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Policy makers and planners have long recognized the critical role that assessing capacity sufficiency plays in maintaining power system reliability, which, in turn, is critical to keeping economies running smoothly and providing social support for the ongoing global low-carbon energy transition. play a vital role. The large-scale development of wind and solar energy presents new challenges for power system planning. While some countries have demonstrated that high-volatility renewable energy systems are compatible with reliable electricity supply, they do introduce more uncertainty and thus complicate the assessment and planning process. In addition, planners have had to incorporate new practices in areas such as EV charging and demand-side flexibility.
In 2021, many provinces in China will experience power outages and power shortages. While the reasons for the outages were varied, the outages in September and October 2021 were primarily related to market factors, namely the mismatch between high coal prices and the fixed price of electricity from coal-fired plants. This has resulted in a shortage of physical fuel for many coal-fired power plants and have to operate at low capacity factors. While this event appears to be primarily related to market design rather than system sufficiency planning, any power shortage or blackout inevitably raises the demand for more reliable capacity on the supply side. It is true that the Chinese government has not only responded to the shortage by raising electricity prices and limiting coal mine profits, but has also instituted new regulations aimed at increasing the capacity of coal-fired power plants. Older, less efficient coal-fired plants should go into reserve when they are decommissioned, and the government will require coal power companies to operate at least as high a price as in previous years. The growing emphasis on energy security, especially supply security, in government documents could lead to an acceleration in the construction of new coal-fired capacity to meet peak loads.
The purpose of this report is to explain and illustrate how Germany and Europe have adapted their systems assessment and planning processes to ensure that the decommissioning of conventional coal and nuclear power plant capacity is perfectly compatible with reliability and energy security goals. After all, Germany has the most reliable power system in the world – the latest system adequacy study to 2030 shows that even if Germany is about to phase out its last remaining nuclear power plants and most of its coal power capacity by the end of this decade, the probability of Germany being short of electricity this year (LoLP) is also 20 times safer than current standards in the country. However, as the analysis is based on assumptions made on Germany’s past policy goals, which have changed a lot in the meantime, future updated capacity adequacy assessments may yield slightly different results. Germany has also experienced periods known as “dark doldrums” — periods in the fall and winter when wind speeds drop and solar power production falls with it. In fact, the seasonal downturn in wind and solar in Germany is far more pronounced than in China. China’s winter sunshine is more consistent, and wind output usually peaks in the cooler months. Given that renewables in Europe and Germany already account for a significant share of their electricity production, incorporating weather uncertainty into capacity adequacy assessments has become a key element. The above work should be done in conjunction with modeling uncertainty about short-term disruptions to conventional power plants, transmission lines, and fossil fuel supplies, as well as long-term demand growth that may be triggered by climate events or vehicle electrification.
In addition, modeling the realistic level of uncertainty is also very important, and the method used for modeling should not bias planning results in favor of more expensive power generation and storage to install, but should give priority to transmission, cross-border power Relatively more cost-effective investments in terms of transactions and demand-side flexibility. As we show in this report, although still at an early stage, European approaches to assessing capacity adequacy are beginning to take these factors into account. Several recent studies of other markets have shown that, as more and more storage capacity comes online, a modest amount of storage—mostly short-term storage, such as 4-hour storage capacity—is critical in ensuring that every megabyte is fully utilized. Watts of wind or solar capacity will play a huge role in meeting peak loads.
Finally, while this report focuses on the technical aspects of system adequacy assessments in Europe and Germany, the concepts discussed here are not only relevant to technologists, but also to policymakers. The planning and assessment of power systems exists not only in the field of technical reporting, but also in the field of public policy. For policymakers, such assessments can be used when setting high-level renewable energy or carbon targets. In the event of a power outage or power shortage, experts and policy makers can use the analysis to address simplifications such as establishing “more reliable baseload energy” or force “all renewables to be equipped with costly consumers” One-size-fits-all approaches such as “resident energy storage facilities” are directly rejected. Proper assessments will not only help maintain normal operations, but also contribute to more fruitful public discussions on the role and value of renewables in the energy transition. Therefore, planners and policymakers should strive to make this process accessible and understandable to a wider audience, even as its data requirements and methodologies become increasingly complex.
This report provides an overview of current and expected future power system planning and assessment practices in Germany, and analyzes the methodologies used in various publications published by relevant German power system planning agencies over the past decade. These agencies include: the German Transmission System Operator, the Federal Ministry for Economic Affairs and Climate Action (by the end of 2021 the Ministry of Economic Affairs and Energy) and the German Federal Network Agency. In addition, the report presents the methodology used by the European Network of Transmission System Operators (ENTSO-E) in the relevant assessment at the European level. The conclusions and underlying methods of both were used in the evaluation and methodology development in Germany.
As the report shows, the methods developed and applied in Germany share some commonalities, particularly in moving from deterministic calculations to probabilistic assessments of weather and other events, as well as expanding the geographic scope of the analysis. The methods also appear to be converging over time. The current debate shows the need to incorporate grid and system adequacy assessments, hitherto largely provided by transmission system operators (TSOs), into overall capacity assessments. This development also confirms our expectation that phasing out coal power will allow Germany to include more capacity and grid adequacy assessments.
This report is one of many examining EU power system planning and assessment practices that have implications for China and other countries’ transition to low-carbon energy systems. The ENTSO-e China Power Grid Planning Modelling Demonstration Report, published by the EU-China Energy Cooperation Platform (ECECP) in November 2021, describes the planning method for a single transmission line and selects some potential new transmission lines to apply the method in China. While the EU-China Energy Cooperation Platform report focuses primarily on transmission planning, this report focuses on the broader issue of capacity adequacy – but given the role that transmission plays in ensuring capacity adequacy within interconnected regions, the two are clearly related. The two reports are complementary in some respects and can be read together.
We hope this research will help policymakers in China and elsewhere understand the continuing evolution of system adequacy planning in Germany and Europe, and how they are moving towards making a positive contribution to the low-carbon energy transition. We believe that in the process of building a new energy-based power system in China, sharing the experience and methods of system adequacy will be enlightening to all parties, which will not only help us ensure reliable power supply, but also help policy-making how to build a clean, reliable and cost-effective future energy system.
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