Thứ Hai, tháng 2 04, 2013

Hydro and Wind: Friends or Foes?

By: 
ENERDATA
With a 75% share, hydroelectricity is by far the main contributor to electricity generation from renewables in Europe[1]. In 2011, it accounted for 16% of total electricity production and more than 20% of the total installed generation capacity. With 220 GW of installed capacity[2], hydroelectricity still dwarves wind power that stands at 96 GW.
Despite its dominance, hydroelectricity is seldom discussed as a renewable energy resource of significance or importance.  Policy makers and the media tend to focus their attention on wind and solar probably because the latter are fast growing markets with promises of new jobs and export markets despite serious setbacks in the last few years. Hydro is also overlooked because it is seen as a mature technology which potential has been largely exploited.
A geographical mismatch between hydro and wind resources
Technically speaking, hydroelectricity and wind complement each other well. Hydroelectric plants are highly flexible and can be ramped-up or ramped-down at very short notice (seconds) without the efficiency losses of thermal plants. Hydroelectricity can therefore mitigate wind variability in a very efficient way. The seasonal match is equally fairly good. Winds are generally stronger and more regular in the winter, at least in Northern Europe. The contrary is true for hydro, which reaches its maximum potential capacity in late spring or early summer, after snow has melted and filled the reservoirs. 
Share of hydro and wind in total electricity generation (in %)


Source: Enerdata - Global Energy & CO2 Data

Despite the good technical match between hydro and wind, the correlation between installed capacities in both technologies at country level is low or rather, unidirectional. On the one hand, countries with a very high share of hydro (i.e. above 30%) tend to have little or no installed wind capacity. On the other hand, countries with a very high share of wind have either a sizeable domestic hydro industry (Portugal, Spain and to a lesser extent, Ireland) or access to their neighbour’s hydro (Denmark).
The absence of a strong link between hydro and wind can be explained to a large extent by the fact that the geographies of hydro and wind do not match well as shown in the map below. Rather than the raw wind energy potential, this map published by the EEA in 2008 gives an indication on the full cost of wind electricity across regions. It is a good techno-economic indicator of the future location of new wind power developments.

Generation costs for wind energy in Europe, 2005
Source: EEA, “Europe's onshore and offshore wind energy potential”, 2008

Countries with a good economic wind potential − such as the British Isles, Northern European countries with a coastline on the Channel, the North Sea or the Baltic Sea − do not necessarily have a good or direct access to a significant hydro resource. The best hydro resource is generally found in mountainous or hilly regions (the Alps, the Iberian Peninsula, Norway, the Balkans, etc.) and is often poorly connected with windy regions.
Scandinavia is an exception as its vast hydroelectric capacities contribute significantly to the balancing of the Nordic synchronous electricity area. This has made high wind penetration in the Danish electricity system possible.

In Europe, hydroelectricity is currently a low growth market
Hydro is hardly growing anymore. In the EU, less than 10 GW of hydro have been added between 2000 and 2011 compared with 82 GW of wind and 52 GW of solar. With approximately 10 GW of new capacity added every year, wind is catching up fast and could overtake hydro by the mid-2020’s.
EU net electricity capacity additions between 2000 and 2011 (in GW)
Source: Enerdata - Global Energy & CO2 Data

The potential for new hydroelectric capacity in Europe is often said to be limited. However, some estimates put the untapped potential of economically feasible yet-to-develop capacities at 165 TWh/year in Western Europe[3]i.e. a third of the current production level. The residual potential in Southern Europe and Central Eastern Europe is estimated at respectively 145 and 6 TWh/year.
These estimates include new developments, upgrades and the rehabilitation of older facilities. The median age of hydroelectric capacities in Europe is 41 years. This and barriers to new builds explain why electric utilities in Western Europe tend to focus on the repowering of existing plants with modern turbines and equipment rather than greenfield projects.

New hydroelectric potential in the three main European regions (in TWh/year)
     
Source: WEC; EUROSTAT; UCTE; CESR; Hydropower & Dams World Atlas 2007

With approximately 13 GW, small hydro[4] is also a significant renewable energy resource. Its potential has been largely developed in Western Europe, more than 80% in the EU-15 according to the ESHA[5. The remaining small hydro potential is found primarily in Eastern and Southern Europe.

Hydroelectricity remains attractive but faces many barriers
Hydroelectricity is hampered by a number of hurdles, with opposition from local inhabitants and environmentalists probably the most difficult to overcome. Large hydro has a significant impact on the environment as it literally transforms landscapes and disrupts local ecological systems.
Gone are the days when the State could impose the construction of large hydro infrastructures to local communities. Developers now have to contend with lengthy planning and permitting procedures as well as more stringent environmental or water rights constraints. These barriers can increase up-front capital costs but also reduce the technical flexibility of hydro plants.
In this context, rehabilitation looks attractive. It is a good opportunity to increase the performance and revenues of a hydro plant while increasing its availability and safety levels. This can be done at a fraction of new build costs, shorter lead times and lighter environmental procedures.

