VERBUND Energy Transition Harald Wechselberger RWEA Conference Bucharest, 30th th of October 2017 VERBUND AG, www.verbund.com
VERBUND VERBUND AG, www.verbund.com Page 2
VERBUND at a Glance 96 % production from renewable sources approx. 3,000 employees 127 hydro power plants strategic focus on Austria and Germany No. 1 in climate change mitigation among European power supply companies 153 wind turbines Austria s leading electricity company first green bond in German-seaking Europe 51 % owned by the Republic of Austria Austria-wide charging infrastructure for electric vehicles market leader in marketing of flexibility and green electricity in Austria and Germany environmental measures - 280 millions to be invested until 2025 environmental management top-10-position of 160 energy companies analysed by oekom research VERBUND AG, www.verbund.com
VERBUND - Highlights Integrated utility with generation, transmission, trading and sales of electricity 127 hydro power plants in Austria and Germany (Bavaria) approx. 8,2 GW 31 TWh total production (2015) 104 TWh trading volume in 2016, active in 10 European countries 3,500 km of line length of the Austrian transmission grid VERBUND AG, www.verbund.com Page 4
VERBUND Wind Energy Portfolio 153 turbines / 421 MW / 1 TWh Enercon E-66, E-82, E-101, E-126 Senvion 3.2M114 Germany 86 MW Austria 106 MW Romania 226 MW VERBUND AG, www.verbund.com Page 5
Energy Transition 3 dimensions to be asked: 1. Technical dimension: Is Wind already an integrated part of the electrical system? 2. Ecconomical dimension: Is Wind already competitive in the energy market? 3. Social dimension: Is the society ready for a transition? VERBUND AG, www.verbund.com Page 6
Technical Dimension VERBUND AG, www.verbund.com Page 7
Wind Energy As Integrated Part Of The Electricity System Yesterday Energy production from renewables Today Market integration of renewables Pushing renewables Fixed feed in tariffs Full maintenance contracts Exploring market integration Trading on the electricity stock exchange Insourcing maintenance activities Higher requirements Tomorrow Grid stability through renewables Utilising full renewable potential Provision of negative control power Excess energy for sector coupling VERBUND AG, www.verbund.com Page 8
Wind Energy in Romania Energy is sold on the stock exchange (OPCOM) Provision of day ahead power performance forecasts and intraday to TSO Power curtailments can be requested by the TSO Intraday market with low liquidity Reduction of balancing costs by short term market Reserve of pos. balancing energy of 1% Quota obligation system = Energy price/mwh + Green certificate(s) Incentive system for renewables, quota obligation for selling of renewable energy; can be met by purchasing green certificates by the energy seller Selling of the produced energy on the stock market Different number of certificates for different RES technologies Retrospective changes of the system VERBUND AG, www.verbund.com Page 9
Market Situation in Romania Characteristic Week (2016) Balancing energy market not symmetrical High costs for deficit energy Low prices for exceeding energy RON / MWh 300 250 200 150 100 50 Average Market Prices In Year 2016 Avg. OPCOM Day Ahead Avg. ELECTRICA Exc. Avg. ELECTRICA Def. T1 T2 b b a a Market Value Wind Energy 2016 (RON/MWh) Romania d d Mean ROPEX/Day-Ahead 149,82 Profile Value Wind 0% Error 133,57 (-11%) Specific Balancing Energy Costs 23,3 a cost for excedent energy (lost revenue) b cost for deficit energy 0 0 3 6 9 12 15 18 21 0 3 6 9 12 15 18 21 0 3 6 9 12 15 18 21 0 3 6 9 12 15 18 21 0 3 6 9 12 15 18 21 0 3 6 9 12 15 18 21 0 3 6 9 12 15 18 21 Monday Tuesday Wednesday Thursday Friday Saturday Sunday T1 a<b -> Night T2 a>b -> Day VERBUND AG, www.verbund.com Page 10
Participation in Tenders for Control Energy to Increase Revenues in Austria, relevant for Romania as well? How and to what extend can wind energy participate? Prequalification according to framework conditions in Operation Handbook ENTSO-E, Policy 1 mandatory Long term control power products (secondary control) difficult to offer due to volatile wind production Fall back hydro power plants for reserve capacity (Synergies within VERBUND) Prequalification for negative reserve power only Wind energy capable for tertiary control power Minimum bid of 5 MW Tendering of 4 hour time slices Capacity charge and commodity price Provision of service within 15 min VERBUND AG, www.verbund.com Page 11
Economical Dimension VERBUND AG, www.verbund.com Page 12
Economical Costs Significant increase of annual energy yield, still continuing Significant decrease of CAPEX and OPEX, further reductions ongoing Level of app. 40,-- EUR/MWh achievable 200 +85% within last 6 years 100-20% within last 6 years Annual energy yield [%] 150 100 50 0 Enercon E82-2.3 MW Enercon E101-3.0 MW Nordex N131-3.0 MW Costs per MWh standardized [%] 90 80 70 Enercon E82-2.3 MW Enercon E101-3.0 MW Nordex N131-3.0 MW VERBUND AG, www.verbund.com Seite 13 Page
Further Reduction of OPEX in Romania possible? Reduction of maintenance and repair costs Negotiation about alternative maintenance concepts Reduction of costs for technical operations Insourcing of the operation of the substations and changing the legal condition (unstaffed and remote SS) Insurance contract: establishing a risk community Decreasing the transmission and distributing tariff Changing the energy balancing system (symmetric market, controlling power range through auctions, prequalification) Increasing the liquidity in intraday trading (technical change of trading system) VERBUND AG, www.verbund.com Page 14
Social Dimension VERBUND AG, www.verbund.com Page 15
Sustainable Governance Indicator (SGI) Index Source: www.sgi-network.org The SGI is a platform built on a cross-national survey of governance that identifies reform needs in 41 EU and OECD countries. In almost all Indicators, Policy Performance, Democracy and Governance, Romania is placed on the lower ranks. VERBUND AG, www.verbund.com Page 16
Social Justice Romania s overall performance on the SJI places it among the EU countries to the worst. Most worrying, it ranks second to last in the areas of poverty prevention and health. With regard to our focus on children and youth, Romania s score on this subindex of 2.77 places it last in the EU. Source: Social Justice in the EU Index Report 2016 by Daniel Schraad-Tischler and Christof Schiller published by Bertelsman Stiftung VERBUND AG, www.verbund.com Page 17
Conclusions and Outlook VERBUND AG, www.verbund.com Page 18
Technical Dimension Economical Dimension Social Dimension VERBUND AG, www.verbund.com Page 19
Contact Harald Wechselberger Executive Director VERBUND Wind Power Romania Managing Director VERBUND Wind Power DE VERBUND Hydro Power GmbH Europaplatz 2, 1150 Vienna, Austria T +43 (0)50 313-52 4 62 M +43 (0)664 828 57 59 E harald.wechselberger@verbund.com VERBUND AG, www.verbund.com Page 20