Smart

Network

Remote Islands – the green energy priority

Carl Bate – Head of Power Hub Commercialisation – Dong Energy
François Verkindt - Head of Power Generation Business– Schneider Electric

Smart Network, April 29 2015

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Question 1:
What is the biggest challenge when operating
an island's network?

1. Budget
2. CO2 footprint
3. Grid stability
4. Customer satisfaction
5. Maintenance

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Energy challenges for remote islands

• Increased renewables requires extra operating reserves and sophisticated

systems to make fast decisions

• More intermittent and distributed generation sources requires network

reinforcement and more intelligence to balance the grid

• Limited budgets require making the most of existing assets to optimize CapEx &
OpEx

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A partnership to answer remote island
energy challenges

Together, we have created a complete, integrated solution for remote islands 12

that improves grid stability through power forecasting and real-time control
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Faroe Islands

> Area of 1,399 km2 (i.e. 540 sq miles)

> 18 islands (17 are populated)
> 49,000 inhabitants
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> Main export: Fish and fish products
Faroe Island renewable ambition Smart
Network

2011 2020 2030

25% 0%
38%

62% 75%
100%

Renewable Fossil Renewable Fossil Renewable Fossil

100% Renewable electrical energy production

by 2030

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SEV: the Faroese Electrical Company

E
> General facts :
S > Vertically Integrated Company
V > 100 % owned by all Faroese municipalities
> Non-profit, founded 1st October 1946
> Monopoly on grid operation (transmission &
distribution)
> “De facto” monopoly on production (97%)
> Under an obligation to supply
> “Micro isolated system” in EU terms ( < 500 GWh )
- Directive 2009/72

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3-level architecture for
Distributed energy optimisation
system optimisation • Economic dispatching • Asset technical &
(business & flexibility commercial availability
regulations) • Unit commitments
• Baseload calculation • Mobilisation &
• Reserve optimisation performance evaluation
• Load shedding matrix
Weather Distribution
Optimisation data
operation
network
operation
3 of supply
• Production
Supply side operation Demand side operation
• Network
& demand forecasts • Automatic generation control • Fast frequency demand model &
• Unique • Generation forecasts response operation
Real-time model • Alarm & event management • Fast load shedding • Topology
analyzer
2 operation
• Extreme
weather
functionality
• Advanced performance
& availability calculation
• Monitoring and KPI
• Short and near-term
load forecasts • Load flow
• State
& control calculation estimation

Data operation
1 & automation Meteorological
•
Generation assets

Solar panels •
Flexibility capacity

Load assets
Field devices
of field devices measurement
devices • Wind turbines • Essential loads • Substations
• Storage facilities • Priority loads 1 • Feeders
• Micro turbines • Priority loads 2
• Gensets & marine diesel
• Combined heat & power
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Introducing Power Hub:
core concept and process model

> An IT system run on site or as cloud based service

> Requiring control system integration and robust
communication infrastructure
> Links customers to energy and reserves markets
> Combines physical, financial and contractual
optimisation
> Plans and schedules up to 5 days ahead
> Energy trading and reserves activation within day of
operation

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Enabling new opportunities for generators:

participating in system balancing
Tange Hydro Power Station (3x1MW)
> Decreasing volume of water
> Challenged by cost and competences

> Old revenue stream – Delivering

energy with renewable subsidies
> New revenue stream – Mixed primary 18

regulation and renewable energy

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Enabling new opportunities for generators:
using excess capacity for exports and balancing
Industrial grower Knud Jepsen (5 MW)
> Severe financial pressure on industry
> Complex planning and operation

> Reducing gas consumption and

complying with heat and CO2 demand
> Maximising energy import/export 19
> Reducing OPEX by 7,8%
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Creating new roles for consumers:
optimising cost of energy & providing demand response
TREFOR – Fresh water supply
> Reduce OPEX by 25% due to new legislation

> New pumping regime implemented

> Complying with water demand and
pressure zone requirements
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> Reducing OPEX by 31%
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Creating new roles for consumers:
contributing to system stability and security of supply
Kollafjord Pelagic –processing facility (4200 kW)
> Incentive is security of supply, mitigating risk of
loosing embryonic fish stock, etc.
> Planning and scheduling done by Power Hub
central optimisation engine in CPH
> Activation done locally by RTU's with
embedded Power Hub intelligence
> Faroese utility, SEV, documented at least 4
prevented black outs in 2014 by activating
Power Hub FFDR

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Bringing it together with MicroGrids
Optimising the entire energy system in Faroe Islands

Faroe Island 2012 proj. 2015

SUND
(x5)

District Faroe Islands heat consumption (Forecasted)

heating
Total production 292 GWh (100%) 300 GWh (100%)
STROND
(x3)

- Thermal 181 GWh (62%) 140 GWh (47%)

MYRU
(x1) Faroe Islands power consumption
excl. controllable consumption units (Forecasted)
Production units
Boiler 20XX

EIÐI
- Hydro 100 GWh (34%) 100 Gwh (33%)
(x3) PELAG
(x1)

Controllable consumption units

HEYGA (Forecasted max)
- Wind 11 GWh (4%) 60 GWh (20%)
(x1) Power Grid
HD
(x2)

Total costs 37 M€ N/A

FOSSA
(x2)
TN

2014
Controllable consumption units
(x3) (Forecasted max)

2015
Fuel cost 22 M€ 17 M€ (-5)
RØKT
(x3)
Wind turbines Battery
(Forecasted max)
Oil price (avg.) 480 €/tonne
NES
(x5)

10 year price dev. 500% Emergency

generator

FÚTAK
(x5)

Oil price / GWh 121 t€ 2014

HÚSA
Wind turbines
(x13)

Fuel cost (80% renewables in 2020) 7 M€ (-15)

Curtailment cost (-1% cap. factor) 150 t€ 22 22
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The Faroe Island experience
could be the vision for ...

DSO's, remote communities/villages, large industrials (mining), campus‘, etc.

Market driven setup is the key Holistic approach and modularity

to the versatility is the platform

Create real Respect

Enable stepwise Meet political,
Launch new customer Ensure economic investments
approach – start economic and
services by incentives optimisation of all already made –
small – grow operational
configuration only activating available assets integration is the
steady objectives
demand side key

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Question 2:
What learnings would you like to get
from the Faroe experience?

1. Ways to manage stability

2. Ways to use demand management to balance the mix
3. Ways to optimize the CapEx
4. Ways to use the market to optimize the power system

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