Tag Archives: RE Policy

The dispatch centre at Energinet.dk

Lessons learnt from the European power system transformation

LinkedInSina WeiboGoogle+TwitterRedditShare

Europe is these years’ test laboratory for the future power system, and Europe’s “new normal” will also become the Chinese power sector’s “new normal” in the future. Here are some early take-aways from the European energy transformation.

In the beginning of July the Danish wind power plants produced a record high 140% of the electricity consumption in Denmark two nights in a row and then dropped to almost zero within a half day without any disturbance in the power system. Similarily, on the morning of March 20th, the German grid operators managed to deal with the rapid fluctuations of 39,000 MW of solar PV during the solar eclipse.


These two examples illustrate that the future European electricity system will be completely different from the electricity system during the last century, which was mainly based on fossil fueled and nuclear power plants. The future, European energy system will have variable energy production from wind and solar as the backbone and the remaining thermal power plants (fossil or nuclear fueled) will adapt to the variation in the load as well as the variation in the production from solar and wind. According to a recent, European study from Agora Energiewende, it is claimed that in 2040 there will be no base-load power unit left in Europe (base-load units produce with full capacity day and night for a longer period, typically with around 6000 or more hours with full-load during a year’s 8760 hours).

How will this be possible without jeopardizing the security of supply? The keyword here is “flexibility”. Flexible power plants, flexible dispatch of transmission lines and flexibility in the demand will do the trick, which has already been demonstrated by the European experiences. Maybe in the future electricity storage would be an additional tool in the flexibility toolbox, but the European experiences indicate that it is possible to cope with large amount of variable power without expensive storage.

China also wants a deep transformation of the energy system – a Chinese “energy revolution” – with a higher percentage of renewable energy. So what could China learn from the European experiences?

In my opinion there are four main lessons from the energy transition in Europe:

1. Fossil fueled power plant can be very flexible.
In Denmark coal-fired power can operate down to 10% of installed capacity, they can change their production up and down very quickly and they can start up fast. The power plants were not as such born with good characteristics regarding flexibility; they have been developed by a thorough trial-and-improve process. The main achievements have been reached by training and changed in the control centre of the power plant – not by massive new investments.

The Chinese coal fired power plant are very similar to the Danish power plants, most of them are even newer, therefore technical problems in creating the same flexibility for the Chinese power plants will not be likely.

2. An efficient power market with hourly prices is necessary to create flexibility in the power system.
The owner of a power plant would only consider flexible operation if it is beneficial for him/her, either by recieving a reward for flexibility or being punished for inflexible operation. The European market system with hourly prices, depending on the supply and the demand, clearly gives incentives for producing when the price is high (lower production and/or high demand) and to stop producing when the price is low (increased production and/or low demand). If your power plant is inflexible you will soon start loosing money because your costs often will be higher than the price that you recieve for the electricity produced. Some European power markets even require you to pay to get rid of your production, if the supply is higher than the demand.

In China the power producers have no incentives for being flexible. On the contrary they will loose money and market shares if they try to run the power plants by flexible standards. This is one of the most significant obstacles for integration of wind and solar, and it explains to a large extent why China is in the habit of curtailing wind power production, while this is very rare in Europe. Luckily, the Chinese government is pushing for a revival of the power market reform, which hopefully will create the necessary incentives for flexibility.

3. The transmission system must be large and flexible.
The European experiences clearly shows that the large transmission systems are very efficient in integrating variable energy. Transmission systems allow for reducing the variability of wind and solar by integrating larger areas – this is often called the “smoothening effect”, because the wind speed and the solar radiation is not often the same all over Europe. But it requires that the transmission system is operated in a flexible way. If the dispatch of a transmission line is fixed, e.g. on a monthly basis, it is of no use in the wind and solar power production, which is typically predictable from day to day and often will deviate from the forecast within the day of operation.

In China the transmission system has been developed rapidly during the last ten years, and a large number of long-distance, high-voltage transmission lines are being build or are in the planning stage. However, the transmission lines are not being dispatched in a flexible manner and the long-distance lines are typically planed to be base-load supply to the load centres. This is a huge obstacle for harvesting the benefits from renewable energy by efficient integration of the variable production. Also the Chinese transmission lines should be part of the future Chinese power market and operated according to the price signals from the market.

4. The changing mindset in the power sector.
The last two decades have not been easy for the typical old-school power sector CEO. He was used to lead a large monopoly company, which basically could decide on its own how and when to establish new power generation; it’s customers could not change to another company, and no competitors were allowed to have access to the grid. Today it is totally different. The coal fired power plants are threatened by renewable energy, the customers can choose other suppliers or even choose to produce by themselves with distributed generation and the transmission grid are owned and operated by independent system operators looking at the society as a whole and not only on the profit of the generators. The best of the old power producers have adapted to the new situation – maybe slowly, but nevertheless, they are now ready to be a part of the future power sector. Others are still stuck in the old-school thinking and they will experience even harder times in the future and have a difficulty surviving in the not-so-long run.

The Chinese, energy transformation has only recently begun and most of the power sector’s mindset is still turned on to the existing “normal” with coal power as the backbone of the power system. But also in China the “new normal” will be a much more flexible power system with renewable energy in a dominant role. The lessons from Europe are that the most agile companies are the survivors, because they are able to foresee and adapt to the future framework conditions and will not risk being stuck in the old-school “normal”.

This blog was first published at boostre.cnrec.org.cn.


Easy access to info on RE Policy

It can be hard to find relevant and updated information about renewable energy policy and  policy measures. But luckily the International Energy Agency IEA has teamed up with IRENA (the International Renewable Energy Agency) to prepare and maintain a global database on this issues. The information regarding China has recently been updated, and the China National Renewable Energy Centre will do an effort to keep the information as topical as possible.

Find the database here or go to my link page.