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Ancillary services costs in Sweden

illustration of ancillary services

We have been assigned by the Danish company Hybrid Greentech to develop a long-term forecast of ancillary services costs in Sweden. The forecast spans until 2050. At present, the electrification drive is inevitably leading to a surge in power demand. Consequently, a fundamental reconfiguration of our energy infrastructure is taking place. It must incorporate both intermittent renewables, flexible electricity demand, and the provision of ancillary services. 

So far, ancillary services have often been the unsung heroes of the power sector as these essential support systems ensure grid reliability. To make the forecast, we integrated and updated previous investigations into power production and demand. 

Potential innovative technologies

We took into consideration the production of green hydrogen in the Nordics. The flexibility of hydrogen production in the Nordics could be an important factor in the ancillary services market since a reduction of this production would most likely result in wider use of battery technologies. 

Potential innovative technologies could also have a high impact on the market for ancillary services. For example, the increasing number of electric vehicles means a large increase in power consumption. This increase, if managed flexibly, could potentially contain a total battery capacity of 250 GWh with a charging capacity of 50 GW. Such a capacity could support all the balancing requirements in all of Sweden if the potential is fully utilized. 

Electricity prices 

A long-term forecast of electricity production, consumption, and prices in Sweden was part of the analysis. In general, from 2020 to 2030 Sweden is expected to be a net exporter of electricity and from 2035 and onwards to be a net importer. Concerning consumption, an increase of about 80% in consumption from industry from 2020 to 2050 is expected. 

According to modelling results, the present price difference between the two Northern and the two Southern regions will decrease over time. 

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Modelling

We based our forecast of ancillary services costs on a qualitative assessment of research projects made by EML, assessing ancillary services markets in the TIMES models and other international research studies on the topic.

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Analysis

We analyzed future power demand, the flexibility of electricity-demanding technologies in the power spot market, and the development of renewable intermittent technologies based on the integrated assessment model TIMES-NEU, a comprehensive energy system model covering the entire Northern European energy system. 

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Results 

All results and calculations were presented in a comprehensive report to Hybrid Greentech. 

Duration: September 2023 

EML-Team: Mikkel Bosack Simonsen, Julius Lindberg Steensberg,  Kenneth Karlsson and Ida Græsted Jensen

Client: Hybrid Greentech 

Reference: Anton Osadchi

Models: TIMES-NEU and TIMES-DK 

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Early Action on Energy Efficiency

Energy Modelling Lab has contributed to the background study “The Value of Early Action on Energy Efficiency”. The study is focusing on buildings and industries. We identified key energy efficiency messages that we presented at the IEA Energy Efficiency Conference 2022 (see full presentation below). The conference took place in the Danish city of Sonderborg.

In collaboration with our partners, we examined the importance of early action on energy efficiency. We considered the costs of delayed progress. Furthermore, we looked into the benefits of achieving energy efficiency milestones on the way to reaching net zero emissions by 2050. The study was contracted by the International Energy Agency and financed by Danfoss.

Key findings on early action

Early action matters. A low energy efficiency pathway would increase final energy consumption by 39%. CO2 emissions increase by 16% if action is delayed by 10 years.

Energy efficiency is the most effective measure to quickly improve energy security and lower electricity prices.

Reduced air pollution in a global net zero emissions scenario can reduce the cost of global health impacts by almost €500 bn in 2030.

Water heaters provide the biggest shifting potential and thereby CO2 emission reductions. Due to high savings and load-shifting potential, water heaters should be one of the first products to be digitized.

In process industries maintenance and simple upgrade of process plants can save 5 to 10% with very short payback time.

The use of electromagnetic sources for process heat is in an early stage but holds promising potential for saving energy with a factor of 10 or more.

We used the IEA’s Net Zero Emissions by 2050 Scenario as a central focus and reference case for the analysis. Correspondingly, we focused on the implications and impacts of action within this decade, in all major energy-using regions globally.

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Scenario analyses

We analyzed scenarios of low energy efficiency and high energy efficiency and estimated the accumulated final energy consumption, CO2 emissions, and air pollution.

