Regional Workshop

Athens 9/2/2016

Regulatory framework for energy storage

in the non-interconnected Greek islands
Hybrid Stations
Stavros Papathanassiou
Assoc. Prof. NTUA

Regional Workshop
Athens 9/2/2016

Hybrid Stations in Island Systems

Dr. Stavros Papathanassiou, NTUA

Storage in power systems:

Desirable, yes. Feasible?
Storage considered a necessary flexibility tool and the enabling factor to achieve
high RES penetrations.
However, feasibility of storage projects currently afflicted by lack of sufficient
market support mechanisms and uncertainties (volatility in prices, effect of high RES
penetration, insufficient ancillary service markets, lack of capacity mechanisms etc.)
Correlation with future RES generation development, which may aggravate
congestion and increase curtailments, constitutes another uncertainty factor
Feasibility of new large-scale storage projects is questioned
Necessary conditions for the development of new storage plants are considered to
be:

o The reform of ancillary services and balancing markets, to better value the
flexibility offered by storage
o The introduction of capacity mechanisms, to effectively subsidize part of the
investment, as in the case with other low utilization generation assets
Regional Workshop
Athens 9/2/2016

Hybrid Stations in Island Systems

Dr. Stavros Papathanassiou, NTUA

Isolated island systems:

A particularly favorable case
32 island systems, isolated from the
mainland network (single islands or
groups of islands interconnected to
each other)
Maximum annual demand ranges
from 100 kW to 600 MW per system

Mostly oil-fired autonomous power

stations. Total installed capacity 1753
MW.
High wind and PV potential
Currently installed >450 MW of wind
and PV capacities , accounting for 17%
of the annual load demand

Regional Workshop
Athens 9/2/2016

Hybrid Stations in Island Systems

Dr. Stavros Papathanassiou, NTUA

Isolated island systems:

A particularly favorable case
Isolated island systems, due to their particular characteristics, are very well suited for the
application of storage:
Low load factor and large demand variations, in all time scales, impose need for flexible
generation and expensive peaking units with very low utilization factors
Due to their small size, increased need for provision of all sorts of ancillary services,
including very high levels of primary reserves
Favorable RES potential (wind and solar) leads to deployment of relatively large wind and
PV capacities with low geographical dispersion (hence large stochastic variability, low
dependability, difficult to forecast)
Resulting conservative system management leads to increased RES energy curtailments

As a result, island systems are characterized as saturated, in the sense that development
new RES generation potential is not feasible
Use of oil-fired generation(diesel engines) results in high generation cost and therefore
creates favorable potential for the viability of expensive storage projects
Small system size smaller storage capacities and therefore investments, favoring also
new and promising storage technologies
Regional Workshop
Athens 9/2/2016

Hybrid Stations in Island Systems

Dr. Stavros Papathanassiou, NTUA

Hybrid Power Stations (HPS)

Storage in the Non-Interconnected Island (NII) systems

Definition:

Hybrid Power Station: Combination of RES units & energy storage

devices, with controllable generating units

Virtual Power Plants

Requirements:

- RES output power <120% of storage system power capacity

- Large storage capacity (typically sufficient for >8 h operation at rated power)

- Arbitrage discouraged: Absorption from grid <30% of annually stored energy

Field of interest : Non Interconnected Islands, especially those saturated in terms of new
RES capacity
Technologies:

Wind farms (WF) with pumped storage

Wind farms (WF) with battery storage
Photovoltaic Parks (PV) with battery storage

Regional Workshop
Athens 9/2/2016

Hybrid Stations in Island Systems

Dr. Stavros Papathanassiou, NTUA

Prospective application
in near future

Regulatory framework for HPS

Basic operating principles

HPS the means to integrate additional RES capacity in saturated systems

Modification of existing RES stations with addition of storage, to improve efficiency utilizing
energy curtailments: acceptable, but not really feasible

Storage and RES facilities of the HPS: not necessarily at the same location, nor directly
interconnected to each other
Each component is connected to the island grid

Energy generated by RES units of the HPS can be:

Stored
Basic exploitation mode

Substituting scheduled production of controllable HPS generation

units (RES generates, storage provides balancing)

Directly fed to the grid

Exploiting any RES absorption margin of the system (excess setpoint), provided that no curtailments are imposed to other RES

Stored energy is recovered as dispatchable generation, typically at peak load hours

