1. Review of eStorage’s first year results WP3 Benefits of Storage and Regulatory Framework & Market Design 30 October 2013 Wim van der Veen - DNV KEMA

2. © 2013 eStorage2 WP3 review of first years results Agenda  WP3 overview  Tasks  Progress  Main results 30 October 2013 2

3. © 2013 eStorage3 WP3 review of first years results Agenda  WP3 overview  Tasks  Progress  Main results 30 October 2013 3

4. © 2013 eStorage4 General Overview Title and objective WP3 Title:  Benefits of Storage and Regulatory Framework & Market Design Objective:  Quantify the economic and environmental value of variable speed PSP units;  Recommend Regulatory Framework & Market Design, enabling a massive roll out of flexible energy storage in the EU market context, necessary for the EU climate ambitions. 30 October 2013 4

5. © 2013 eStorage5 WP3 review of first years results Agenda  WP3 overview  Tasks  Progress  Main results 30 October 2013 5

6. © 2013 eStorage6 Tasks 30 October 2013 6

7. © 2013 eStorage7 Task 3.1 Scenarios Title Formulating Development Scenarios and Identifying the Role of Storage for the Future EU Electricity System 30 October 2013 7

8. © 2013 eStorage8 Task 3.1 Scenarios Objective  Quantification of impacts and value of energy storage requires the formulation of plausible scenarios for future development of the interconnected European system with incorporation of: o the objective of expanding renewable capacity, as well as o the expected development of electricity networks and demand-side participation  The scenarios developed will describe how the electricity system will change from the current state towards 2050 vision 30 October 2013 8

9. © 2013 eStorage9 Task 3.1 Scenarios  Use DNV KEMA’s Europe Market model o Ensure development and quantification of scenarios for the future EU electricity system o Provide qualitative assessment of the need for flexibility and role of storage o Provide insight on the critical ingredients of such scenarios based on experience in building and using similar approaches for strategic decision-making purposes and will lead the grid adequacy study. 30 October 2013 9

10. © 2013 eStorage10 Task 3.1 Scenarios Content of scenarios (ENTSO-E Draft CBA methodology)  Planning scenarios are a coherent, comprehensive and internally consistent description of a plausible future (in general composed of several time horizons) built on the imagined interaction of economic key parameters (including economic growth, fuel prices, CO2 prices, etc.).  A planning scenario is characterized by a generation portfolio (capacity forecast, type of generation, etc.), demand forecast (impact of efficiency measures, rate of growth, shape of demand curve, etc.), and exchange patterns with the systems outside the studied region.  A scenario may be based on trends and/or local specificities (bottom-up scenarios) or energy policy targets and/or global optimisation (top-down scenarios). 30 October 2013 10

11. © 2013 eStorage11 Task 3.2 – Value of Storage Title and objective TASK 3.2: Economic and Environmental Value of Storage in the future EU electricity Systems The intention of this task in particular is to make use of DNV KEMA and Imperial’s models for analysing the integration of intermittent renewables into the EU electricity system 30 October 2013 11

12. © 2013 eStorage12 Task 3.2 – Value of Storage Work  The work in this task will proceed in parallel using two complementary modelling approaches: o one focused on fundamental economic value of storage for both short-term system operation and long-term design decisions; o the other looking into the operation of storage within future competitive European markets, both for electricity and for ancillary services. 30 October 2013 12

13. © 2013 eStorage13 Task 3.2 – Value of Storage Work  A third stream of work in this task will use both modelling approaches to:  move from a general evaluation of the potential role of storage in the EU electricity system, towards the specific technology option of variable speed retrofit of existing PSPs in Europe;  carry out an economic and environmental assessment of an EU- wide rollout of this technology. 30 October 2013 13

14. © 2013 eStorage14 Task 3.2 – Value of Storage Sub tasks  Subtask 3.2.1: Fundamental economic evaluation of storage for system operation and design  Subtask 3.2.2: Value of storage for participation in competitive electricity markets  Subtask 3.2.3: Value of EU-wide deployment of variable speed retrofit of existing PSP schemes 30 October 2013 14

15. © 2013 eStorage15 Task 3.3 Obstacles in EU Framework Title and objective TASK 3.3: Obstacles for the integration of Storage in Current EU Regulatory and Market Framework  Survey of current market and regulatory mechanisms pertaining to storage facilities in selected European countries  Creating a favourable regulatory and market framework for the use of storage systems. 30 October 2013 15

