FUNDAMENTALS OF 100%RES POWER SYSTEM ”OPTIMAL CAPACITY MIX FOR 100%RES POWER SYSTEM” Jyrki Leino Senior Manager, Power System Modelling 24.8.2019 FUNDAMENTALS OF 100%RES POWER SYSTEM

OUR PERSONNEL Approximately 5,400 professionals In over 140 locations WÄRTSILÄ Energy WHQ in Helsinki Finland, 185years old company OUR PERSONNEL Approximately 5,400 professionals In over 140 locations In over 60 countries 24.8.2019 FUNDAMENTALS OF 100%RES POWER SYSTEM

Installed power plant capacity 70 GW in 177 countries around the world Wärtsilä energy Installed power plant capacity 70 GW in 177 countries around the world 1854 MW 6849 MW Europe, output: 17.6 GW 1827 MW 3771 MW 1095 MW Asia & Middle East, output: 29.2 GW 10 115 MW 4889 MW 5139 MW Americas, output: 14 GW 2546 MW 1111 MW 9067 MW Mature technology and global references Africa, output: 7.4 GW 8258 MW Utilities IPP’s (Independent Power Producers) 5472 MW 1706 MW 3370 MW Industrials Municipalities, co-ops, Oil & Gas etc. 1216 MW 24.8.2019 FUNDAMENTALS OF 100%RES POWER SYSTEM

Wärtsilä PLEXOS modelling Activities OVER 70 COUNTRY AND SYSTEM STUDIES MADE BY WÄRTSILÄ ALL OVER THE WORLD Vast modelling experience and Plexos users since 2010 PLEXOS USER SINCE 2010 = PLEXOS study made by Wärtsilä

OUR VISION TOWARDS A 100% RENEWABLE ENERGY FUTURE The energy landscape is in transition towards more flexible and sustainable energy systems. 24.8.2019 FUNDAMENTALS OF 100%RES POWER SYSTEM

RES prices Price for renewable energy has reached a tipping point – all across the world Prices of renewables continue to drop Wärtsilä Vision towards 100%RES systems 24.8.2019 FUNDAMENTALS OF 100%RES POWER SYSTEM

Challenges and opportunities 100%RES Power System Challenges and opportunities 24.8.2019 FUNDAMENTALS OF 100%RES POWER SYSTEM

Main energy sources in a 100% renewable energy world A high renewable world will require massive amounts of solar, wind and energy storage PV will become the main energy source in the Sun Belt with 22 TWp global capacity for the power sector RES resources are different in different countries, causes several concerns... Solar PV based system Wind turbines based system Hydro power based system Technologies mix based system Source: Lappeenranta University of Technology 24.8.2019 FUNDAMENTALS OF 100%RES POWER SYSTEM

Increasing role of flexibility The 100% renewable energy system requires multiple forms of flexibility SEASONAL WEEKLY Fuel as a form of energy storage to balance seasonal variation. DAILY Longer duration energy balance and system reliability is ensured by Hydro, Batteries and Flexible thermal with Power to Gas Daily variations in generation are handled mainly by Batteries or Hydro Different kind of challenges, daily Solar PV, Seasonal P2G WITHOUT HYDRO 24.8.2019 FUNDAMENTALS OF 100%RES POWER SYSTEM

RES 50-80% Renewables as baseload ROLE OF TECHNOLOGIES IN THE ENERGY TRANSITION RES 0% ”Good old days” RES 20% Tipping point RES 50-80% Renewables as baseload RES 100% Final push Renewable Energy – wind and solar Inflexible Generation Flexible Generation Energy Storage Subsidies and political decision so far from 0% to 20% - today from 0% also 50-80% level possible based on prices – requires quite a lot flexibility from thermal and some storage 100% level requires final push and seasonal storage solution Today’s situation in many country Inflexible generation struggles heavily Case study Optimal mix

Optimal 100%RES power system? Case study and results 24.8.2019 FUNDAMENTALS OF 100%RES POWER SYSTEM

(e.g. food, fuel, textiles...) 100%RES SYSTEM CASE STUDY Resources RES 100% Power System ~95% Power to Gas Biomass Round trip efficiency ~85-90% Battery ~60% ~95% Hydro Round trip efficiency Demand Storage (LNG) Solar PV ~30% Wind ~99% Flexible thermal Curtailed energy Geothermal ~50% % = Efficiency % In this study Power-to-X (e.g. food, fuel, textiles...) 24.8.2019 FUNDAMENTALS OF 100%RES POWER SYSTEM

100%RES system modelling case Generic greenfield PLEXOS LT model for one year (2030) with hourly dispatch Profiles Senegal Germany Scenarios for 100%RES Solar + Battery Solar + Wind + Battery Solar + Wind + Battery + P2G with flexible thermal No hydro, Geo or Biomass considered System candidates Solar and Wind Batteries P2G with Flexible thermal 24.8.2019 FUNDAMENTALS OF 100%RES POWER SYSTEM

Gas consumption (G2P) Gas production (P2G) POWER to Gas modelling – plexos setup Gas consumption (G2P) Gas production (P2G) P2G converter act as an anti-generator  running as a load GasNode is linked to Fuel which is linked to Generator Every time P2G converter runs gas is produced in Gas Field Linked to Gas Field (P2G) via Constraint P2G link 24.8.2019 FUNDAMENTALS OF 100%RES POWER SYSTEM

Case study: Capacities SEN GER Thermal capacity factor ~12% Highly seasonal Solar makes no sense without seasonal storage Solar is dominant Wind is dominant 24.8.2019 FUNDAMENTALS OF 100%RES POWER SYSTEM

Case study: Energy + Curtailment + Cost SEN GER SEN modest increase in LCOE, GER highly seasonal Solar x5 increase in LCOE 24.8.2019 FUNDAMENTALS OF 100%RES POWER SYSTEM

Case study: Dispatch - Senegal 24.8.2019 FUNDAMENTALS OF 100%RES POWER SYSTEM

Case study: Dispatch - Germany 24.8.2019 FUNDAMENTALS OF 100%RES POWER SYSTEM

In 2030 100%RES system LCOE (USD/MWh) 75 Optimal ENERGY ONly 100%RES power systems x1 x2,5 x2,5 Demand x1,2 Deterministic Energy Only Model, Hydro not considered. PATH TO OPTIMAL 100%RES SYSTEM, hydro, biofuels, learning curves, new technologies,...? Note: GER Solar only requires 40% storage In 2030 100%RES system LCOE (USD/MWh) 75 x0,7 x0,4 24.8.2019 FUNDAMENTALS OF 100%RES POWER SYSTEM

Senior Manager, Power System Modelling THANK you Jyrki Leino Senior Manager, Power System Modelling