100% RENEWABLEENERGY SYSTEM

25 May 20166th China International Energy Storage Station Congress

Conference & Exhibition Center, Shenzhen, China

Pasi Vainikka

Principal scientist, VTT Technical research centre of FinlandAdjunct professor, Lappeenranta university of technology LUT

/ CONTENTS 1. Climate targets

2. Technology space and theongoing disruption

3. Case: North-East Asiarenewable power system andthe role of energy storages

/ CLIMATETARGETS

/ TECHNOLOGIES

NUCLEAR

CCS

RENEWABLES

Great electrification

/ ARCHITECTURE

SOLAR AND WIND

NEOCARBONISATION

BRIDGING

STORAGE

Currentbusiness

New businessopportunities

/ DISRUPTION

Natural gas

Coal

Oil

LNG

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Natural gas

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Solar PV

Natural gas

Coal

Oil

LNG

Wind Power

Li-ion battery

Power-to-gas

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Solar PV

RESIDENTIAL

COMMERCIAL

INDUSTRIAL

POWER PLANT

ONE-WAY POWER SYSTEM

TRANSMISSION

/ NORTH-EAST ASIANSUPER GRID FOR100% RENEWABLEENERGY POWERSUPPLY

WP2: Energy System AnalysesWP2: Energy System Analyses

WP3: New Business arising from theEnergy Market’s Strategic ChangeWP3: New Business arising from theEnergy Market’s Strategic Change

WP4: Process simulationand modellingWP4: Process simulationand modelling

WP5: PtX conversionprocess developmentWP5: PtX conversionprocess development

WP6: International collaborationWP6: International collaboration

WP7:Management, disseminationWP7:Management, dissemination

WP1: Neo-Carbon Enabling Neo-GrowthSociety – Transformative Energy Futures

Project work packages

Thank you to the team!Lead by Christian Breyer, professor for solar economy

The authors gratefully acknowledge the public financing of Tekes, the Finnish FundingAgency for Innovation, for the ‘Neo-Carbon Energy’ project under the number 40101/14.

For your referenceNorth-East Asian Super Grid for 100% renewable energy supply: Optimal mix of energy technologies for electricity, gas and heatsupply options. Article in Energy Conversion and Management 112:176-190. March 2016.https://www.researchgate.net/publication/291556438_North-East_Asian_Super_Grid_for_100_renewable_energy_supply_Optimal_mix_of_energy_technologies_for_electricity_gas_and_heat_supply_options

North-East Asian Super Grid for 100% Renewable Energy Power Supply: Distributed Small-scale and Centralised Large-scaleSolar PV as a Major Energy Source. Conference Paper. September 2015. 31st EU PVSEC, At Hamburg.https://www.researchgate.net/publication/282027280_North-East_Asian_Super_Grid_for_100_Renewable_Energy_Power_Supply_Distributed_Small-scale_and_Centralised_Large-scale_Solar_PV_as_a_Major_Energy_Source

North-East Asian Super Grid: Renewable energy mix and economics. Article in Japanese Journal of Applied Physics54(8S1):08Kj01. August 2015. https://www.researchgate.net/publication/280098413_North-East_Asian_Super_Grid_Renewable_energy_mix_and_economics

North-East Asian Super Grid: Renewable Energy Mix and Economics. Conference Paper. November 2014. 6th World Conferenceon Photovoltaic Energy Conversion (WCPEC-6), At Kyoto. https://www.researchgate.net/publication/268743535_North-East_Asian_Super_Grid_Renewable_Energy_Mix_and_Economics

Strategic target:simulation of global energy internet

Objective of the current workDefinition of an optimally structured energy system based on 100% RE supply

• optimal set of technologies, best adapted to the availability of the regions’ resources,• optimal mix of capacities for all technologies and every sub-region of North-East Asia,• optimal operation modes for every element of the energy system,• least cost energy supply for the given constraints.

LUT Energy model, key features• linear optimization model• hourly resolution• multi-node approach• flexibility and expandability

Input data• historical weather data for: solar irradiation, wind

speed and hydro precipitation• available sustainable resources for biomass and

geothermal energy• synthesized power load data• gas and water desalination demand• efficiency/ yield characteristics of RE plants• efficiency of energy conversion processes• capex, opex, lifetime for all energy resources• min and max capacity limits for all RE resources• nodes and interconnections configuration

Scenarios assumptions15 regions

• West and East Japan (divided by 50/60Hz border)

• South and North Korea• 8 regions in China (based on State

Grid Corporation of China grid)• Mongolia• Russian regions: East Siberian and

Far East economy districts

Key data• ~1550 mio population• ~10000 TWh electricity demand (2030)• ~1653 GW peak load (2030)• ~22 mio km2 area• ~142 bil m3/a water desalination

demand (2030)

