Flexibility in Europe's power sector — An additional requirement or an automatic complement?

By 2050, the European Union aims to reduce greenhouse gases by more than 80%. The EU member states have therefore declared to strongly increase the share of renewable energy sources (RES-E) in the next decades. Given a large deployment of wind and solar capacities, there are two major impacts on electricity systems: First, the electricity system must be flexible enough to cope with the volatile RES-E generation, i.e., ramp up supply or ramp down demand on short notice. Second, sufficient back-up capacities are needed during times with low feed-in from wind and solar capacities. This paper analyzes whether there is a need for additional incentive mechanisms for flexibility in electricity markets with a high share of renewables. For this purpose, we simulate the development of the European electricity markets up to the year 2050 using a linear investment and dispatch optimization model. Flexibility requirements are implemented in the model via ramping constraints and provision of balancing power. We found that an increase in fluctuating renewables has a tremendous impact on the volatility of the residual load and consequently on the flexibility requirements. However, any market design that incentivizes investments in least (total system) cost generation investment does not need additional incentives for flexibility. The main trigger for investing in flexible resources is the achievable full load hours and the need for backup capacity. In a competitive market, the cost-efficient technologies that are most likely to be installed, i.e., gas-fired power plants or flexible CCS plants, provide flexibility as a by-product. Under the condition of system adequacy, flexibility never poses a challenge in a cost-minimal capacity mix. Therefore, any market design incentivizing investments in efficient generation thus provides flexibility as an inevi complement.     

Compressed Air Energy Storage in an Electricity System With Significant Wind Power Generation

In this paper, a stochastic electricity market model is applied to estimate the effects of significant wind power generation on system operation and on economic value of investments in compressed air energy storage (CAES). The model's principle is cost minimization by determining the system costs mainly as a function of available generation and transmission capacities, primary energy prices, plant characteristics, and electricity demand. To obtain appropriate estimates, notably reduced efficiencies at part load, start-up costs, and reserve power requirements are taken into account. The latter are endogenously modeled by applying a probabilistic method. The intermittency of wind is covered by a stochastic recombining tree and the system is considered to adapt on increasing wind integration over time by endogenous modeling of investments in selected thermal power plants and CAES. Results for a German case study indicate that CAES can be economic in the case of large-scale wind power deployment     

The role of energy storage in accessing remote wind resources in the Midwest

Replacing current generation with wind energy would help reduce the emissions associated with fossil fuel electricity generation. However, integrating wind into the electricity grid is not without cost. Wind power output is highly variable and average capacity factors from wind farms are often much lower than conventional generators. Further, the best wind resources with highest capacity factors are often located far away from load centers and accessing them therefore requires transmission investments. Energy storage capacity could be an alternative to some of the required transmission investment, thereby reducing capital costs for accessing remote wind farms. This work focuses on the trade-offs between energy storage and transmission. In a case study of a 200 MW wind farm in North Dakota to deliver power to Illinois, we estimate the size of transmission and energy storage capacity that yields the lowest average cost of generating and delivering electricity ($/MW h) from this farm. We find that transmission costs must be at least $600/MW-km and energy storage must cost at most $100/kW h in order for this application of energy storage to be economical.     

Comparison of flexibility options to improve the value of variable power generation

As the share of variable generation in power systems increases, there is increasing value in more flexible use and generation of electricity. The paper compares the economic value of several flexibility options in a large power system with a large amount of reservoir hydro power. Generation planning models are needed to consider the impact of flexibility options on other investments in a power system. However, generation planning models do not include all the relevant operational details. The approach in the paper combines a generation planning model with a unit commitment and dispatch model. The results demonstrate the value of coupling the heat and power sectors and the value of transmission. Low-cost electricity storage does not appear to be as decisive in the Northern European context with wind power as the main variable generation source. The paper also addresses methodological issues related to the inclusion of operational constraints in generation planning.     

Role of hydrogen in future North European power system in 2060

The Balmorel model has been used to calculate the economic optimal energy system configuration for the Scandinavian countries and Germany in 2060 assuming a nearly 100% coverage of the energy demands in the power, heat and transport sector with renewable energy sources. Different assumptions about the future success of fuel cell technologies have been investigated as well as different electricity and heat demand assumptions. The variability of wind power production was handled by varying the hydropower production and the production on CHP plants using biomass, by power transmission, by varying the heat production in heat pumps and electric heat boilers, and by varying the production of hydrogen in electrolysis plants in combination with hydrogen storage. Investment in hydrogen storage capacity corresponded to 1.2% of annual wind power production in the scenarios without a hydrogen demand from the transport sector, and approximately 4% in the scenarios with a hydrogen demand from the transport sector. Even the scenarios without a demand for hydrogen from the transport sector saw investments in hydrogen storage due to the need for flexibility provided by the ability to store hydrogen. The storage capacities of the electricity storages provided by plug-in hybrid electric vehicles were too small to make hydrogen storage superfluous.     

