Category Archives: Energy supply

Danmark 2012: 30% wind power and no curtailment at all – how is it possible?

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2012 was a new record year for wind power in Denmark. Last year the wind power production in Denmark amounted to 30% of the Danish electricity consumption, while in 2011 the figure was 28,2%. This is of course good news for the global environment but due to Denmark’s small size the biggest contribution to the global environment might not be the CO2 reduction itself but the Danish showcase: It is possible to have a high share of fluctuating electricity production in the energy system without curtailment at all. And 30% is only a step towards the even more ambitious target of 50% in 2020. Right now the next off-shore wind farm is being established in Denmark – see the pictures here. (The picture below is the Danish wind farm Middelgrunden near Copenhagen on a cloudy October day in 2012).

Middelgrunden near Copenhagen

But what is the secret behind the large share of wind power, and what can China learn from Denmark?

A number of factors enables the high wind power penetration. Denmark has strong transmission lines to the neighbouring countries and access to hydro power storage in Norway. And a well functioning electricity market ensures optimal use of these interconnectors and the optimal combination of wind power and hydro power. The dynamic pricing of electricity created by the electricity market send price signals hour by hour to the producers and consumers. When the electricity production is high due to wind power and combined heat and power production (CHP), the electricity price is low; and when the wind power production is low (or zero) the price gets higher. This system also gives strong incentives for the power producers to make their thermal power plants more flexible. In facts, some of the coal fired power plants in Denmark can produce electricity and heat at a level of 10% of their maximum capacity. In China the requirements for minimum production is 50% of the max. capacity for the coal-fired power plants. All Danish CHP plants have also heat storage attached, which makes it easier to decouple heat and power production. When the electricity price is high, the CHP plants produces electricity and surplus heat can be stored in the heat storage, which basically is a large water tank. When the electricity price is low, the heat consumption is covered by the heat storage alone. And when the electricity price is very low, it can be beneficial to use electricity to warm up the water in the heat storage instead of running the thermal CHP plant. The combination of wind power, hydro power and thermal CHP plants with heat storage gives a very flexible system which is the physical explanation behind the high RE share in the Danish electricity supply.

To fully understand the Danish success of integrating wind power, you should also take into account the institutional and the “mental” framework for the electricity supply sector. In many countries – also in China – wind power is often regarded as an “add-on” to the “normal” electricity supply based on thermal power plants – fossil fuel or nuclear. The add-on RE power then is supposed to take care of its own problems, e.g. balancing the fluctuating production, and if it is not possible, then the easy solution is to curtail it, e.g. to stop the production from the wind farms, because the wind farm is causing the problem. But in Denmark, wind power is regarding as an integrated part of the electricity supply. Balancing problems is therefore a system problem, not a problem for the wind farms. This mental change in the perception of the electricity system is important for solving the integration challenges. Also the institutional set-up is important. Years ago the electricity sector was one integrated monopoly. Today the Danish grid operator (or Transmission System Operator – TSO) have been totally independent of the electricity producers for more than 12 years and it acts totally neutrally towards all power producers. Furthermore the large power producers in Denmark owns a large share of the wind power plants and integrate them into their portfolio of power plants in the daily operation. And by setting ambitious goals for the further development of RE power in Denmark (50% in 2020, 100% in 2050) the Danish government encourage both the TSO and the power producers to integrate RE in their planning process. The long term grid planning is thereby targeted at making these goal feasible, not only in Denmark but also in a European context, where the European TSO’s makes 10 years grid plans every second year.

And what are the lessons learned for China?

Firstly it is important to start considering RE power as part of the whole electricity system, not as an add-on to the thermal power system. Secondly it is urgent to setup economic incentives for flexibility for the power producers and for the use of local and regional transmission lines. Dynamic pricing is essential, but it is not necessary to introduce a complete market-setup to create this – a system with the system dispatch centres as vehicles for flexibility could be establish without a full market, like in Denmark where the electricity market evolved over a number of years, starting with more simple measures. When such economic incentives are in place, I am quite sure that the technical solution like flexible thermal power plant and heat storage at the CHP plants would develop rapidly.

