Energy TransitionWhere are we heading?

Landsnet Annual Day

14th March 2018

ENERGY TRANSITION WHERE ARE WE HEADING?

LANDSNET A N N UA L DAY

Reykjavík, 14th March 2018

1. Introduction: Iceland today

2. Energy Transition ET : drivers, barriers and facilitating framework

3. Electrification of Transport

4. Tesla: from EVs to batteries

5. DERs, aggregation & flexibility: value to Landsnet

6. Recommendations & Lessons learnt

Agenda

Iceland Today

Energy Trasitition for Transport, 31st May 2017: action plan to increase the share of domesticrenewable energy (40% by 2030)

Iceland is 99,99% transport fuel dependent.About 85 % of energy supply is domestically produced & renewable EV-IncentivesCity employees who come to work at least 3 times a week by means other than a diesel car will get a 72,000 ISK annual stipendGoal of 30,000 electric cars by 2026The limit of the carrying capacity of the grid has been reached. Iceland’s electricity production is primarily based on sustainable energy. This is why it makes perfect sense for the transport sector to be a part of the electrification process.

Energy Transition : Targets & Enablers?

The new realities

Source: https://ec.europa.eu/energy/en/topics/energy-strategy/2020-energy-strategy

2.ENERGY TRANSITION: Main Drivers

TARGETS NEW ENERGY SYSTEM

“Clean, safe, secure and affordable energy is one of the greatest challenges facing Europe today”Fuente: Dominique Ristori. Prologo European commision ´s in house science service (JRC). 2013https://ec.europa.eu/jrc/sites/default/files/jrc_science_for_energy_report_1.pdf

Huge penetration of renewable to fulfill the energy objectives

Fuente: informe The first decade:2004-2014.2014 Renewable Energy policy network for the 21st centuryhttp://www.ren21.net/Portals/0/documents/activities/Topical%20Reports/REN21_10yr.pdf

Arias Cañete: “Twenty years ago, renewables were still seen by many as an expensive gamble. Twenty years later, I am speaking to you in a building with solar panels on the roof providing us with clean electricity”Speech Arias cañete European commission. Brussels, 17 March 2015http://europa.eu/rapid/press-release_SPEECH-15-4615_en.htm?locale=FR

HOW TO ACHIEVE THOSE OBJECTIVES?

Emergency and Restoration

System integration through Network Codes and CEP

3. Electrification of Transport

Iceland’s electricity production is primarily based on sustainable energy. This is why it makes perfect sensefor the transport sector to be a part of the electrification process.

Opportunity:

• Vehicle to grid services

Challenge:

• Impact on the load curve

EV will be part of the new picture

ELECTRIC VEHICLE: OPPORTUNITY, CHALLENGES AND IMPACT ON ENERGY TRANISITION

DRIVERS TO PROMOTE EV DEPLOYMENT

“City employees who come to work at least three times a week by means other than a diesel car will get a 72,000 ISK annual stipend” https://grapevine.is/mag/articles/2017/05/18/the-future-is-coming

Economic incentives:

4. Tesla: from EVs to batteries to Flexiblity EV are only as clean as the grids that charges them.

Using the same Battery technology, Tesla’s Energy Products address the increasingneed form Flexiblity of the electricity system, with inteligente stationary batterystorage systems and renewable generation.

The suite of battery systems developed by Tesla can perform a variety of

funciones for Utilities, businesses, and residential customer.

Flexibility: Customer empowerment

“Customers will progressively move to the centre of the electricity system. A new service model is emerging, based around energy efficiency offerings, smart grids, decentralisedgeneration and, most importantly, new types of customers: more aware and demanding, more active and engaged”.

“What is flexibility at household level?Flexibility at household level is the ability of an appliance connected to the power system to change its consumption profile (time or level of consumption) through automation or direct action by the customer.”