Does bulk electricity storage assist wind and solar in replacing dispatchable power production?

This paper discusses the impact of bulk electric storage on the production from dispatchable power plants for rising variable renewable electricity shares. Two complementary optimization frameworks are used to represent power systems with a varying degree of complexity. The corresponding models approximate the wholesale electricity market, combined with the rational retirement of dispatchable capacity. Two different generic storage technologies are introduced exogenously to assess their impact on the system.The analysis covers two countries: France, where the power supply's large nuclear share allows for the discussion of storage impact on a single generator type; and Germany, whose diverse power supply structure enables storage interactions with multiple electricity generators. In the most general case, additional storage capacity increases dispatchable power production (e.g. nuclear, coal) for small wind and solar shares, i.e. it compensates the replacement induced by renewable energies. For larger variable renewable electricity volumes, it actively contributes to dispatchable power replacement. In a diverse power system, this results in storage-induced sequential mutual replacements of power generation from different plant types, as wind and solar capacities are increased.This mechanism is strongly dependent on the technical parameters of the storage assets. As a result, the impact of different storage types can have opposite signs under certain circumstances. The influence of CO₂ emission prices, wind and solar profile shapes, and power plant ramping costs is discussed.     

Network investments and the integration of distributed generation: Regulatory recommendations for the Dutch electricity industry

An increase in the distributed generation of electricity necessitates investments in the distribution network. The current tariff regulation in the Dutch electricity industry, with its ex post evaluation of the efficiency of investments, average benchmarking and a frontier shift in the x-factor, delays these investments. In the unbundled electricity industry, the investments in the network need to be coordinated with those in the distributed generation of electricity to enable the system operators to build enough network capacity. The current Dutch regulations do not provide for a sufficient information exchange between the generators and the system operators to coordinate the investments. This paper analyses these two effects of the Dutch regulations, and suggests improvements to the regulation of the network connection and transportation tariffs to allow for sufficient network capacity and coordination between the investments in the network and in the generation of electricity. These improvements include locally differentiated tariffs that increase with an increasing concentration of distributed generation.     

If you build it,he will come: Anticipative power transmission planning

Like in the film Field of Dreams, the sentence “if you build it, he will come” also applies in power systems. In this sense, if a transmission planner suggests building some lines in anticipation of generation capacity investments, then it can induce generation companies to invest in a more socially efficient manner. In this paper, we solve for the optimal way of doing this anticipative power transmission planning. Inspired in the proactive transmission planning model proposed by Sauma and Oren (2006) we formulate a mixed integer linear programming optimization model that integrates transmission planning, generation investment, and market operation decisions and propose a methodology to solve for the optimal transmission expansion. Contrary to the proactive methodology proposed by Sauma and Oren (2006), our model solves the optimal transmission expansion problem anticipating both generation investment and market clearing. We use the marginalist theory with production cost functions inversely related to the installed capacity in a perfectly competitive electricity market and we find all possible generation expansion pure Nash equilibria. We illustrate our results using 3-node and 4-node examples.     

Optimal asset allocation of wind energy units in conjunction with demand response for a large‐scale electric grid

Demand response is considered to be a realistic and comparatively inexpensive solution aimed at increasing the penetration of renewable generations into the bulk electricity systems. The work in this paper highlights the demand response in conjunction with the optimal capacity of installed wind energy resources allocation. Authors proposed a total annual system cost model to minimize the cost of allocating wind power generating assets. This model contains capacity expansion, production, uncertainty, wind variability, emissions, and elasticity in demand to find out cost per hour to deliver electricity. A large‐scale electric grid (25 GW) is used to apply this model. Authors discovered that demand response based on interhourly system is not as much helpful as demand response grounded on intrahourly system. According to results, 32% wind generation share will provide the least cost. It is also worth noting that optimal amount of wind generation is much sensitive to installation cost as well as carbon tax.     