SWOT analysis of hydroelectricity
Strengths
Weaknesses
  • Low carbon footprint and CO2-free electricity generation
  • Large hydro plants economically viable without support
  • Very high and “constant” efficiency rate (up to 85%)
  • Very long economic lifetime (> 80 years)
  • Low O&M costs
  • Short term capacity contribution
  • Ideal source of flexibility thanks to fastest ramp up/ramp down response time among generation technologies
  • Hydro plants with reservoir only large scale electricity storage technology  
  • Domestic/European resource
  • Water management (flood control) and recreational synergies
  • High capital cost
  • Plant economics are location specific
  • Seasonal variability (some dry years)
  • Lengthy planning and permitting procedures
  • Small hydro and low-head plants requires some form of support

Opportunities
Threats
  • 20 x 20 x 20 targets: European energy policy supportive
  • Significant upgrade/repowering potential in Western Europe
  • Significant new build potential in Southeast Europe (Balkans), Turkey and other selected geographies
  • Conversion potential of existing dams into pumped storage facilities
  • Small hydro potential underdeveloped

  • Local opposition to environmental impact and displacement of people
  • Long term impact of climate change on hydro potential in southern Europe
  • Lack of transmission lines limit optimal use of hydro resources on pan-European scale
 
  Source: Enerdata

Despite these barriers, Austria, Switzerland, Germany, Norway, Spain, Portugal, have all completed or started developing at least 1 GW of new hydroelectric capacity over the last decade, as show in the chart below. A significant share of new builds is made of pumped storage facilities, a consequence of the search for new sources of flexibility in electricity markets.

New build and under construction hydroelectric plants in a selection of European countries

Hydro is the ideal back-up technology for wind
Future European electricity systems will undoubtedly be characterised by a higher level of variable energy generation. Wind generation is characterised by ample stochastic fluctuations and it is not dispatchable. Its average load factor is fairly low and production can sometimes drop to zero when it is most needed. Its capacity contribution to the system is therefore not guaranteed. As a consequence, the higher the share of wind in a system, the higher the reserve of flexibility needed by Transmission System Operators (TSOs) to maintain in order to be able to cope with unexpected frequency events.
Thanks to their rapid ramp-up and ramp-down properties, hydroelectric dams and pumped storage facilities can be considered as an indirect way of storing electricity. These properties make hydro the ideal back-up technology for wind[6].
Of course, hydro is only one solution among many to provide the systemic flexibility required when the share of wind or PV increases. Other technologies such as CCGTs, gas peakers, smarts grids and other storage technologies (CAES[7], batteries) have the potential to deliver part of the required flexibility. Interruptibility, demand response and market coupling are market arrangements that can also introduce additional flexibility.
Europe could facilitate the integration of wind through better use and sharing of its hydro resource
So far TSOs in countries with a lot of wind power capacity such as Denmark, Spain or Portugal have been able to manage the situation pretty well. A key concern is the ability of continental synchronous area countries to replicate the Scandinavian experience and collectively leverage their hydro base to introduce much more wind into the European generation mix.
A further concern is that hydro is still largely used in a national context to balance national electricity systems. Lack of market integration and congestion issues limit a pan-European utilisation of hydro as a source of flexibility. In theory, hydro-rich countries or utilities should benefit from better market integration by having access to a larger and deeper market and the new revenue maximisation opportunities this offers. From their part, wind-rich countries would benefit by accessing flexibility at the best possible price. They could also see an advantage by limiting the recourse to high CO2 emitters such as conventional peakers.
Since the building of new interconnectors remains very challenging and lengthy, priority should be given to encouraging further coupling of European electricity markets. By authorising an implicit auction of interconnection capacity, market coupling is a low cost solution to optimise rapidly electricity exchanges between countries and ensure price convergence.
The ability of a pan-European “supergrid” to smoother the variability of wind production by linking distant wind farms has seemingly been overstated. The benefits of the geographical spread of wind farms across Europe to smoother fluctuations through aggregation exist but are most probably too low to justify the construction of a supergrid.
Nevertheless, if you also add the benefits given by an integrated use of all European hydro resources and the advantages of a deeper electricity market, then the rationale to invest in new or reinforced interconnections is undeniable. This will in turn make hydropower even more valuable and may very well revive the interest as a main source of renewable electricity.


[1] EU countries plus Albania, Bosnia-Herzegovina, Croatia, Iceland, Macedonia, Norway, Serbia, Switzerland, Turkey
[2]  20% of which is run-of-river
[3] Including Norway and Switzerland
[4] Plants of less than 10 MW
[5] European Small Hydropower Association
[6] Small hydro is less attractive than large hydro when it comes to providing back-up for wind power. Small and low head hydro plants not only lack the storage capacity of large dam and pumped storage reservoirs, they also need some form of support (e.g. subsidies or a feed-in tariff) to be financially attractive.
[7] Compressed air energy storageHydro and Wind: Freiend

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