Lessons learnt from deregulation in Western Europe on the example of energy storage Christian Egenhofer Associate Senior Research Fellow, Centre for European Policy Studies (CEPS) Visiting Professor, SciencesPo (Paris), College of Europe (Bruges & Natolin), Guido Carli University LUISS (Rome) Tirana International Hotel, Tirana, 21st and 22nd October 2014 Thinking ahead for Europe • Centre for European Policy Studies (CEPS) • www.ceps.eu The Future Role of Energy Storage in South Eastern Europe
Transcript
Lessons learnt from deregulation in Western Europe on the example of energy storage
Christian Egenhofer
Associate Senior Research Fellow, Centre for European Policy Studies (CEPS)
Visiting Professor, SciencesPo (Paris), College of Europe (Bruges & Natolin), Guido Carli University LUISS (Rome)
Tirana International Hotel, Tirana, 21st and 22nd October 2014
Thinking ahead for Europe • Centre for European Policy Studies (CEPS) • www.ceps.eu
The Future Role of Energy Storage in South Eastern Europe
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About CEPS ……
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Storage in • Regulated markets (up to 1990)
• After liberalisation (1990 to 2009)
• After Renewable Energy boom (post 2009)
More EU lessons
EU agenda
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Storage in regulated market
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Storage is function of generation system
e.g. Nuclear countries: to optimise nuclear power generation
Options Storage: -Pumped storage (flexibility)
Load shifting: -Special night tariffs (load shifting) -Night-storage heater -Night water heating -…
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Other: -Lighting of motorways (Belgium) -Exports (France-Italy) -…
Storage has implicit value (defined by regulator)
Interconnections
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Functionality are the same
• Flexibility (stability and optimisation of generation
assets)
Storage in a liberal market
Storage has price: = explicit value (set by the market)
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Politicians
Government
Power € Exchanges
TSO
Competing Electricity retailer
Competing Electricity retailer
Competing Electricity retailer
Competing Generator 1 Large ind. customers
Regulator Large ind. customers (with self-generation)
Small ind. customers
Commercials
Households
Competing Generator 2
Subsidised Renewables Generator
TSO = Transmission Systems Operator DSO = Distribution System Operator
Storable electricity Generator
Storage in a liberal market
DSO
Demand response/load
shedding: Large ind. customers
0
10
20
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40
50
60
70
80
90
100
0 2 4 6 8 10 12 14 16 18 20 22
Wh
ole
sale
mar
ket
pri
ce (€
/MW
h)
Hour of the day
2008
Prices (Germany) 2008
Annual average (€/MWh) 65.7
Average, 11am (€/MWh) 93.3
Average, 03am (€/MWh) 35.4
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Hydropower
Nuclear Power
TWh/year
Capacity
Back Pressure
Demand
Gas Turbines
Coal
Condensers
3002001000 400
Oil
marginal
cost
€/MWh
Figure 1. Impact on power prices in the Nordic region
5 €/ton
10 €/ton
20 €/ton
0
Source: Vattenfall.
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Functionalities are the same
• Flexibility (stability and optimisation of generation
assets)
Storage after renewable boom
Storage has price = explicit value (decreases)
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0 2 4 6 8 10 12 14 16 18 20 22
Wh
ole
sale
mar
ket
pri
ce (€
/MW
h)
Hour of the day
2008 2013
Installed capacity 2008 2013
Solar PV, DE (GW) 6 36
Wind, DE (GW) 24 33
Prices (Germany) 2008 2013
Annual average (€/MWh) 65.7 37.8
Average, 11am (€/MWh) 93.3 43.4
Average, 03am (€/MWh) 35.4 23.3
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Pumped storage business model does not work any longer
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In closing: more EU lessons …
• Energy = security & sovereignty energy policies are national
• EU energy policies are national -> Art. 194 II Lisbon Treaty