“Action is taken to evolve towards an electricity market where prosumers have the possibility to provide flexibility and ancillary services”

Source: Eurelectric. retail revolution-powe to the customer. Dec-2013http://www.eurelectric.org/media/115446/broch_smart_energy_system_131126_lr-2013-2500-0002-01-e.pdf

Eurelectric.Prosumers- an integral part of the power system and the market-Junio 2015http://www.eurelectric.org/media/178736/prosumers_an_integral_part_of_the_power_system_and_market_june_2015-2015-2110-0004-01-e.pdf

V2g versus smart charging

5. Recommendations/Lesson Learnt

• A lot it is going on- We need to stay alter in Iceland and we shouldn’t lag behind, positioning as a front runner of Energy Transition. We already are the front runners in Renewable Energy

Flexibility: Customer empowerment (new services for customers)

Fuente: CNMC https://facturaluz2.cnmc.es/

“Energy storage can supply more flexibility and balancing to the grid, providing a back-up to intermittent renewable energy”

Flexibility: Storage

Source: European commission. Working paper “the future roles and challenges of Energy Storage”https://ec.europa.eu/energy/sites/ener/files/energy_storage.pdf

Source: CEDEC Storage as a tool for smart distribution. Enero 2016http://www.cedec.com/files/default/cedec-report-energy-storage.pdf

Flexibility: Storage

“The electricity system will require more flexibility if higher shares of renewable energy are integrated. Energy storage is one of the available flexibility options”

“It also assists the transition towards an energy system whereend-users can provide flexibility to the system, either with stationary batteries coupled with their own self-production generation units, or using vehicle-to-grid as a second application of their vehicle batteries”

“A number of technologies can provide flexibility, including centralised or de-centralised generation, demand side participation and energy storage”

In the future, DSOs could additionally procure ancillary services from distributed generation andother distributed energy resources (including demand response and decentralized storage)

Source: European Commission. Oct 2015 Energy storage which market designs and regulatory incentives are needed?http://www.europarl.europa.eu/RegData/etudes/STUD/2015/563469/IPOL_STU%282015%29563469_EN.pdf

Source: Eurelectric Enero 2014 Flexibility and aggregation: requirement for their interaction in the markethttp://www.eurelectric.org/media/115877/tf_bal-agr_report_final_je_as-2014-030-0026-01-e.pdf

Demand Response Aggregation

Demand Response is provided by electricity consumers which accept to adapt their electricity consumption when needed, to secure electricity grid security and balancing in a cost-effective way

Talk ab the benefit

4. International Experiences

• Reforming Energy Vision-NY DSO: framework

• Sonnen IBM Blockchain Germany

• Eneco, Tennet Batteries and smart charging

• Denmark, Nissan V2G, Enel…(1000 euros per year)

• Clean Energy Package

Electro mobility platform

SOLUTIONS: Spanish TSOMonitor and control in real time the charging of electric vehicles: Centro de control de vehículos eléctricos (CECOVEL)

6. Recommendations• EV could be the biggest provider of flexibility in particular through

Smart charging• Establish vehicle/battery standards, V2G communication protocol,

TOU charging Price• A better design of power Market is the fundamental driver• Customers need to be incentivised to benefit from reduced energy

prices• Demand response will become key in the energy transition• TSO-DSO cooperation is needed to increase the security of supply

TSO-DSO cooperation

“In order to keep the lights on, system operators will need to cooperate more in the future and explore areas where cooperation would increase security of supply”Source: (CEER) annual conference 2015 (Brussels) https://ec.europa.eu/energy/en/news/eu-energy-markets-must-become-more-flexible-arias-ca%C3%B1ete

Source: http://www.acer.europa.eu/official_documents/acts_of_the_agency/sd052005/supporting%20document%20to%20acer%20recommendation%2005-2014%20-%20%20energy%20regulation%20a%20bridge%20to%202025%20conclusions%20paper.pdf

Information Exchange Areas of common interestOperational cooperation

“the upcoming opportunities for the TSO and DSO cooperation can be grouped into three categories”: (1) coordinated access to resources(2) regulatory stability (3) grid visibility and grid data

WHAT AREAS REQUIRE ENHANCED COOPERATION?

•Roles and responsibilities•Flexibility in the market•Technical requirements

Source: DSO associations y ENTSO-E 2015. General guidelines for reinforcing the cooperation between TSOs and DSOshttp://www.cedec.com/files/default/entsoe-pp-tso-dso-web.pdf