ENERGY TRANSITION IN KAZAKHSTAN TOWARDS 100% …

ENERGY TRANSITION IN KAZAKHSTAN

TOWARDS 100% RENEWABLE ELECTRICITY

Dmitrii Bogdanov, Alla Toktarova, Christian Breyer Lappeenranta University of Technology, Finland8th Researchers’ Seminar Lappeenranta, August 24, 2017

Energy Transition in Kazakhstan towards 100% Renewable ElectricityDmitrii Bogdanov [email protected]

Agenda

MotivationMethodology and Data Results Summary

3 Energy Transition in Kazakhstan towards 100% Renewable ElectricityDmitrii Bogdanov [email protected]

Motivation• Economy is locked into reliance on fossil fuel energy

sourcesTop 20 global producers of primary energy resources Coal remains the dominant fuel source of electricity production accounting for 75% of electricity production

• Kazakhstan is one of the top 10 fastest growing economies in the world

One of highest energy use per unit of GDP across EurasiaElectricity consumption grew more than 50% from 1999-2015 Energy consumption of the industrial sector, by the end of 2014, made up 47% of the total final energy consumption

• Kazakhstan is the 14th-largest emitter of greenhouse gases.Energy sector, in particular power and heat generation, accounts for 80% of the country’s CO2 emissionsCO2 emissions per capita was 1.3 times higher than OECD countries average

Source : J. Farfan and Ch. Breyer, Structural changes of global power generation capacity towards sustainability and the risk of stranded investments supported by a sustainability indicator, J of cleaner production, 141, 370–384, 2017

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10

20

30

40

50

60

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2008 2009 2010 2011 2012 2013 2014

Elec

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ity c

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TW

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Electricity consumptionAgricultury

Transport

Commercial

Residential

Industry

Source : IEA

13.4 GW Coal 65 %

1.69 GWHydro/Run-of-River 8 %

784 MW Hydro/Reservoir 4 %

0.36 MWBiogas 0 %

2 MWWind 0 %

25 GWSolar PV 0 %

4.35 MWGas 21 %

386 MWOil 2 %

Total capacity by the end of 2014


Motivation

• Kazakhstan has been the first country in CentralAsia, where feed-in tariffs for renewable energyfacilities have been adopted.

Source : Ministry of Energy of the Republic of Kazakhstan

Wind 98,2

PV 57,3

Small Hydro 139,9

Biomass0,4

Renewable installed capacity (2016 MW)

• Kazakhstan adopted the “National Concept forTransition to a Green Economy up to 2050”

Guidelines for building sustainable economic modelbased on the country’s transition to a greendevelopment pathObjective is to bring the share of new renewableenergy in electricity generation to 3% by 2020,rising to 30% by 2030 and 50% by 2050

• Considerable potential for renewable energysources

Kazakhstan has 2200 - 3000 h of sunlight per year.The annual global horizontal irradiance ranges from1150 - 1750 kWh/m2

The total potential for wind power is estimated ataround 929 TWh per annum

Source : Solargis.com

Source: UNDP and GEF, Lessons learnt from the UNDP-GEF project “Kazakhstan – Wind Power Market Development Initiative”, 2011, Astana


Agenda



MethodologyKey Objectives

Definition 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,• 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 • enables energy transition modeling• overnight scenarios• energy transition scenarios in 5-year steps

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


MethodologyOverview• Energy transition pathway from 2015 fossil-based system to a 100% RE based power system by

2050Transition in 5-year time stepsNo new nuclear or fossil-based thermal power plants installed after 2015; An exception for gas-fired plantssince they can be shifted to renewable-based fuelsLeast cost RE power plant mix replaces phased out fossil power plantsEnergy system modelled to meet increasing electricity demand for each time step

• Research Objective: To find a least cost energy transition pathway for Kazakhstan and the demandfor storage technologies for this transition

Total Electricity Consumption(TWh)

2015 75.32020 80.12025 85.42030 91.22035 97.52040 104.42045 111.92050 119.9

Aggregated load profile for Kazakhstan for 2050 Estimated electricity consumption of Kazakhstan from 2015 to 2050


MethodologyFull system

Renewable energy sources• PV rooftop• PV ground-mounted• PV single-axis tracking • Wind onshore• Hydro run-of-river• Hydro dam• Geothermal energy• CSP• Waste-to-energy• Biogas• Biomass

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

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

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

Energy Demand• Electricity• Non-energetic industrial gas• Water desalination


Scenarios assumptions• Key data

22.4 million population in 20502.7 million km2

~120 TWh electricity demand (2050)~196 b m3/a water desalination demand (2050)~3.6 TWh non-energetic industrial gas demand (2050)

• Scenarios

Power sectorIntegrated: power sector plus water desalination and non-energetic industrial gas


Scenarios assumptionsFull load hours

PV fixed-tilted FLH

PV single-axisFLH

CSP FLH

Wind FLH

1427 1815 1726 3021

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

FLH computed on the basis of the 0.45 × 0.45spatially resolved data:

0%-10% best areas – 0.310%-20% best areas – 0.320%-30% best areas – 0.230%-40% best areas – 0.140%-50% best areas – 0.1


Scenarios assumptionsGeneration profile

Wind generation profile Aggregated feed-in profile computed using earlier presented weighed average rule.

