Ukraine provides an interesting case study into the challenges of integrating green technology into non-flexible energy systems. Changing the country’s existing infrastructure – both physical and regulatory, requires politicians, officials and businesses to sign on to a program whose benefits are difficult to see. But power system modelling based on big data analysis can help bring clarity and create a clear path to a carbon neutral future.
In 2017, Ukraine’s government adopted Energy Strategy 2035, setting the ambitious challenge of adapting the country’s existing power system to integrate it with the European one. In practice, this means the physical integration of the Ukrainian power network to ENTSO–E, the power network of the European Union (EU).
“These changes would not only give the country the ability to begin trading energy with the EU — they would also promote energy efficiency and security,” says Igor Petryk, Senior Market Development Manager at Wärtsilä Energy Business.
In order to stimulate the renewable energy production required under Energy Strategy 2035, the Ukrainian government set special fixed green tariffs of EUR 100 -150 per 1 kWh — more than twice the tariffs for power produced from nuclear and coal sources, which fluctuates with the market but costs around EUR 60 per 1 kWh. To guarantee demand for the more expensive renewable energy, the Ukrainian government created a "guaranteed customer" system and required the purchase of energy from renewable sources.
As a result, over the past couple of years, these tariffs boosted production of green energy. Plenty of solar panels and wind generators has been placed on Ukraine’s fields and valleys. According to Petryk, the capacity of wind and sun energy generators will reach 5.5 GW by the end of this year, and 7.5 GW by the end of 2020. For comparison, average energy consumption in Ukraine is around 18 GW, ranging between a peak of 26 GW in winter and 12 GW in summer.
But these same conditions that boost renewable energy production also add to its cost.
“As the price of solar panels and wind turbines has gone down over the past years and installations became viable without subsidies, many countries switched from feed-in tariffs to auctions, which reduces the electricity price for consumers,” says Petryk.
“Ukraine failed to introduce the auction system on time. As a result, the super-generous tariffs have attracted massive investments into the generating capacity that enjoys guaranteed payments. The cost of renewable energy is now becoming disproportionally high, and this may create an unbearable burden for consumers and a threat for further development of clean energy.”
An additional problem, Petryk says, is the inflexibility of the power system dating back to the Soviet times. “We, at Wärtsilä, believe this system is probably the most inflexible power system in the world. It is simply unable to absorb the rapidly growing volumes of intermittent green energy.”
As a result, the transmission system operator will have to curtail about 30% of renewable power generation, which under current law would still need to be paid for. As a result, the Ukrainian economy risks losing up to EUR 580 million producing green energy that can’t be consumed or stored.
Ukraine isn’t the only country facing the challenge of integrating renewables into their energy mix. The main difficulty comes from the fact that renewable energy generation depends on sources – wind and sun – that are not regular and sometimes not even predictable. Making the most of these sources requires a power system to be very flexible: there should be sources of extra energy in case renewable ones are temporarily not available. Ukraine however has a particular problem based in its Soviet-era energy infrastructure. The main sources of power are nuclear power plants, which are difficult to bring on- and off-line, and coal-fired power plants, which contribute substantial CO2 emissions to the atmosphere.
For more than two years, experts from Wärtsilä have been modelling Ukraine’s power system in cooperation with the state transmission system operator (TSO) to look for alternative options for flexible power generation.
The kind of complex calculations needed to do the modelling were made by PLEXOS, an advanced data analytics program. PLEXOS software, which was developed for the purpose of optimising power systems, allows TSOs, utilities and consultants to build a model of the power system and analyse various strategies for adding capacity or dispatching the assets, according to Jan Andersson, Senior Market Development Analyst at Wärtsilä Energy Business.
“The model takes into account important parameters such as renewable generation, power system reserves, costs, and emissions as well as power plant specific parameters such as start cost, ramp rates, and minimum up and down times,” Andersson explains.
All of these parameters are necessary to build the most realistic model of the power system possible, thereby generating accurate and reliable results.
In the Ukraine case, Wärtsilä calculated 20 different scenarios, combining the power generation capacities of renewable sources and internal combustion engines. The researchers came to the conclusion that the country needs an extra 2 GW of flexible energy, which can be generated by internal combustion engines running on natural gas.
“By implementing these engines rather than relying on coal-powered power generation, the country can save approximately EUR 300 million,” Petryk says.
The internal combustion engines also produce fewer CO2 emissions compared to coal-fired power generation. In fact, according to Wärtsilä’s calculations, using the internal combustion engines will shrink the CO2 emissions of power generation in Ukraine by 15%.
“Our results show that by adding 2-3 GW of flexibility in the system, renewable energy can be fully utilised, CO2 emission can be reduced significantly and at a lower cost compared to the business-as-usual case,” says Andersson.
Andersson says that Ukraine’s power system presents an interesting challenge. The current system, largely based on nuclear and coal power generation, is not suited to flexibility. Nevertheless, flexibility is exactly what is needed to utilise as much as possible of the increasing amounts of renewable energy promoted by government programs. Looking ahead, Andersson says, it would be sensible for Ukraine to keep its nuclear power systems as long as possible as this energy source is already CO2-free. Coal should be reduced in favour of renewables and flexible thermal plants running on gas would support integration of renewables in the power system. In the future, these flexible thermal plants can be converted to bio or synthetic gas to become carbon neutral.