HPS dispatchable generation prioritized against conventional. Priority equal to other

RES stations
Regional Workshop
Athens 9/2/2016

Hybrid Stations in Island Systems

Dr. Stavros Papathanassiou, NTUA

Regulatory framework for HPS

Basic operating principles

Day ahead scheduling (DAS) is applied, followed by intra-day rescheduling for the
second half of the day (last 12 hours)
HPS submits daily (or 12-hour) energy offers, based on available energy reserve and RES
forecasting. NII Operator dispatches HPS energy offers on the load curve to optimize
system operation (mainly at peak load hours, to substitute conventional peaking units)
HPS dispatchable units are then operated much as the substituted conventional units:
Subject to dispatch scheduling, real time dispatch, AGC, providing full ancillary services
(frequency, voltage regulation, reserves of all types, possibly black-start)
Firm capacity (termed as guaranteed power/energy) can be requested by the NII
System Operator:
Normally only at high load periods (rather than on a daily basis) to cover conventional
capacity deficits
Only then is arbitrage of thermal energy allowed: Thermal energy absorbed in the
valley of the load curve, returned at peak hours
Absorption optimally scheduled by the NII System Operator, based on load declaration
submitted by the HPS
Regional Workshop
Athens 9/2/2016

Hybrid Stations in Island Systems

Dr. Stavros Papathanassiou, NTUA

Fundamentals of HPS dispatching

Dispatch HPS offered energy
Load

Substituted
conventional
production

Dispatching HPSs
daily energy offer

Production of conventional units

Provision of guaranteed
energy at the request of
the NII System Operator:

Dispatch absorbed energy

at peak load hours
Load

Grid absorption in the

valley of the load curve

Substituted
conventional
production

Production of conventional units

t

Regional Workshop
Athens 9/2/2016

Hybrid Stations in Island Systems

Dr. Stavros Papathanassiou, NTUA

Arbitrage permitted
Grid absorption in the
valley of the load curve
Stored energy
dispatched at peak load
hours
8

NII system with pumped-storage

Operation modes

Hybrid Power
Station (HPS)

Upper Reservoir

A. RES pumping mode:

HPS wind energy stored
Diesel Power
Station (DPS)

Penstock

Wind Farms
(W/F)

HPS Wind Farm

Lower Reservoir

D
Turbines

Pumps

Island Load
Regional Workshop
Athens 9/2/2016

Hybrid Stations in Island Systems

Dr. Stavros Papathanassiou, NTUA

NII system with pumped-storage

Operation modes

Hybrid Power
Station (HPS)

Upper Reservoir

B. Pumping from the grid:

Conventional energy stored
Diesel Power
Station (DPS)

Penstock

Wind Farms
(W/F)

HPS Wind Farm

Lower Reservoir

D
Turbines

Pumps

Island Load
Regional Workshop
Athens 9/2/2016

Hybrid Stations in Island Systems

Dr. Stavros Papathanassiou, NTUA

10

NII system with pumped-storage

Operation modes

Hybrid Power
Station (HPS)

Upper Reservoir

C. Turbine mode:
Stored energy recovered
Diesel Power
Station (DPS)

Penstock

Wind Farms
(W/F)

HPS Wind Farm

Lower Reservoir

D
Turbines

Pumps

Island Load
Regional Workshop
Athens 9/2/2016

Hybrid Stations in Island Systems

Dr. Stavros Papathanassiou, NTUA

11

NII system with pumped-storage

Operation modes

Hybrid Power
Station (HPS)

Upper Reservoir

C. Pump-turbine mode:
Simultaneous generation
and storage
Diesel Power
Station (DPS)

Penstock

Wind Farms
(W/F)

HPS Wind Farm

Lower Reservoir

D
Turbines

Pumps

Island Load
Regional Workshop
Athens 9/2/2016

Hybrid Stations in Island Systems

Dr. Stavros Papathanassiou, NTUA

12

Typical HPS Operation

Pice

Pwind

Ppv

Phybrid

Consumers load

80

80

60

P (MW)
P (MW)

60

40

40
20

Arbitrage

20
0
5040

0
5040

5064

5088

5064

5088

5112
time 5112
(hours)

time (hours)

Hydro turbines production

Wind-hydro mode

5136

5136

5160

5160

5184

5184

Wind farm production

P (MW)