PV generation profileAggregated feed-in profile computed using earlier presented weighed average rule.

Key insights• Solar resource predominance across entire country in all but winter months• Wind energy complements solar in period of low solar radiation


DataPower Plant Capacities – Technical and Financial Assumptions

Capex variation based on learning curves Least cost power plant capacities based on

CostEfficiency of generation and storagePower to energy ratio of storage Available resource

WACC is set to 7% for all years Fuel costs

47.3 €/MWhth for oil (~100 USD/bbl in 2020 and ~+2.1%/a)22.2 €/MWhth for gas (in 2020 and ~+3.0%/a)

Variation in capex from 2015 – 2050 for all power plant components utilised by model.


Agenda



Results Levelised cost of electricity – Power scenario

Key insights• LCOE decreases from 63.5 €/MWh to 50.9 €/MWh by 2050. The 2050 cost is comprised of mainly

primary generation and storage • The 2025 cost spike is due to balancing very old power plants by short-term gas-based generation• After 2025, share of renewables increases in the system and reduces the fuel and CO2 emission cost• In 2050, wind onshore and solar PV contribute mainly to LCOE


Results Levelised cost of electricity – Integrated scenario

Key insights• Fuel and CO2 cost fizzle out of the system after 2040• LCOE primary and LCOS dominate the system from 2030 till 2050 in both scenarios • In integrated scenario wind onshore, batteries and solar PV contribute mainly to LCOE in 2050


Results Power Scenario

Key insights• Solar PV and wind turbines contribute 85% to the generated electricity in 2050• After 2025 electricity generation from renewables increases to overcome the deficit created by sharply dropping

electricity generation from old coal power plants• Electricity generation from wind remains almost the same after 2025• After 2025 as influence of solar PV increases on the system, batteries are required• Gas storage is the cost effective storage option till 2020 and increasingly needed for seasonal balance for 2050

Electricity generation Storage output


Results Integrated Scenario

Electricity generation Storage output

Key insights• Water supply is a very challenging task and the business-as-usual approach needs to be overcome• Solar PV and wind turbines contribute 99% to the generated electricity in 2050• Solar PV provide 1314 TWh of electricity and batteries provide 488 TWh of output in 2050• Hybrid PV-battery provides least cost combination for transition


Results CAPEX required for 5-year intervals

Power scenario Integrated scenario

Key insights• Strong investment requirement in 2025 and 2030 due to decommissioning of old coal plants• High CAPEX in integrated scenario is due to additional installed capacities of renewables and storage

technologies. This is due to additional desalination and non-energetic industrial gas demand sectors.• The business-as-usual approach for the water supply needs to be overcome


Results Storage – 2050

Key insights• Increase in gas storage capacities in the integrated scenario mainly due to desalination integration• Batteries are used on daily basis and gas provides seasonal storage requirements.

Storage capacities Throughput of storage Full cycles per year

ScenarioGas Battery TES PHS A-

CAES Gas Battery TES PHS A-CAES Gas Battery TES PHS A-

CAES

[TWhth] [GWhel] [GWhel] [GWhel] [GWhel] [TWhth] [TWhel] [TWhth] [TWhel] [TWhel] [-] [-] [-] [-] [-]

Power 7.5 48.5 9.6 0.0 12.1 9.0 14.5 1.1 0.0 0.26 1.2 299.0 119.9 0.0 21.6

Integrated 205.8 1935.0 124.2 0.0 1566.6 243.3 488.2 7.4 0.0 25.2 1.2 252.3 60.3 0.0 16.1


Results Storage – State of Charge

Key insights• Charging of the batteries on daily basis and discharging in the late evening and night time• Gas storage in seasonal operation mode


Hourly Results Hourly generation (power scenario) – winter week

Electricity generation profile for a representative week in the beginning of the year 2050


Hourly Results Hourly generation (power scenario) – summer week

Electricity generation profile for a representative week in the middle of the year 2050


Agenda

MotivationMethodology and DataResults Summary


Summary

• The LCOE obtained for a fully sustainable energy system in the year 2050 is 50.9 €/MWh and 52.8 €/MWh for the power and integrated scenario, respectively.