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Results

We presented the key findings at the International Energy Agency (IEA) Energy Efficiency Conference 2022 in the Danish city of Sønderborg.

Presentation IEA Energy Efficiency Conference 2022Download

Duration: January-April 2022

Client: International Energy Agency (IEA) and Danfoss

Budget: DKK 596,000

Partners: Energiforsk, Viegand Maagøe

Reference: Markus Wråke, CEO, Energiforsk

EML team: Kenneth Karlsson and Ida Græsted Jensen

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Analysis of future energy market

Mix of solar parks and wind parks to produce green hydrogen
Mix of green energy production from sun and wind used for producing hydrogen

Energy Modelling Lab has made an analysis of the future energy market in Northern Europe that will develop under the green transition. The analysis was an assignment from COWI. It has been used as a reference in the report Roadmap to a Future, Danish hydrogen infrastructure, published by the CIP Foundation in May 2023.

The analysis focuses on Denmark, Norway, Sweden, Germany, Poland, Holland, Belgium, and UK. It probes the potential future markets of energy and fuels including PtX fuels from now on and until 2050.

Based on data from the Danish Energy Agency, the Danish production of electricity is expected to increase by almost 900 % by 2050. The increase is primarily due to offshore wind parks. It’s assumed that the offshore wind parks will be established in connection with planned “energy islands”; two to three in the North Sea and one in the Baltic Sea. Also, there are plans to establish electrolysis facilities and we assume they will be established on the energy islands.

Domestic demand

Domestic electricity demand is expected to remain almost constant due to energy-saving measures. But the overall expected increase could be about sevenfold from now on and until 2050, due to the planned expansion of PtX facilities. The bulk of the potential electricity production would thus be used for the production of green hydrogen for export. Denmark could potentially produce one-third of the total green hydrogen produced in the area, that our analysis covers.

The demand for hydrogen in Northern Europe is estimated to grow dramatically. According to the prognosis in the analysis, Holland, Belgium, and Germany will be the main purchasers. The estimated value of the potential, Danish green hydrogen export is 100 billion DKK pr. year.

Germany or Sweden

The prognosis is based on the assumption, that Germany’s capacity for hydrogen production will remain rather limited. This assumption relies on calculations showing that Danish offshore wind parks will produce slightly cheaper electricity than German facilities. Meanwhile, the likelihood that Germany will establish a large-scale production remains high.

An alternative scenario not included in the published analysis showed that Sweden could become the main purchaser of Danish-produced hydrogen by 2050. This is mainly due to estimates showing that production costs in Sweden are higher than in Denmark.

Energy Modelling Labs has updated the TIMES energy system model for the analysis. We developed it further to cover Northern Europe which resulted in developing the TIMES-NEU. The TIMES model is internationally recognized and developed by an IEA working group.

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MODELLING

Energy Modelling Lab has updated the Open Nordic TIMES model (ON-TIMES) and developed it further to the Northern Europe TIMES model (TIMES-NEU).

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SCENARIO ANALYSIS

Energy Modelling Lab has probed on the future energy market that will develop under the Green Deal on climate neutrality by 2050.

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RESULTS

Results and scenarios are collected in the report mentioned above.

Duration: 2022-2023

EML Team: Kenneth Karlsson, Ida Græsted Jensen and Andrea Marin Radoszynski

Client: COWI

Budget: DKK 450,00

Reference: Claus C. Rebien, Vice President, Cowi

Collaborators: Brinckmann

Model: TIMES-NEU

Report: Baggrundsnotat – Analyse af efterspørgsel efter PtX produkter

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Viet Nam to reach net-zero emissions

Viet Nam is making headways in planning for the energy sector and is heading to reach net-zero emissions in 2050. Viet Nam Energy Outlook Report 2021  examined possible pathways for the development of the energy sector, and it featured a trajectory to reach this target for the first time.

One major finding was that a sustainable energy system will enable self-sufficiency. Another is that wind and solar energy are cheaper long-term solutions than coal and gas. At present, coal is the leading source of power.