Also an integrated planning process combining grid planning with planning for energy efficiency and energy supply would strengthen the integration of renewables, the development of smart grids and the use of the energy demand as part of the overall system flexibility. Maybe China could get inspiration from the European approach with the 10 year grid development plans and market studies with an even longer time horizon.

Of course China is China, and she has to develop her own solutions to the energy challenges. The Danish experiences and lessons in integration of RE can however support the analytic development of measures, methodologies and processes, which are necessary for the development of a sustainable energy system with a high share of RE in China. The Sino-Danish RED program is one example on how China and Denmark work together on such a development.


ERI: Make NEA an Energy Ministry focusing on demand side and non-fossil fuels

In a remarkable clear report “China Energy Policy” the Energy Research Institute under NDRC (ERI) recommends much more focus on the energy demand side and on non-fossil energy supply. ERI recommends to strengthen in energy administration by increasing the National Energy Administration grow into an Energy Ministry taking more responsibility for the energy demand side from other ministries. Not only the energy intensity should be controlled but also the total energy consumption. And non-fossil fuels should have priority in the supply chain, reducing the current heavy dependency on coal and oil. Taxes and other financial policies should be the main driver for the future deployment of non-fossil fuels – basically renewables and nuclear power.

Stop expansion of long-distance transport of energy

Another interesting recommendation is to let import substitute long distance transport of coal and electricity from the North West China to the large energy consumers in the South East China. The idea that China should strive for coal self-sufficiency should be abandoned. Instead ERI suggest that the growth in energy consumption in the South East China should be covered by increased import of coal and LNG. Actually ERI finds that China by increasing the import of LNG could increase it’s pricing power. Last but not least ERI recommends that long-distance transport of electricity using Ultra High Voltage (UHV) transmission lines should be avoided due to the high cost and the increased risk for nation-wide power outages. The power supply of the South East coastal regions should be up to the the region itself. This recommendation is in sharp contrast to the current State Grid strategy where the UHV lines have an important role. Also the ERI recommendation could reduce the possibilities for obtaining a high share of renewables in China’s energy system as the resources of wind power and solar energy are focused in the North and North West of China. But nevertheless an interesting viewpoint worth further analyses in i.e. long term scenario analyses.

National and global conclusions and recommendations

“China Energy Policy” is a comprehensive analysis of the next five years development of the energy system in China, including 12 conclusions and 10 policy recommendations, covering both national  and international topics. Very interesting reading for everyone interested in the Chinese viewpoint on national and global energy policy. The executive summary can be found on this link, and a hardcopy of the whole report can be purchased on the ERI web site.


Reducing Beijings air pollution – steps in the right direction

In the small streets of Beijing is is very common to see bike-trucks loaded with coal briquettes, especially when the heating season starts. These briquettes fits nicely into the small stoves in the hutongs and has been the prime source of energy for heating and cooking for the households in Beijing. But the coal burning is contributing to the heavy air pollution in Beijing and the Beijing government thus wants to reduce the use of the briquettes.

coal briquettes in China

Since 2003 (after a pilot period from 2001) the government has supported a program for installing electricity for heating and cooking in inner Beijing. In 2012 21,000 households will get rid of the coal stove which brings the total number of households switching from coal to electricity to more than 200,000 since the beginning of the program. The households receive a subsidy to the electricity price in the night time in order to make it able to compete with the cheap coal. See the information from NDRC here (in Chinese)

The massive amount of cars in Beijing are often blamed for the air pollution. But actually the coal consumption is a worse polluter. Of course the coal fired coal plants in the Beijing area are big sinners but also these small stoves which leads the pollution directly into the streets and houses are very unhealthy – like the London smog years ago, that mainly was created by small coal stoves. So this program is definitely a step in the right direction for the whitings. In other areas in Beijing district heating is a more sustainable solution. Beijing has Chinas largest district heating company, Beijing District Heating Group which has extensive cooperation with international companies including Danish companies e.g. as part of the energy cooperation between the City of Copenhagen and the City of Beijing. One of the challenging issues regarding district heating is to change the payment from an area-based payment to a payment based on actual consumption. This is needed in the process of enhancing energy efficiency but requires installation of meters and a new set-up of accounting – a long-term process.

