
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Market Data
• All European network nodes plus outside suppliers (pipe + LNG)
• One node per country, concentrating supply and demand
• Network capacities between nodes are constrained, within countries unlimited
• 44 zones in Continental Europe (ENTSOE synchronized grid)
• In each zone, conventional and renewable generation and electricity demand
• PTDF for zonal grid
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Agenda
1. Coupled Energy Markets
2. Model Setup
3. Results
4. Conclusion
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EMF 28 Scenarios: “The Effects of Technology Choices on EU Climate Policy”
Technology dimensionDefault w
CCSDefault w/o CCS
Pessimistic Optimistic Green
CCS on off off on offNuclear energy ref ref low ref lowEnergy efficiency ref ref ref high highRenewable energies ref ref ref ref optPolicy dimension for the EU Policy dimension for the Rest of the World (ROW)No policy baseline (no policy, also without the 2020 target) no policy EU11Reference: including the 2020 targets and 40% GHG reduction by 2050
"moderate policy" scenario ModPol; no emission trading across macroregions (but trade within macroregions e.g. within EU) EU1 EU2 EU3 EU4 EU5
Mitigation1: 80% GHG reduction by 2050 (with Cap&Trade within the EU)
"moderate policy" scenario ModPol; no emission trading across macroregions (but trade within macroregions e.g. within EU) EU6 EU7 EU8 EU9 EU10
Mitigation2: 80% GHG reduction by 2050 (with Cap&Trade within the EU)
IMAGE2.9 scenario; full emission trading for ROW, but no emission trading between ROW and EU. Regional relative contributions to mitigation based on the Mitigation 1 scenario EU12 EU14
Mitigation3: global 480ppme target with full Cap&Trade
IMAGE2.9 scenario; emission trading is allowed between all regions EU13 EU15
Scenario package for the models that go for the technology dimension (11 Scenario package for the models that go for the policy dimension (7 altogether)included in both scenario packagesAdditional optional scenarios for models that go for the policy dimension
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Going Green, but When?
• RES will provide large share of future EU electricity generation, difference mostly in the specific timing
• Renewable Supply requires large overcapacities due to low utilization levels of wind and solar
• Emitting generation is basically ‘dead’ by 2050
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Doing the Ususal Business, EU 1
If the TYNDP is realized as projected:
Network congestion is similar range as 2010 (in money terms)
Price level mostly defined by global fuel price developments, less by regional aspects
€/MWh <20 20-30 30-40 40-50 50-60 >60
2010 2030 2050
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Going Green, EU 10
A strong increased and fastened RES extension leads to:
Significant price dump (merit-order effect)
Network utilization strongly influences by local RES injection, but price effects small due to low price level
€/MWh <20 20-30 30-40 40-50 50-60 >60
2010 2030 2050
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Peak Load Conditions
• Under BAU conditions (EU 1) high load leads to high prices all over the place (as conventionals set the price everywhere)
• Under Grenn conditions (EU 10) local differences prevail, as some regions have sufficient RES supply
2010
2050 EU 10
2050 EU 1
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Role of Gas in Europe
Europe's gas supply strongly dependents on imports (ca. 64% of EU demand):
1. Russia (34%) 2. Norway (30%) 3. Africa (23%) 4. Others (13%)
Ignoring Norway, 80% of imported natural gas originates in regions that experiences supply
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More RES, Less Dependence?
Decreasing gas demand, projected extension of gas infrastructure and an increased RES share reduce the import dependence and the impact of sudden shortages in the long run
€/MWh <-5 -5 - 0 0-5 5-10 10-15 >15
2010 2030 2050
Russian Gas Cut
African Gas Cut
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Agenda
1. Coupled Energy Markets
2. Model Setup
3. Results
4. Conclusion
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Conclusio
How will Europe's energy future look like?
No one knows for sure…
…but what do we already know now? Electricity supply is largely influenced by political decisions (= policy
defines development path, the rest follows from there on)
Network extensions crucial for reaping locational RES potentials
Gas market is less of a problem, if targeted efficiency achievements and extensions take place (maybe even an overcapacity problem)
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Contact:
Hannes Weigt Forschungsstelle Nachhaltige
Energie- und Wasserversorgung Universität Basel
fonew.unibas.ch