Energy Modelling Lab is developing the scenarios that will be used in a new energy-system model for the Energy Outlook Report 2023. The model makes it possible for decision-makers and energy and power planners to identify the most cost-effective and feasible pathways to achieve a sustainable green transition.

Building DK-BioRes

MODELLING

The first step is to meet with our Vietnamese partners and agree on the questions to address, relevant analyses to undertake, and scenarios to design.

Energy Modelling Lab then redesigns and updates the modelling framework. We strengthen the representation of new decarbonization technologies and integrate relevant constraints.

SCENARIO ANALYSIS

The core scenarios focus on the realization of the net-zero target. They allow for a comprehensive investigation of optimal solutions. The results are then reflected in recommendations for policymaking.

The process fosters a wide consensus and understanding of Viet Nam’s energy challenges and opportunities in the mid-to long term.

REPORT

The Viet Nam Energy Outlook Report 2023 identifies the cost-optimized solutions that support Viet Nam’s energy system to become sustainable.

The Report allows for decision-makers to explore the system-wide implications of fulfilling targets by 2050. It also shows how Viet Nam can contribute to fulfilling the Paris Agreement on climate change.

Duration: March- December 2023

EML Team: Kenneth Karlsson, Ida Græsted Jensen &Till ben Brahim

Client: Danish Energy Agency 

Total budget: DKK 572.288

Reference: Giada Venturini, Danish Energy Agency

Collaborators: Electricity and Renewable Energy Authority (EREA, Vietnam), Hanoi University of Science and Technology, and E4SMA

Model: TIMES-VNM

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Enhancing energy planning in Viet Nam

Energy Modelling Lab is enhancing energy planning in Viet Nam

Viet Nam is a regional manufactural hub and one of the most dynamic countries in East Asia, with the GDP annual growth rate averaging 6.2 per cent from 2000 until 2023. According to the analysis in the Viet Nam Energy Outlook Report 2021, electricity consumption will more than double in 2050 compared to 2020.

Viet Nam has pledged to reach the target of net-zero emissions by 2050. This means that the power system must meet more than 70 per cent of the total final energy demand with renewable energy-based electricity.

Energy Modelling Lab supports the endeavours to enhance energy planning in Viet Nam. We assist the Vietnamese authorities by building up their planning capacities concerning scenario-based, long-term modelling of the Vietnamese energy system. To this end, we are integrating an updated technology catalogue in the present energy system model and have included electricity storage solutions, P2X, nuclear technologies, optimal use of biomass, and carbon capture and storage.

Building DK-BioRes

MODELLING

Energy Modelling Lab updates the technology catalogue that is integrated into the present energy system model.

The catalogue includes decarbonisation technologies that are not yet being used and describes costs and relevant technical parameters.

ANALYSIS

The catalogue contributes to fostering data-driven discussions and understanding of the potential of decarbonization technologies.

The expected outcome of this process is a broader consensus on the potential.

RESULTS

The results will be integrated into the existing energy system model and can create first insights into cost-optimal applications of these technologies.

The results will contribute to making the Viet Nam Energy Outlook Report 2023 more comprehensive and enable decision-making on investments.

Duration: November 2022 – August 2023

EML Team: Kenneth Karlsson, Ida Græsted Jensen &Till ben Brahim

Client: UNOPS

Budget: DKK 93.438

Reference: Maurizio Gargiulo, Director of E4SMA

Collaborators: Electricity and Renewable Energy Authority (EREA, Vietnam), Danish Energy Agency (DEA) and E4SMA

Model: TIMES-VNM

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Net-zero emissions in Kuwait

Energy Modelling Lab helps reaching net-zero emissions in Kuwait

Kuwait is becoming one of the hottest countries on the planet and faces profound social and ecological challenges from continued global warming and the global transition away from fossil fuels. The government has pledged to reach net-zero emissions in the oil and gas sector by 2050 and by 2060 for the whole country.

At present, oil accounts for 90 % of the national revenue and more than half of GDP and renewable energy for less than 1 % of demand. Kuwait thus needs clever and comprehensive solutions. With abundant wind and solar resources, the potential is at hand.