Beijing District Heating Group owns some of the power plants in the Beijing area, delivering heat to the district heating system. And the power plants does not only contribute to the local pollution but also to the global CO2 emission. If you want to monitor the emission of CO2 from power plants in Beijing (or other places in the world) have a look at the Carma website. I haven’t checked the accuracy of the Chinese data, but the web site in it self look interesting. As mentioned in an earlier blog, Beijing is about to change the coal fired power plants into natural gas fired plants before 2015, and this should of course be reflected on the web site when the changes happens.

The Beijing air-pollution is still a major problem for people living in the city. But the steps taken are all steps in the right direction – and I would say, the steps are more than needed!


Shale gas in China – upsides and downsides

China wants to step up the utilisation of shale gas. According to an article in China Daily, the National Energy Administration aims for annual shale gas output of 6.5 billion cubic meter by 2015. The administration has said the 12th Five-Year Plan (2011-15) will lay the foundations of large-scale production during the subsequent plan, when it aims for production of 100 billion cubic meter a year.

Ministry of Land and Resources data show that China has shale gas resources of 134 trillion cubic meters, of which 25 trillion cubic meters are recoverable, meaning that the country has surpassed theUnited States as the owner of the world’s biggest reserves of the unconventional gas. A study carried out by the US EIA estimates the technically recoverable shale gas resources even higher, to 1275 trillion cubic feet, equivalent to around 36 trillion cubic meters.

The use of natural gas in China is favorable from several viewpoints. Compared to the use of coal natural gas is cleaner, and both the local and the global environment will benefit from a substitution of coal based power production with a gas based. Exploration of the huge amount of shale gas will also reduce the dependence of imported fossil fuel in China.

But the use of natural gas in shale rock formations also has its flip-side. The gas is tied to the shale rock formations and the exploration requires special techniques. Here is what EIA writes about the exploration of shale gas in the US: “Hydraulic fracturing (commonly called “hydrofracking,” or “fracking,” or “fracing”) of shale rock formations is opening up large reserves of gas that were previously too expensive to develop. Hydrofracking involves pumping liquids under high pressure into a well to fracture the rock and allow gas to escape from tiny pockets in the rock. However, there are some potential environmental concerns that are also associated with the production of shale gas:

  • The fracturing of wells requires large amounts of water. In some areas of the country, significant use of water for shale gas production may affect the availability of water for other uses, and can affect aquatic habitats.
  • If mismanaged, hydraulic fracturing fluid — which may contain potentially hazardous chemicals — can be released by spills, leaks, faulty well construction, or other exposure pathways. Any such releases can contaminate surrounding areas.
  • Hydrofracturing also produces large amounts of wastewater, which may contain dissolved chemicals and other contaminants that require treatment before disposal or reuse. Because of the quantities of water used and the complexities inherent in treating some of the wastewater components, treatment and disposal is an important and challenging issue.
  • According to the United States Geological Survey, hydraulic fracturing “causes small earthquakes, but they are almost always too small to be a safety concern. In addition to natural gas, fracking fluids and formation waters are returned to the surface. These wastewaters are frequently disposed of by injection into deep wells. The injection of wastewater into the subsurface can cause earthquakes that are large enough to be felt and may cause damage.””

Considering the present and future difficulties with sufficient water supply and environmental protection in China it is necessary carefully to consider how the shale gas can be exploited in a sustainable way. Luckily it seams that Ministry of Land and Resources is aware of this. As Mr. Pan Jiping from ministry mentions to China Daily: “Survey and evaluation activity related to China’s shale gas reserves, which is still at the preliminary stage, is a key issue before China goes to commercial production”.
Pan adds that further technological breakthroughs and industry support policies are needed to draw companies into the sector and propel its growth.