Capacity additions

Cumulative capacity

MethodologyFull system

Renewable energy sources• PV ground-mounted(optimally tilted)• PV rooftop• Wind onshore• Hydro run-of-river• Hydro dam• Geothermal• CSP• Waste• Biogas• Biomass

Electricity transmission• node-internal AC transmission• interconnected by HVDC lines

Storage options• Batteries• Pumped hydro storages• Thermal energy storage, Power-to-Heat• Gas storage based on Power-to-Gas

• Water electrolysis• Methanation• CO2 from air• Gas storage

Energy Demand• Electricity• Water Desalination• Industrial Gas

Scenarios assumptionsGrid configurations

Assumption

Scenarios

Regional-wideopen trade

Country-wideopen trade

Area-wideopen trade

Area-wide open tradeDes-Gas

PV self-consumption X X X X

Water Desalination XIndustrial gasdemand X

• Regional-wide open trade• (no interconnections between regions)

• Country-wide open trade• (no interconnections between countries)

• Area-wide open trade• (country-wide HVDC grids are interconnected)

• Area-wide open trade with waterdesalination and industrial gas production

Scenarios assumptionsFinancial assumptions (year 2030)

Technology Capex[€/kW]

Opex fix[€/kW]

Opex var[€/kWh]

Lifetime[a]

PV fixed-tilted 550 8 0 35PV rooftop 813 12 0 35PV 1-axis 620 9 0 35Wind onshore 1000 20 0 25Hydro Run-of-River 2560 115.2 0.005 60Hydro Dam 1650 66 0.003 60Geothermal 4860 87 0 30Water electrolysis 380 13 0.001 30Methanation 234 5 0 30CO2 scrubbing 356 14 0.0013 30CCGT 775 19 0.002 30OCGT 475 14 0.011 30Biomass PP 2500 175 0.001 30Wood gasifier CHP 1500 20 0.001 40Biogas CHP 370 14.8 0.001 20Steam Turbine 700 14 0 30

Technology Capex[€/(m3∙h)]

Opex fix[€/(m3∙h)]

Opex var[€/(m3∙h)]

Lifetime[a]

Water Desalination 815 35 0 30

Generation costsTechnology Energy/Power Ratio [h]Battery 6PHS 8Gas Storage 80*24

Efficiency [%]Battery 90PHS 92Gas Storage 100Water Electrolysis 84CO2 Scrubbing 78Methanisation 77CCGT 58OCGT 43Geothermal 24MSW Incinerator 34Biogas CHP 40Steam Turbine 42CSP collector 51

Technology Capex[€/kWh]

Opex fix[€/(kWh∙a)]

Opex var[€/kWh]

Lifetime[a]

Battery 150 10 0.0002 10PHS 70 11 0.0002 50Gas Storage 0.05 0 0 50

Technology Capex[€/(m3∙h)]

Opex fix[€/(m3∙h∙a)]

Opex var[€/(m3∙h)]

Lifetime[a]

Water Storage 65 1 0 50

Technology Capex[€/(m3∙h∙km)]

Opex fix[€/(m3∙h∙km∙a)]

Opex var[m3∙h∙km]

Lifetime[a]

Horizontalpumping 15 2.3 0.0004 30

Vertical pumping 23 2.4 0.0036 30

Technology Capex[€/(kW∙km)]

Opex fix[€/(kW∙km∙a)] Opex var [€/kW] Lifetime

[a]TransmissionLine 0.612 0.0075 0 50

Technology Capex [€/kW] Opex fix [€/(kW∙a)] Opex var [€/kW] Lifetime [a]Converter Station 180 1.8 0 50

Scenarios assumptionsFinancial assumptions (year 2030)

Storage and transmission costs

WACC = 7%

Scenarios assumptionsFull load hours

Region PV fixed-tilted FLH

PV 1-axisFLH

CSPFLH

WindFLH

East Japan 1316 1536 1230 3362West Japan 1365 1604 1288 3204South Korea 1467 1733 1486 2946North Korea 1469 1749 1495 2890Northeast China 1457 1832 1706 3519North China 1592 2011 1844 3541East China 1340 1549 1228 2083Central China 1471 1726 1284 2608South China 1435 1678 1208 2310Tibet 1983 2719 2417 5208Northwest China 1739 2221 1963 3703Uygur 1666 2124 1957 2724Mongolia 1572 2062 1975 3288Russia Siberia 1158 1476 1380 3082Russia Far East 1136 1477 1397 2712

FLH of region computed as weighed average of regionalsub-areas (about 50 km x 50 km each):

0%-10% best “sub-areas” of region – 0.310%-20% best “sub-areas” of region – 0.320%-30% best “sub-areas” of region – 0.230%-40% best “sub-areas” of region – 0.140%-50% best “sub-areas” of region – 0.1

Data: based on NASA (Stackhouse P.W., Whitlock C.H., (eds.), 2009. SSE release 6.0)reprocessed by DLR (Stetter D., 2012. Dissertation, Stuttgart)

Scenarios assumptionsPV and Wind LCOE (weather year 2005, cost year 2030)

Scenarios assumptionsGeneration profile (area aggregated)

PV generation profileAggregated area profile computed usingearlier presented weighed average rule.