Energy Modelling Lab supports steps to reach net-zero emissions in Kuwait by 2060. We are developing an energy modelling framework that allows us to identify the least-cost and most feasible green energy systems. Based on these results we are able to designate pathways to integrate the new solutions across five key sectors: Energy, Industry, Agriculture, Land-Use, and Waste.

Building DK-BioRes

MODELLING

Energy Modelling Lab develops a database for energy and GHG emissions, build consensus on ambitions, and shortlist decarbonization options.

We develop an energy model featuring different scenarios including rapid expansion of the renewable fuel market and reduced exports.

SCENARIO ANALYSIS

Analyzing the different scenarios allows for informed decision-making on the optimal solutions integrated across sectors.

Socioeconomic and environmental impacts and co-benefits such as improved health are identified and considered.

RESULTS

Results are presented in a website format with open access and all key results are shared in Excel sheets.

Users can move between scenarios and study results like emissions and energy consumption by sector and costs.

Duration: August 2022 – June 2024

External experts from EML : Mikkel Bosack Simonsen and Ida Græsted Jensen

Client: UNEP

Total budget: USD 64.920

Reference: Sarah Carmen Fiedler, associate expert, UNEP

Collaborators: SDA Sustainable Development Advisors

Model: TIMES

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Low emission strategy in Jordan

Solar energy in Jordan. Energy Modelling Lab is assisting to develop a low emission strategy for Jordan.

Jordan is considered to be among the world’s most vulnerable to drought as a result of climate change. Major challenges are aridity, water scarcity, heavy reliance on fossil energy imports and rapid growth in population and urbanization.

The government is now addressing the need for a transition to a greener and more resilient economy. One important step is developing a National Long-Term Low Emission Strategy and Options Report 2050.

Energy Modelling Lab is contributing to developing a low-emission strategy in Jordan. We are creating a central modelling framework representing eight key sectors and their interconnections. By embedding baseline scenarios, we can estimate the impact of different options for decarbonization. We then create a shortlist of the least cost and most feasible options and are able to designate the optimal pathways.

Building DK-BioRes

MODELLING
Energy Modelling Lab shortlists decarbonization options, identifies cross-sector synergies and develops an integrated model.

The model includes a full investment catalogue for the entire energy sector and shows the economically optimal pathways through the jungle of technological solutions.

SCENARIO ANALYSIS
Through a series of scenarios, we can investigate the consequences of different climate scenarios and consider prioritized mitigation actions.

We also identify and consider socioeconomic and environmental impacts and co-benefits such as improved health and energy savings.

REPORT
The final report proposes optimal decarbonization pathways and provides policy recommendations that are validated through workshops with key stakeholders.

The Jordanian Government will have a solid basis for a continuously informed decision process as we will build up local partner capacity to use and update the model.

Duration: August 2022 – June 2024

EML Team: Kenneth Karlsson, Mikkel Bosack Simonsen, Ida Græsted Jensen 

Client: The World Bank

Budget: DKK 679,250

Reference: Karsten Holm, Danish Energy Management

Collaborators: Danish Energy Management (DEM) and the Water, Energy and Environment

Center (WEEC) of the University of Jordan

Model: TIMES-JO

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Net zero by 2050 in Vietnam

The Vietnamese economy is growing, and so is the demand for energy. As the country moves forward new investments in clean energy and infrastructure are highly needed. Energy Modelling Lab has developed scenarios to reach the target of net zero by 2050 in Vietnam.

The power generation and storage capacity should be 30 times higher than the current capacity.

Electricity should primarily come from solar power combined with batteries.

Power transmission should be increased by 40% compared to the present capacity.

The Vietnamese economy and energy consumption is growing.

Download the Energy Outlook Report 2021 for Vietnam

The report is written by the Electricity and Renewable Energy Authority in Vietnam (EREA) along with the Danish Energy Agency. Energy Modelling Lab has contributed to both the analysis and the report.