16. © 2013 eStorage16 Task 3.4 – Regulatory Recommendations Title and objective TASK 3.4: Regulatory Recommendations for Storage in European Market Rules which support efficient large scale integration of renewable electricity and energy storage on a European scale  Guidelines for efficient and non-discriminatory grid access  Include interactions with stakeholders 30 October 2013 16

17. © 2013 eStorage17 WP3 review of first years results Agenda  WP3 overview  Tasks  Progress  Main results 30 October 2013 17

18. © 2013 eStorage18 Work Package 3 Progress  At the beginning of the project a detailed work plan has been drafted  Every month a telephone conference is held with all task leaders or representatives  The are no official deliverables due in the first year for all tasks and sub-tasks  Now progress per task 30 October 2013 18

19. © 2013 eStorage19 Task 3.1 Scenarios Progress Literature study  European policy and scenarios,  Demand development  Technology development  Development of fuel supply and fuel prices. 30 October 2013 19

20. © 2013 eStorage20 Task 3.1 Scenarios Progress Internal deliverable literature study:  Four reports on the subjects just mentioned  Reports were reviewed and commented by o WP3 partners o Other work package partners 30 October 2013 20

21. © 2013 eStorage21 Task 3.2 Value of storage Progress  Survey of similar projects or studies recently conducted on a similar European-wide scale.  Exchange of input data templates to ensure consistency between inputs to both modelling tools and the scenarios developed in Task 3.1.  Feedback on literature study of Task 3.1 30 October 2013 21

22. © 2013 eStorage22 Task 3.3 Obstacles for integration of storage Progress  Start of survey of current market and regulatory mechanisms pertaining to storage facilities in selected European countries 30 October 2013 22

23. © 2013 eStorage23 Task 3.4 Regulatory recommendations Progress  This task is only to start in month 36  Feedback on literature study of Task 3.1 30 October 2013 23

24. © 2013 eStorage24 WP3 review of first years results Agenda  WP3 overview  Tasks  Progress  Main results 30 October 2013 24

25. © 2013 eStorage25 WP3 Main results The most tangible results are on Task 3.1: Scenario development Literature study on  Scenarios and studies  Demand  Fuel development  Technology  Internal deliverable: 4 reports on these items  Some highlights – further discussion in Break Out sessions this afternoon 30 October 2013 25

26. © 2013 eStorage26 WP3 main results Report on recent scenario development  Inventory of recent roadmap studies  Comment on studies  Clustering 30 October 2013 26

27. © 2013 eStorage27 WP3 main results Report on recent scenario development Clusters to focus/enable choice Cluster 1: High RES – high demand Cluster 2: High RES – low demand Cluster 3: Medium RES and Nuclear Cluster 4: High Nuclear 30 October 2013 27

28. © 2013 eStorage28 WP3 main results Report on demand development  Development from recent studies  Demand drivers  Demand response 30 October 2013 28 Source: Irene-40

29. © 2013 eStorage29 WP3 main results Report on demand development 30 October 2013 29 Source: Irene-40

30. © 2013 eStorage30 WP3 main results Report on fuel development 30 October 2013 30  Development of demand  Development of reserves and resources  Development of fuel prices

31. © 2013 eStorage31 WP3 main results Report on fuel development – reserves and resources 30 October 2013 31

32. © 2013 eStorage32 WP3 main results Report on fuel development – fuel prices 30 October 2013 32

33. © 2013 eStorage33 Track B Technology development Assess technology developments of: o renewable power generation o thermal power generation o electricity storage o transmission technologies. Technologies that are analysed: Aspects discussed per technology o Current status o Typical characteristics o Technological development o Cost development o Potential 30 October 2013 33

34. © 2013 eStorage34 Questions? 30 October 2013 34

35. A consortium of energy-industry leaders and academic researchers Algoé, a management consultancy. Alstom, a leading power generation and grid equipment and solutions company. DNV KEMA, the global expert in energy and sustainability consultancy. EDF, the world’s largest producer of electricity. Elia, one of Europe’s leading electricity transmission system operators. Imperial College, a provider of world- class education and research. © 2013 eStorage35