• After 2025, the optimal mix for Kazakhstan will be lead by solar PV and wind turbines, balanced with battery storage

• Switch from old and unsustainable coal to new renewables may be challenging due to the required fast phase in and phase out of capacity

• In a fully RE system, more than 20% of the electricity demand is supplied by storage mainly batteries, 58% and 64% in the power scenario and integrated scenario, respectively, by the 2050 in terms of throughput of storage

• Fossil gas consumption is completely phased out after 2045

• PtG technology provides flexibility and storage on a seasonal level

• Kazakhstan has the resources to achieve 100% RE by 2050, exceeding the country’s «green concept» goal of 50% RE in the same time period.

Thank you for your attention …… and to the team!

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

all publications at: www.researchgate.net/profile/Christian_Breyernew publications also announced via Twitter: @ChristianOnRE


DataLower and Upper Capacity Limits

Lower and Upper Capacity Limits - Renewables

PV optimally tilted

PV single-axis tracking Wind onshore Wind

offshore Hydro Run-of-River Hydro Dam CSP

GW GW GW GW GW GW GW

0-12149 0-12149 0-907 0-NL* 0.8-1.7 1.7-2.5 0-24297

Lower and Upper Capacity Limits – Non-renewablesCoal Oil Natural gas Nuclear

GW GW GW GW

13.4-NL 0-NL 0-NL 0-NL

NL – No upper limit specified*Not utilized for Kazakhstan


ResultsPower scenario

LCOE total[€/MWh]

LCOE primary[€/MWh]

LCOC[€/MWh]

LCOS[€/MWh]

LCOT[€/MWh]

Total annualized

cost[b€]

Total capex[b€]

Capex needed in 5-years period

[b€]

2015 63.5 60.2 3.3 0.0 0.0 4.8 25.1 -2020 57.7 55.8 0.3 1.6 0.0 4.6 18.8 2.22025 70.1 66.7 0.3 3.1 0.0 6.0 28.5 14.72030 54.9 48.4 2.2 4.3 0.0 5.0 38.9 16.32035 53.7 43.0 3.5 7.2 0.0 5.3 44.1 6.32040 53.2 41.1 4.0 8.2 0.0 5.6 47.1 4.32045 52.8 39.4 3.9 9.6 0.0 5.9 50.2 3.42050 50.9 32.3 2.6 15.9 0.0 6.1 54.6 5.6


ResultsIntegrated scenario

LCOE total[€/MWh]

LCOE primary[€/MWh]

LCOC[€/MWh]

LCOS[€/MWh]

LCOT[€/MWh]

Total annualized

cost[b€]

Total capex[b€]

Capex needed in 5-years periods

[b€]

2015 63.5 60.2 3.3 0.0 0.0 4.8 25.1 -2020 57.8 57.1 0.3 0.4 0.0 5.0 20.3 2.62025 68.5 68.0 0.4 0.2 0.0 32.6 223.9 134.42030 57.8 52.7 4.7 0.5 0.0 54.1 503.1 205.12035 53.5 39.2 4.9 9.4 0.0 100.2 1078.6 413.52040 53.7 36.5 3.3 13.9 0.0 104.6 1162.3 61.12045 52.6 32.6 1.9 18.1 0.0 117.2 1333.9 126.72050 52.8 28.3 0.7 23.8 0.0 121.4 1466.8 105.5


ResultsInstalled capacities

Key insight:• Coal dominates the total power plant capacity until 2015• After 2020, solar PV and wind turbines dominate the installed capacities• Additional demand driven by seawater desalination and non-energetic industrial gas is

satisfied by installation of additional PV and wind plants



ResultsRatio of storage output to electricity demand

Key insight:• Till 2020, gas storage provides the most cost effective storage solution• Batteries are required after 2025• Gas storage is increasingly needed for seasonal balance for very high RE shares 2050



ResultsFixed operational costs

Power scenario Integrated Scenario

Key insights:• Increasing opex, mainly for wind plants and solar PV


ResultsVariable operational costs


Key insights:• Decreasing opex due to phasing out of fossil fuels in particular coal for power scenario• In integrated scenario opex increase due to penetration CCGT and OCGT


ResultsDesalination

Key insights:• Installed desalination capacity based on reverse osmosis covers the water demand • All other technologies for seawater desalination are more expensive and hence not used


ResultsDesalination – Capex and Opex

Key insights:• Capex and opex are for reverse osmosis desalination and water transportation


ResultsInput of gas by source for electricity production

Key insights:• Dominance of fossil gas in the period between years 2025 and 2035. • Beginning from 2035 gradually increasing synthetic natural gas for electricity production• Power-to-gas technology is used for production of synthetic natural gas• In 2050, all the gas for electricity production is synthetic natural gas


ResultsState of Charge for gas storage in 2050

Key insights:• Gas storage at maximum filling level in the autumn months • Strong seasonal operation of the gas storage


ResultsMethanation operation mode in 2050

Key insights:• Methanation plants run all months, except winter months, to produce synthetic natural gas• Methanation plants run in hours of very strong wind and excellent sunshine

ENERGY TRANSITION IN KAZAKHSTAN TOWARDS 100% …

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