TEPCO Initiatives to Integrate

Renewable Energy Resources

into the Electricity Market

Hiroshi Okamoto, Ph.D.

Managing Executive Officer

Tokyo Electric Power Company

Outline

1. Electricity Market Reform in Japan and

TEPCO’s Activities

2. Challenges for Integrating Renewable

Energy into the Electricity Market

3. Subjects to be Addressed and Our

Perspective

Electric Power System : Platform of the Electricity Market

Wholesale Transmission & Distribution Retail

Generation Transmission DistributionCustomers’

Facility

Electric power system is a market place platform which matches consumptions and generations of electricity via electric power network.

TEPCO Holdings

TEPCO

Fuel and Power Co.

TEPCO

Power Grid Co.

TEPCO

Energy Partner Co.

Restructuring of Corporate Structure of TEPCO

As of April 1st 2016

Balancing Mechanism after the Market Reform

Generation

Retail

Energy

Transaction

every 30 min

Bilateral /

Spot Market

Adjustment

Adjustment

Power Pool of TEPCO Control

Area

Operator of Power Pool Responsible for

Balancing and Congestion Management

TEPCO Power Grid

Generation

5

Strengthening the Energy Value Chain

T&DDistributedGeneration

Customer

Streamlining and Optimizationof the Assets and Operation

Growth in LowCarbon Assets

Consolidation of Upstream

OverseasBusiness

Energy Efficiency,Energy Management

O&M and Finance

Innovative Servicesfor Productivity

Combined with IoT

Flexibility for Balancing and Optimization

IntegratedGrid

Platform

Three Issues of Renewables Integration into the Market

1. Flexibility Resource to Accommodate

Variable Renewables

2. T&D Network Capacity Enhancement and

Congestion Management

3. Economy of Renewables

可変速揚水発電設備の外観

Pumped hydro can store/generate the electricity

to minimize the gap between renewable energy

output and demand.

Pumped hydro is one of the major flexibility

resources to integrate more renewables in

Japan.

Pumped Hydro Power Storage for Flexibility Enhancement 7

Flexibility Provided by Pumped Hydro Storage

Operation

ベースロード電源

風力

太陽光

火力電源（最低出力）

揚水の活用による調整

再エネの出力抑制

火力の下げ代

（揚水発電）

需要

（揚水動力）

（揚水動力）

再エネ導入量

抑制時間

揚水なし当社揚水全台活用

揚水発電の活用により再エネ統合拡大

Renewables

Curtailment

Without Pumped

With Pumped

RES CurtailmentStorage Operation

Minimum Output of Fossil Power

and Baseload Generation

Wind

PV

Overview of Pumped

Hydro Facility

De

ma

nd Flexibility

provided by

fossil power

8

Advanced Technologies Needed for Flexibility Enhancement

(National Project funded by NEDO)

Variable

Output

RES

(Renewable Energy Sources)

Wide-Area coordination

Forecast & Estimation

Reduction

Control

Generation Resources

Central Load Dispatching Office Control

On-line and Real-time Control

Control Area B

DR Resources

Battery・EV

・HP, etc

Smart Meter

Online Telemetries,Regulation Signals

Control

Control

Forecast &Estimation

Control

OCCTO*

Control Area A

-utilization of the pumping storages

-enhancing the flexibility of control

of thermal power generators

generation side

demand side

・RES energy output (MWh)

・fluctuation characteristics(long/short time horizon)

D-1, 15～30min ahead, or real-time reduction

*Organization for Cross-area Coordination of Transmission Operators

Multi-area Coordination of Flexibility Resources

Multilateral TSO-TSO coordination will maximize flexibility of the grid to accommodate further variable RES.

Inter-area ancillary service market is needed to procure and provide flexibility

ΔPT

Thermal

Thermal

Hydro

Thermal

0

MAX

(i)RES increase

(ii) distribute

RES increase

in each area

Central dispatch center

(TSO B)

Area A

Inter regional tie line

Area B

regulate0

MAX

(iii) regulate

(decrease output)

OCCTO

Hydro

Wind

0

MAX

(iii) regulate

(decrease output)

regulate

Central dispatch center

(TSO A)Provide the flexibility

Procure and pay for the flexibility

Sustainability of Flexible Resources

Installed Capacity (MW)

Pric

e($

/MW

h)

Pric

e($

/MW

h)

Without the RES integration

With the RES integration

(Ref) IEA GIVAR Report Fig 2.1

RES

It will be difficult to maintain GTCC providing flexibility because of decrease

in market clearing price and capacity factor of the unit. Capacity mechanism

will be needed to recover the fixed cost of the flexibility resources.

Concluding Remarks and Our Perspective

Flexibility enhancement and transmission/distribution capacity

enhancement or allocation will be needed to integrate the further

renewable resources.

The market-based and cost-effective measures will be desired.

1. Inter-regional flexibility procurement/provision through ancillary

service market.

2. Market-based allocation of the transmission capacity

The following issues should be addressed.

1. Cost allocation mechanism given the desired future energy mix.

2. Demand side measures for decreasing CO2 and increasing

flexibility (e.g. Electric Vehicle, Heat Pump Hot Water Server)

3. Sustainability of the enterprise providing the flexibility resources

12Towards a Digital Utility through Three Layers of Value Chain