Wind generation profileAggregated area profile computed usingearlier presented weighed average rule.

Scenarios assumptionsLoad (area aggregated)

Total load (2030)Synthesized load curves for each region

Total load (2030)- excluding PV prosumers

Key insights:• PV self-consumption reduces peak load by about 13%• grid cost reduced by PV self-consumption

/ RESULTS

Results

LCOW: 0.98 €/m3

LCOG: 0.142 €/kWh,gas

2030 ScenarioTotalLCOE

LCOEprimary LCOC LCOS LCOT Total ann.

costTotal

CAPEXRE

capacitiesGeneratedelectricity

[€/kWh] [€/kWh] [€/kWh] [€/kWh] [€/kWh] [bn €] [bn €] [GW] [TWh]Region-wide 0.077 0.042 0.003 0.032 0.000 790 6722 6642 12447Country-wide 0.072 0.041 0.003 0.025 0.003 724 6326 5891 11993Area-wide 0.068 0.041 0.002 0.021 0.004 697 6171 5609 11753Area-wideDes-Gas*,** 0.058 0.038 0.002 0.013 0.005 876 7939 7057 15322

TotalLCOE***

prosumer

LCOEprimary

prosumer

LCOSprosumer

Total ann.Cost

prosumer

TotalCAPEX

prosumer

REcapacitiesprosumer

Generatedelectricityprosumer

[€/kWh] [€/kWh] [€/kWh] [bn €] [bn €] [GW] [TWh]0.092 0.052 0.040 142 1290 1492 2184

* additional demand 82% gasand 18% desalination

** LCOS does not include the costfor the industrial gas (LCOG)

*** fully included in table above

ResultsComponents of LCOE – area-wide open trade and area-wide desalination gas

Area-wide open trade

Area-wide open trade desalination gas

ResultsSelf-Consumption – North-East Asia super-region area-wide open trade

2030RES COM IND

Electricity price [€/kWh] 0.152 0.143 0.142PV LCOE [€/kWh] 0.030 0.040 0.040Self-consumption PV LCOE [€/kWh] 0.047 0.056 0.054Self-consumption PV and Battery LCOE [€/kWh] 0.089 0.092 0.092Self-consumption LCOE [€/kWh] 0.078 0.085 0.086Benefit [€/kWh] 0.074 0.058 0.056

Installed capacities RES COM INDPV [GW] 307 286 900Battery storage [GWh] 410 339 1190

Generation RES COM INDPV [TWh] 443 413 1328Battery storage [TWh] 131 108 384Excess [TWh] 146 104 312

Utilization RES COM INDSelf-consumption of generated PV electricity [%] 63.7 72.0 73.3Self-coverage market segment [%] 18.2 14.4 15.1Self-coverage operators [%] 90.8 72.0 75.7

Source (electricity prices): Gerlach A., Werner Ch., Breyer Ch., 2014. Impact of Financing Cost onGlobal Grid-Parity Dynamics till 2030, 29th EU PVSEC, Amsterdam, September 22-26

ResultsInstalled Capacities

2030Scenario

Wind PV HydroRoR

Hydrodams

Biogas Biomass Waste Geothermal Battery PHS PtGelectrolyzers GT

[GW] [GW] [GW] [GW] [GW] [GW] [GW] [GW] [GWh] [GWh] [GWel] [GW]

Region-wide 1733 3951 115 191 66 80 5 6.5 5423 98 323 540Country-wide 1930 3093 115 191 99 67 4 6 4270 98 221 433Area-wide 2034 2750 112 195 110 67 4 6 3734 105 173 381Area-wideDes-Gas 2435 3929 113 195 54 50 4 5 4060 105 550 294

2030Scenario

PV0-axis

PV1-axis

PVprosumers

PVtotal

Batterysystem

Batteryprosumers

Batterytotal

[GW] [GW] [GW] [GW] [GWh] [GWh] [GWh]Region-wide 481 1977 1493 3951 3485 1938 5423Country-wide 72 1528 1493 3093 2332 1938 4270Area-wide 1 1256 1493 2750 1796 1938 3734Area-wideDes-Gas 1 2435 1493 3929 2122 1938 4060