Vietnam Energy Outlook Report 2021Download

Duration: 2020 – 2022

EML Team: Ida Græsted Jensen, Till ben Brahim and Kenneth Karlsson

Client: This project is part of the Framework contracts with Global Cooperation at the Danish Energy Agency

Budget: DKK 410,373

Reference: Ole Emmik Søresen, Head of Divison Corporation the Danish Energy Agency

Collaborators: Ea Energy Analyses, Institute of Energy, E4SMA, Aarhus University

Model: TIMES

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The role of fossil gas in the Nordics

We participated in a research project exploring the role of fossil gas in the Nordics. The challenge of reducing the dependency on fossil gas differs between the Nordic countries. Therefore each country has its own set of challenges to solve.

Norway exports while Sweden and Finland import gas

Denmark is connected to central Europe and receives the gas mix in the grid from both Russia and Norway. (The Danish gas production is temporarily low due to maintenance of the Tyra Field).

Finland gets gas directly from Russia and through Estonia.

Norway exports a large amount of gas mainly to central Europe and partly to the Danish grid.

Sweden gets gas from the European grid through Denmark.

The import and export of fossil gas in the Nordic countries (2020). Source: Eurostat
Fossil gas use differs between the nordic countries

In Denmark around 350,000 buildings are heated by gas, and switching to district heating or heat pumps is a major task in the years to come.

Finland primarily uses gas for electricity and heat production and industry, especially pulp and paper and iron, and steel production consumes large amounts of gas. Switching to green energy sources in these processes is the primary task for Finland.

Norway does not have a high domestic gas use in the society as such, but fossil fuel extraction uses a large amount of gas today. Electrification of energy production can reduce fossil gas consumption substantially.

Sweden mainly uses gas for non-energy purposes such as fertilizer and plastics, but also for process heat in iron and steel production, chemical industry, and pulp and paper production.

The use of fossil gas differs between the Nordic countries. Source: Eurostat

If you want to dive into more details on the role of fossil gas in the Nordic countries, you can find the full analysis here. The analysis is made in collaboration with IVL and Energiforsk.

The role of fossil gas in the NordicsDownload

Duration: 2022

EML team: Kenneth Karlsson

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Climate neutral agriculture in Denmark

The Danish agricultural sector is facing the green transition and many ideas have been proposed to reach climate-neutral agriculture in Denmark by 2050. In this brief, we suggest two pathways to climate neutrality to follow the general goals of a 70% reduction in 2030 and a 100% reduction in 2050.

70% greenhouse gas reduction by 2030

100% greenhouse gas neutral by 2050

No animal feed import by 2050

Technology-optimistic or technology-independent

The first scenario is a technology-optimistic scenario, while the second scenario to a larger extent can reach the goals without technological development. In both scenarios, a large increase in the forest areas is necessary such that the forest area in 2050 is approximately double the area of today.

In the technology-optimistic scenario, the amount of farm animals can be kept at the same level as today because the biogas and pyrolysis plants can reduce part of the emissions and the forests compensate for the rest of the emissions. In the technology-independent scenario, it is necessary to reduce the amount of farm animals to reach the climate targets.

Key figures

FOREST
1.000.000 ha, roughly 23% of the Danish land mass, must be covered in forest by 2050.

The forestation should happen sooner rather than later so 160.000 – 200.000 ha should be converted into forest already by 2030.

LOW LAND AREAS
100.000 ha of carbon-rich lowland soil should be converted into natural areas by 2030.

All 178.700 ha low land soil must be converted into nature by 2050.

ANIMALS
In a technology-optimistic scenario, with a sharp increase in forest area, animal production can remain the same size as today.

In a technology-independent scenario a 15% reduction in animal production by 2030, and a 30% reduction in 2050 relative to today is necessary.

If the steep forest area does not happen, a further reduction in animal production is necessary.

Read the full analysis

Klimaneutralt dansk landbrug (2021)Download

The model is open-sourced

Make scenarios yourself. Download the full model used for the brief from our GitHub repository.

Duration: 2021

EML-Team: Kenneth Karlsson and Ida Græsted