The EU and China have similar challenges when expanding their complex grid network. Both have large populations and multiple borders (China has 23 provinces, five autonomous regions, four municipalities and two administrative regions). Both must rapidly add clean power whilst ensuring energy security at the lowest cost. Helen Farrell at ECECP describes their project to use European ENTSO-E modelling tools to assess scenarios for China. One key difference between the two regions is that China’s prices are centrally fixed. So the economic shocks inflicted by the Covid pandemic resulted in power outages and shortages because the artificial prices didn’t reflect the true cost of supply. The ENTSO-E models include working markets that account for price changes, yet still build resilient, responsive grids. The results of the project reveal pathways where targets can be met with realistic market-based pricing.
In 2020-2021, ECECP worked with European and Chinese grid planning agencies in a mutual learning exercise which it is hoped will result in significant CO2 emissions reductions in China’s power system, mirroring the results already seen in the European electricity transmission system.
What is energy modelling?
Energy modelling involves assessment of the impact of individual planned transmission projects against various projected scenarios. Such assessments are updated and re-evaluated at regular intervals to ensure that any grid development will ensure security of supply. Energy modelling is an increasingly important tool that is used to facilitate the integration of renewable power generation into the supply system.
The EU and China have very similar challenges
The task facing grid planners in both Europe and China is enormous. They have a combined population of around 2 billion (1.4 billion in China and 447 million in Europe). Both regions have internal borders – the EU has 27 member states, while China has 23 provinces, five autonomous regions, four municipalities and two administrative regions. The aim of grid planners is to ensure security of supply, while planning ahead to ensure that electricity generated can travel to where it is needed, all the time keeping an eagle eye on pricing and affordability. Add to this the need to incorporate renewables in the fuel mix in the battle against climate change, and the headaches faced by grid planners become clear.
While many of the challenges facing China and Europe are unique to each economic region, they do have plenty in common: they have seen their electricity grids develop and expand in tandem, and have a similar sense of urgency to reduce coal generation and maximise renewable energy generation. While Europe has the largest synchronous electrical grid in the world, operated by the European TSOs, China has two wide area synchronous grids, one operated by State Grid and the other by the Southern Power Grid.
All the grids in China have been interlinked via High Voltage Direct Current (HVDC) connections since 2011. China is taking the first steps towards development of a spot market that will bring a new flexibility to its electricity sector. If energy modelling can prove the need for a more flexible approach to electricity transmission across borders, as it does in Europe, the result is likely to be a more rapid integration of RE into the system.
How does ENTSO-E do modelling?
ENTSO-E has 42 participants, made up of the transmission system operators in the EU. ENTSO-E is responsible for drawing up a Ten Year Network Development Plan (TYNDP) which is re-evaluated every two years. The TYNDP includes projects that have been selected through a pan-European screening process by ENTSO-E as well as projects submitted directly by TSOs or by third party investors that meet the European Commission’s criteria for inclusion in the TYNDP. The subsequent deliberations involve the full participation of all market players.
The screening process assesses the value of new infrastructure (new lines or reinforcement of existing lines) in different scenarios for the future. All potential new connections are ranked according to their ‘benefit over cost ratio’.
Then follows a complex cost benefit analysis that factors in system costs, including capital expenditure, variable costs associated with heat and power generation, operation and maintenance, emission taxes and the value of lost load.
ENTSO-E’s TYNDP is a central reference point for European electricity grid development
The 2018 TYNDP includes 166 transmission projects and 15 storage projects, all scheduled to be commissioned before 2030. Cost benefit evaluations were conducted against four European scenarios. The conclusions were that investment in more grid connections was a precondition for further RE integration, as well as improved security of supply as the new projects relieve existing bottlenecks in the system.
Central to the success of the TYNDP is its public nature. Projects that are included in the Project of Common Interest (PCI) list have to be included in the TYNDP and have to offer transparency.
