1. Ancillary services or capacity when needed
Mats Nilsson
2013-04
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2. Political emotions…
PASSION!
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2
Confidentiality - Critical (C4), High (C3), Medium (C2), None (C1)

3. The electricity price in Sweden 1892-2000 (SEK 2000)
2500
“[…] Periodically extremely high prices on Nord Pool.”
2000 My translation, my bold
1500
SEK/MWh
1000
500
0
1892 1912 1932 1952 1972 1992
Year
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Confidentiality - Critical (C4), High (C3), Medium (C2), None (C1)

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Confidentiality - Critical (C4), High (C3), Medium (C2), None (C1)

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Confidentiality - Critical (C4), High (C3), Medium (C2), None (C1)

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Confidentiality - Critical (C4), High (C3), Medium (C2), None (C1)

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Confidentiality - Critical (C4), High (C3), Medium (C2), None (C1)

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Confidentiality - Critical (C4), High (C3), Medium (C2), None (C1)

9. Panic?
$
Protectionism?
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Environment
Confidentiality - Critical (C4), High (C3), Medium (C2), None (C1)

10. Capacity mechanisms in Europe under construction
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Confidentiality - Critical (C4), High (C3), Medium (C2), None (C1)

11. Demand response should be encouraged
Reserve, max Demand, min
2011/2012 1750 25%
2012/2013 1750 25%
2013/2014 1500 50%
2014/2015 1500 50%
2015/2016 1000 75%
2016/2017 1000 75%
2017/2018 750 100%
2018/2019 750 100%
2019/2020 750 100%
Source: https://lagen.nu/2010:2004
11 | Title of presentation | Author | YYYY.MM.DD
Confidentiality - Critical (C4), High (C3), Medium (C2), None (C1)

12. The Swedish experience: Transmission stabilised supply 2009-2012
Swedish net exchange 2010 through 2012
10 000
5 000
0
jan-10
okt-11
aug-10
maj-12
dec-12
mar-11
Export Sweden Import
-5 000
GWh
-10 000
-15 000
Extreme winter, low Extreme winter, low Record levels hydro
hydro and nuclear hydro and nuclear And “good” nuclear
-20 000
12 |-25 000
Title of presentation | Author | YYYY.MM.DD
Confidentiality - Critical (C4), High (C3), Medium (C2), None (C1)

13. Scandinavia as the battery for urban Europe
13 | Title of presentation | Author | YYYY.MM.DD
Confidentiality - Critical (C4), High (C3), Medium (C2), None (C1)

14. Slide courtesy of Lion Hirth
Three intrinsic properties of variable
Renewable electricity generation
Resources are
Output is fluctuating Output is uncertain
location-specific
• Wind speeds and solar • Winds and radiation is • Wind and solar resource
radiation vary uncertain day-ahead quality varies spatially
• Electricity is not a • Adjusting generation on • Electricity is not a
homogeneous good over short notice is costly homogeneous good across
time (storage constraints) (ramping constraints) space (grid constraints)
• Thus its value depends on • Forecast errors are costly • Thus its value depends on
when it is produced where it is generated
„Profile costs“ „Balancing costs“ „Grid-related costs“
(„locational / infrastructure
(„shaping costs“) („imbalance costs“)
costs“)
14

15. Slide courtesy of Lion Hirthj
System Adaptation: From short-term to long-term
Short-term Long-term
integration costs integration costs
15

16. Slide courtesy of Lion Hirth
Integration costs are a function of the penetration share (and much more)
16

17. Levelized Capital Cost of Capacity
160
140
120
100
$/MWh
80
60
40
20
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17 | Title of presentation | Author | YYYY.MM.DD
on
C
Confidentiality - Critical (C4), High (C3), Medium (C2), None (C1)

18. Thank you!
Questions?
mats.nilsson2@vattenfall.com
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