ResultsRegions Electricity Capacities – area-wide open trade

• Importing regions generateeconomic benefit from significantlocal PV self-consumption share

Key insights:• Area-wide desalination gas scenario

is dominated by PV• PV 1-axis and wind are the main

sources of electricity for waterdesalination and industrial gasproduction, especially for importingregions

Key insights:• Area-wide scenario

shows high PVcapacities due to(prosumer) LCOEcompetitiveness inmajority of theregions

Area-wide open trade

Area-wide open trade desalination gas

ResultsImport / Export (year 2030)

Area-wide open trade

Key insights:• Net Importers: Japan, South Korea, East China• Net Exporters: Russia, Tibet, North and Northwest China

0100200300400500600700800900

1000

Independent sectors Integrated system

Tota

lann

ualc

ost(

bn€)

Axis Title

02000400060008000

1000012000140001600018000

Independent sectors Integrated system

Tota

lEle

ctric

ityge

nera

tion

RE

(TW

h)

ResultsBenefits of electricity and industrial gas sectors integration – Area-wide desalination gas

Key insights:• integration benefits: decrease in total

electricity demand and total annuallevelized cost

• descrease in total electricity curtailmentlosses of 17% (163 TWh absolute) and intotal capex by 6% (55 bn€ absolute)

Ind Gas SectorDesalinationSector

Power Sector

Ind Gas Sector

DesalinationSector

Power Sector

6% relative integration benefit55.2 bn€ absolute integration benefit

4.3 % relative integration benefit688 TWh absolute integration benefit

/ STORAGES

ResultsStorages

Storage capacities Throughput of storages Full cycles per year

2030 ScenarioBattery PHS Gas Battery PHS Gas Battery PHS Gas[TWhel] [TWhel] [TWhth] [TWhel] [TWhel] [TWhth] [-] [-] [-]

Region-wide 5.4 0.1 492 1674 22 1069 308.6 219.7 2.2Country-wide 4.3 0.1 470 1358 23 846 318.1 232.7 1.8Area-wide 3.7 0.1 441 1203 26 710 322.3 248.5 1.6Area-wideDes-Gas 4.1 0.1 462 1267 24 349 312.1 226.3 0.8

ResultsStorages Capacities – area-wide

Key insights:• Hydro dams as virtual battery very

important, batteries in a key role forprosumers but also on the grid level andgas storages for balancing periods ofwind and solar shortages

/ HOURLYOPERATION

ResultsNet importer region – South Korea

ResultsBalancing region – Northwest China

ResultsNet exporter region – Tibet

As complex as it can get?Case East Japan 2050

/ ENERGYEFFICIENCY!

ResultsEnergy flow of the System of area-wide open trade (2030)

ResultsEnergy flow of the System of area-wide open trade desalination gas

(2030)

ResultsEnergy flow of the System of region-wide open trade scenario (2030)

Key insights:• Even for region-wide open trade scenario CSP and thermal

storages do not play a significant role. PV in total is a majorenergy source.

Summary• 100% Renewable Energy system is reachable in North-East Asia!• super grid interconnection decrease average cost of electricity to 0.068 €/kWh of the total area from 0.072

€/kWh (country-only) and 0.077 €/kWh (region-only)• integration benefit of gas and desalination is about 4-6% (generation and cost ) due more efficient usage

of storage and flexibility options• in 2030, for region scenario PV technologies dominate in the electricity sector in most regions of North-

East Asia, however for country and area-wide open trade scenarios wind starts to play the most importantrole

• hydro dams can be used as a virtual battery for solar and wind electricity storage, in the same time RoRhydro is not cost competitive to PV and Wind

• the shift to power in the gas, desalination, heat and mobility sector will be driven by higher supply of leastcost solar PV and wind sites

• despite an upper limit 50% higher than the current capacity for hydro dams and RoR, in all the consideredscenarios PV and wind are more profitable technologies according to the availability of the regions’resources

• 100% RE system is more cost competitive than a nuclear-fossil option!

/ CONTACTVTT TECHNICAL RESEARCH CENTRE OF FINLANDMr Pasi VAINIKKADSc (Tech.)Principal Scientist, Adjunct Professor

Skinnarilankatu 34, LappeenrantaP.O.Box 20, FI-53851 LAPPEENRANTA, FINLAND

Tel. +358 40 5825 987pasi.vainikka@vtt.fiwww.neocarbonenergy.fifacebook.com/neocarbonenergyTwitter: @neocarbonenergy

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