Is a capacity subsidy a good idea for utilities?
Utilities are facing changes across Europe as the integration of renewables gains pace. Members of POWER-GEN Europe’s Advisory Board address some of the key questions ahead of POWER-GEN Europe 2014, being held in Cologne on June 3-5
Energy Digital will be publishing top energy executives’ answers to imperative questions throughout the week. The Roundtable participants are Philippe Paelinck, VP portfolio and strategic positioning, Alstom; Risto Paldanius, director, business development, Wärtsilä; Dr. Franco Rosatelli, CTO, Ansaldo Energia; and Dr. Tamer Turna, CEO, Yildirim Energy Holding Inc.
How could utilities be compensated for providing the underlying base power required to ensure a more reliable source of energy – for example, is a capacity subsidy a good idea?
Tamer Turna: The capacity subsidy is a practical idea, ensuring return on investment and securing jobs. However, I would like to see only capacity generating technologies younger than 30 years being subsidized. Older plants should be decommissioned, as they have served their purpose (and earned their money), and this will provide room for more efficient stations.
Risto Paldanius: As mentioned, there are two challenges related to security of supply: We should differentiate between capacity, which means ensuring longer term adequacy and capability; and addressing the short term flexibility requirements of the power system. A market-based approach that rewards flexible providers and promotes self-balancing can incentivize investment in flexibility. Flexible providers can also be used to provide backup (i.e. capacity).
Philippe Paelinck To ensure grid stability in the future power market, renewables need to contribute to security of supply just as fossil fuel operators need to contribute to climate protection. This could be achieved by renewables supporting the efficiency of the overall system by being traded together with stable forms of generation – and specifically in combination with efficient fossil fuel generation. The market would also need to factor in the cost of increased intermittency. The experience in Germany however, has demonstrated that the incentives for renewables can be overgenerous and distort investment. The rules governing the internal market will have to be considered carefully, especially in a context of flat or even decreasing electricity demand.
The so-called capacity market is one of several potential solutions to this issue, but national initiatives would need to be closely coordinated at EU level to avoid another layer of complexity that could potentially further undermine the situation.
Alstom is participating in a number of pilot projects in order to help new business models emerge. These are designed to help develop new contractual frameworks for renewable integration, and to minimize the integration costs and delays resulting from network reinforcement, as well as incentives. The integration of distributed energy resources aggregation also offers a potential alternative to traditional generation.
UK Nissan fleet owners receive commercial charging service
UK fleet owners of Nissan Leaf and e-NV200 models can avail of a new commercial charging service using vehicle-to-grid (V2G) technology.
The V2G technology developed by DREEV, which is a joint venture between EDF and Nuvve, which specialises in V2G technology, allows for two-way energy flow; both recharging an EV’s battery when electricity is at its cheapest, and discharging excess energy to sell back into the grid.
Fleet customers will save around £350 savings per charger each year, which equates to approximately 9,000 miles of driving charge per year.
EDF’s V2G business solution includes:
The supply and installation of a two-way connected compact 11kW charger capable of fully charging a Nissan LEAF, depending on the battery model, in 3 hours and 30 minutes - 50 per cent faster than a standard charger - with integrated DREEV technology.
A dedicated DREEV smart phone app, to define the vehicles’ driving energy requirements, track their state of charge in real time, and control charging at any time
Philip Valarino, Interim Head of EV Projects at EDF, said today’s announcement marks an important step on the UK’s journey towards electric mobility. "By combining the expertise and capabilities of EDF, Nissan and Dreev we have produced a solution that could transform the EV market as we look to help the UK in its journey to achieve Net Zero," he said. “Our hope is that forward-thinking businesses across the country will be persuaded to convert their traditional fleets to electric, providing them with both an environmental and economic advantage in an increasingly crowded market.”
Andrew Humberstone, Managing Director, NMGB, said Nissan has been a pioneer in 100% electric mobility since 2010, and the integration of electric vehicles into the company is at the heart of Nissan's vision for intelligent mobility.
He added the Nissan LEAF, with more than half a million units already sold worldwide - is the only model today to allow V2G two-way charging and offers economic opportunities for businesses "that no other electric vehicle does today". Click here for more information.
FirstEnergy Corp, which aims to electrify 30% of its approximately 3,400 light duty and aerial fleet vehicles by 2030, has joined the Electric Highway Coalition. The group of electric companies, which has grown to 14 members, is committed to enabling long-distance EV travel through a network of EV fast-charging stations connecting major highway systems.
The Edison Electric Institute estimates 18 million EVs will be on US roads by 2030. While many drivers recognize the benefits of driving an EV, some are concerned with the availability of charging stations during long road trips. Through their unified efforts, the members of the EHC are addressing this "range anxiety" and demonstrating to customers that EVs are a smart choice for traveling long distances as well as driving around town.
Volta Industries has installed new charging stations at Safeway in Upper Marlboro, Maryland, and Renton, Washington.