ENTSO-E requires participants to share data, and is guided by the recognition that the market will determine the use of the grid. As such, it is vital that stakeholders take an active role in the planning process, so that realistic predictions are made about supply and demand. As an integrated system, the market model emulates the European spot market, and borders with the highest socio-economic benefits compared to investment costs of expansion are selected for further assessment.
Using common methodologies and tools, the experts look at how power will flow in Europe in 2030/2040, taking into account the different scenarios. This allows them to see where bottlenecks will be and how much transmission capacity is needed at borders to manage these flows.
How does China do modelling?
In China, power planning is conducted at a national and provincial level. It is prepared and issued by the National Energy Administration (NEA) following approval by the National Development and Reform Commission (NDRC). Power planning is completed two years in advance. Electric power plans are submitted to the NDRC for approval before the end of May of the first year of the Five-Year Plan, while provincial power plans have to be submitted a month later. These plans may be adjusted two to three years after approval so that they reflect the actual situation.
China has been introducing increasingly complex modelling into its energy planning since the 1980s. Its modelling processes are often strictly confidential, and many different models are used, both in the industrial sector and in academic institutions.
Applying ENTSO-E methodology to China
The ECECP project, carried out in the course of 2020- 2021, offered a unique opportunity to apply ENTSO-E methodology to two scenarios developed by China’s Energy Research Institute under the NDRC (CRI/CNREC): the Stated Policies Scenario and the Below 2˚C Scenario.
In the project, an assessment was carried out of 76 different proposed transmission projects under these two specific scenarios. The projected impact of these proposed initiatives was measured against a fixed ‘snapshot’ of the grid network. By introducing each project one by one into the network, and evaluating the impact of each project incrementally on pricing, distribution, renewable energy integration and a number of other factors, the ENTSO-E specialists established a set of potential new infrastructure lines (or reinforcements).
Afterwards, 3 new lines were selected for demonstration of the ENTSO-E detailed cost benefit analysis. The European specialists then shared their methodology and findings with their Chinese counterparts.
What did it find out?
It was found that both expanding and building new transmission capacity was beneficial. Individual projects were assessed and an opinion could be reached on which would be the most cost effective to implement.
ENTSO-E’s methodology is based on a spot market where energy can be quickly bought and sold as required, and a network that will facilitate transmission to more heavily populated regions where demand is more likely to spike. This helps to limit the amount of power generation based on fossil fuels that is required at peak load.
The project offered a unique opportunity for China and the EU to evaluate their modelling systems and work together to establish their strengths and weaknesses.
As the global economy bounced back from the economic shock inflicted by the Covid pandemic, fossil fuel prices spiked and China in particular saw power outages and shortages as its pricing system means that industries and power generation plants were unable to operate. Industries are required to stick to centrally fixed prices, and when fossil fuel prices become unstable, this quickly start to be untenable. A modelling system that takes into account such variations, and that seeks to build a resilient, responsive grid that can cope with the inevitable fluctuations in prices, and that makes long term plans for electricity to be delivered nationwide in a stable, secure manner, cannot fail to be of benefit.
‘Through participating in this project, experts from both China and Europe have gained an in-depth understanding of each other’s power grid planning methods. Although the methods are different, the objectives for grid planning are basically the same, only with different focuses in certain steps. Chinese experts have reaped no little benefit from their participation in the research team working on this project.
Looking forward, renewable energy will see rapid development in order to meet energy transition targets. Yet this leaves many issues that require further study and analysis. I genuinely hope that experts from China and the EU will be able to work together to continue this work towards energy cooperation and exchanges.’ – Yang Kun, Executive President of China Electricity Council
Helen Farrell is the Editor of the EU China Energy Magazine for the EU-China Energy Cooperation Platform (ECECP)
The report “ENTSO-E Grid Planning Modelling Showcase for China Report” can be found here
This article was first published in the EU-China Energy Magazine – 2021 Christmas Double Issue, available in English and Chinese, and is published here with permission