30

20

10

0
5040

5064

Regional Workshop
Athens 9/2/2016

5088

5112
time (hours)

5136

Hybrid Stations in Island Systems

Dr. Stavros Papathanassiou, NTUA

5160

5184

13

Regulatory Framework for HPS

Pricing principles

. Energy Pricing Reflects variable operating cost of substituted thermal energy

Energy generated by the HPS controllable units: pricing based on the variable cost of peaking
thermal units (units operating <30% of the year) of the island system
Energy absorbed from the grid: pricing based on the variable cost of base thermal units (units
operating >70% of the year) of the island system
RES energy:
Directly fed to the grid: at the standard RES tariffs
Substituting HPS scheduled generation: at the mean value of standard RES tariffs and
tariff applicable for the controllable HPS units
Independent metering for RES station, HPS controllable units and storage systems
Net metering possible between RES energy and energy absorbed to be stored At the
discretion of the HPS producer.

. Capacity credit Reflects avoided fixed cost of thermal generation

HPS remuneration based on firm capacity provided (termed as guaranteed power),
compensated at the avoided fixed cost of a new conventional power station of equivalent
capacity [Fixed cost = fixed operating cost + capital amortization expenses].

Pricing determined per NII system and included in production license of each HPS
Energy prices revised annually based on international oil prices, as well as every 5 years
Regional Workshop
Athens 9/2/2016

Hybrid Stations in Island Systems

Dr. Stavros Papathanassiou, NTUA

14

Indicative pricing for HPS

According to HPS production licenses issued so far

Pricing

Crete

Rhodes

Ikaria

Energy produced by the HPS

controllable units [/MWh]

236

160

295

Energy absorbed from the grid to

be stored [/MWh]

186

128

109

Wind energy directly injected to

the grid [/MWh]

110

110

110

Wind energy substituting

scheduled generation [/MWh]

173

135

202.5

127000

177600

188000

Capacity credit [/MW/year]

Regional Workshop
Athens 9/2/2016

Hybrid Stations in Island Systems

Dr. Stavros Papathanassiou, NTUA

15

Applications & Production Licenses for HPS

Information dated end of 2013

Capacity [MW]
Island

HPS technology

Crete
Lesvos
Ikaria
Rhodes

WF & pumped storage

WF & pumped storage
WF & pumped storage
WF & pumped storage

Total

Licenses
13
1
1
3
18

RES
WF

PV

312.10
18.40
2.70
48.45
381.7

0
0
0
0
0

Storage

Guaranteed
power

318.80
15.00
3.00
48.00
384.80

241.10
15.00
2.55
36.00
294.65

Capacity [MW]
Island

HPS technology

Applications

RES
WF

Crete
Karpathos - Rhodes - Crete
Sikinos
Kasos

WF & pumped storage

WF & battery storage
Total, all applications
WF,PV & pumped storage
WF & pumped storage
WF & pumped storage

Total
Regional Workshop
Athens 9/2/2016

5
7
12
1
1
1
15

PV

249
0
66
0
315
0
239.7 60.3
18
0
4.5
0
577.20 60.30

Hybrid Stations in Island Systems

Dr. Stavros Papathanassiou, NTUA

Storage

Guaranteed
power

224
56
280
250
18
4.5
552.50

171
46
217
250
12
3
482.00

16

Conclusions
A specific legal and regulatory framework has been developed for the introduction of
storage to the non-interconnected island systems in Greece
Storage facilities are integrated with RES generation in virtual power plants, termed
as Hybrid Power Stations:
Concept accommodates all important advantages offered by storage (RES capacity
firming, dispatch flexibility, peak shaving, ancillaries )
Compatible with special characteristics and market provisions in the NII
Addresses fundamental question of storage project feasibility by providing high
energy prices and capacity credit compensation
Has attracted considerable investor interest. Several hundred MW licensed, the
Ikaria HPS is being constructed
Concept not suitable for direct implementation in large systems with standard
market organization
HPS management and pricing after NII interconnection with mainland system: not
resolved yet
Regional Workshop
Athens 9/2/2016

Hybrid Stations in Island Systems

Dr. Stavros Papathanassiou, NTUA

17

Thank you!
Stavros Papathanassiou
st@power.ece.ntua.gr

Regional Workshop
Athens 9/2/2016

Hybrid Stations in Island Systems

Dr. Stavros Papathanassiou, NTUA