Thermal Power Plant Flexibility

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Integration of variable energy production from renewables creates a need for increasingly flexible power systems – from supply, transmission, distribution and demand. This report zooms in on the benefits of flexible thermal power plants, including the technical aspects related to enhancing the flexibility of power plants, and incentives for investing in andoperating flexible power plants.

Denmark is one of the frontrunners in terms of flexible power systems. For decades Denmark has had a close cooperation with neighbouring countries in the exchange of power, which in combination with quite large differences in electricity demand from day to night, encouraged Danish
power plants to enhance their flexibility. The creation of a Nordic power spot market with merit order dispatch and hour-by-hour pricing has been instrumental in incentivising thermal plant operators to improve and utilise the flexibility of their plants during the past two decades. This evolution
illustrates the opportunities associated with exploiting the flexibility potential of existing infrastructure. With wind power accounting for 43% of annual Danish power consumption in 2017, and targeted to exceed 50% by 2020, the Danish thermal power fleet has been compelled to
become the most flexible in the world, and thus an important provider of system flexibility.
 
China has built a very large fleet of thermal, coal-based power plants over the past 20 years. Focus has been the expansion of the power system to cope with increasing demand for power in the fast-growing Chinese economy. Limited attention had been paid to creating flexibility until recently, except for the establishment of pumped hydro storage plants. During the past ten years China has experienced an equally rapid deployment of wind power, and more recently solar PV. Integration of variable production from wind and solar has been challenging, as evidenced by extremely high rates of curtailment, i.e. forced reduction in power output.
 
This report examines the situation in China both today and in the future, with detailed analyses of the power system using a power system model developed by the China National Renewable Energy Centre (CNREC), combined with expertise on thermal power plants from the Electric Power
Planning Engineering Institute (EPPEI). In the analyses, experiences from Denmark and from the Nordic power market are used in a Chinese context to provide insight in how to incentivise flexibility in the Chinese power system.