1. INFLUENCE OF LARGE SCALE WIND POWER AND INCREASED ENERGY SYSTEM FLEXIBILITY ON THE OPTIMAL LONG-TERM POWER PLANT PORTFOLIO Research Scientist Juha Kiviluoma, VTT Senior Scientist Peter Meibom, Risø DTU Correspondance: juha.kiviluoma@vtt.fi +358 (20) 722 6671

2. VTT TECHNICAL RESEARCH CENTRE OF FINLAND GENERATION EXPANSION MODEL WITH A HEAT TWIST Balmorel (www.balmorel.com) is one of the few generation expansion models that handles wind power in hourly time scalewww.balmorel.com It also includes heat production with CHP plants and heat boilers We included heat pumps, electric heat boilers, and heat storages Caveat: grid expansion costs not included Also plug-in electric vehicles modelled, but with exogenous investment decision

3. VTT TECHNICAL RESEARCH CENTRE OF FINLAND SUMMARY OF RESULTS A system with very large fraction of wind power competitive If wind power costs comparatively low No grid constraints Flexibility from heat important Flexibility from heat more important for wind power integration than flexibility from electric vehicles Reducing CO 2 emission dramatically seems to be rather inexpensive Methodological: modelling heat and power investments With heat storages One year 2035 optimization with hourly time steps Nuclear and wind power most competitive, interesting dynamics Smart charging and discharging of plug-in electric vehicles have a decreasing utility for the system Has been submitted to Energy this year

4. VTT TECHNICAL RESEARCH CENTRE OF FINLAND SOME ASSUMPTIONS District heating only

5. VTT TECHNICAL RESEARCH CENTRE OF FINLAND SCENARIOS EXPLAINED Number in the scenario name: wind power investment cost €/kW OnlyPlugIn  plug-ins have been enables, but heat measures not OnlyHeat  only heat measures enabled HeatPlugIn  both flexibility mechanisms included (heat and plug-ins) NoNuc  No new nuclear allowed (there are some old plants)

6. VTT TECHNICAL RESEARCH CENTRE OF FINLAND FLEXIBILITY FROM HEAT ENABLES A LARGE INCREASE IN WIND

7. VTT TECHNICAL RESEARCH CENTRE OF FINLAND SYSTEM OPERATION AT VERY LARGE WIND POWER PENETRATION Selected two weeks (worst case) HeatPlugIn700NoNuc (highest wind scenario)

8. VTT TECHNICAL RESEARCH CENTRE OF FINLAND HOW WIND PRODUCTION AFFECTS HEAT PRODUCTION Wind production (GW) Heat production (GW) 1 2 3 4

9. VTT TECHNICAL RESEARCH CENTRE OF FINLAND AVERAGE COST OF ELECTRICITY PRODUCTION Average production cost (€/MWh), not average price Heat measures -2 €/MWh, if fuel prices high Plug-ins -1 €/MWh Nuclear -2 – -4 €/MWh, depending on wind power investment cost CO 2 emissions from 45 Mt to 2 – 20 Mt €/MWh