Wind to power a new city in Oman

This paper proposes the use of wind power as a source of electricity in a new city being developed in the Duqm area of Oman. Recent wind speed measurements taken at the Duqm metrological station are analyzed to obtain the annual and monthly wind probability distribution profiles represented by Weibull parameters. The monthly average mean wind speed ranges between 2.93 m/s in February and 9.76 m/s in July, with an annual average of 5.33 m/s.A techno-economic evaluation of a wind power project is presented to illustrate the project's viability. Given Duqm's wind profile and the power curve characteristics of a V90-1.8 turbine, an annual capacity factor of 0.36 is expected. For the base-case assumptions, the cost of electricity is about $0.05 and $0.08 per kWh for discount rates of 5% and 10%, respectively. These values are higher than that of the existing generation system, due to the subsidized prices of domestically available natural gas. However, given high international natural gas prices, the country's long-term LNG export obligations, and the expansion of natural gas-based industries, investments in wind power in Duqm can be justified. A feed-in tariff and capital cost allowance policies are recommended to facilitate investments in this sector.     

Sustainable electricity generation fuel mix analysis using an integration of multicriteria decision-making and system dynamic approach

To achieve a national energy access target of 90% urban and 51% rural by 2035, combat climate change, and diversify the energy sector in the country, the Zambian government is planning to integrate other renewable energy resources (RESs) such as wind, solar, biomass, and geothermal into the existing hydro generation–based power system. However, to achieve such targets, it is essential for the government to identify suitable combination of the RESs (electricity generation fuel mix) that can provide the greatest sustainability benefit to the country. In this paper, a multicriteria decision-making framework based on analytic hierarchy process and system dynamics techniques is proposed to evaluate and identify the best electricity generation fuel mix for Zambia. The renewable energy generation technologies considered include wind, solar photovoltaic, biomass, and hydropower. The criteria used are categorized as technical, economic, environmental, social, and political. The proposed approach was applied to rank the electricity generation fuel mix based on nine sustainability aspects: land use, CO₂ emissions, job creation, policy promotion affordability, subsidy cost, air pollution reduction, RES electricity production, RES cumulative capacity, and RES initial capital cost. The results indicate that based on availability of RESs and sustainability aspects, in overall, the best future electricity generation mix option for Zambia is scenario with higher hydropower (40%) penetration, wind (30%), solar (20%), and lower biomass (10%) penetration in the overall electricity generation fuel mix, which is mainly due to environmental issues and availability of primary energy resources. The results further indicate that solar ranks first in most of the scenarios even after the penetration weights of RES are adjusted in the sensitivity analysis. The wind was ranked second in most of the scenarios followed by hydropower and last was biomass. These developed electricity generation fuel mix pathways would enable the country meeting the future electricity generation needs target at minimized environmental and social impacts by 2035. Therefore, this study is essential to assist in policy and decision making including planning at strategic level for sustainable energy diversification.     

Utility-scale wind on islands: an economic feasibility study of Ilio Point, Hawai’i

The opportunity now exists for the development of a utility-scale wind farm in Hawai’i. A combination of factors leads to the conclusion that wind-generated electricity has a sizeable cost advantage over Hawai’i’s traditional petroleum fueled generation.In 1995, Global Energy Concepts (GEC) conducted feasibility studies of potential wind energy projects throughout Hawai’i. The study included a site on the island of Moloka’i near Ilio Point. However, GEC classified the location as unfeasible due to relatively low Moloka’i electricity demand and the lack of interisland transmission capability.Four factors have changed since the GEC study. The cost of petroleum has risen dramatically, the cost of capital has decreased, wind power technology has improved greatly and Hawai’i has adopted a renewable portfolio standard. These economic and technical changes now make it feasible to construct a utility-scale wind farm on Moloka’i and export the energy to the neighboring island of O’ahu via a new undersea transmission system.Detailed financial analysis results in an estimated project cost of $291 million for a 180 MW wind farm and related transmission infrastructure. The net cost of energy delivered to the O’ahu grid is 3.22 cents/kWh, a 34% savings compared to the cost of present petroleum fueled generation.This study reveals that it is prudent to pursue high-level industry and government debate regarding the feasibility of constructing the Ilio Point wind farm. High electricity rates act as a competitive disadvantage to businesses in Hawai’i compared to mainland-based firms. The energy industry in Hawai’i is a valuable partner in making the state more competitive in the high tech economy of the 21st century. The Ilio Point project is a key initiative in this partnership.     

Planning India's long-term energy shipment infrastructures for electricity and coal

The Purdue Long-Term Electricity Trading and Capacity Expansion Planning Model simultaneously optimizes both transmission and generation capacity expansions. Most commercial electricity system planning software is limited to only transmission planning. An application of the model to India's national power grid, for 2008–2028, indicates substantial transmission expansion is the cost-effective means of meeting the needs of the nation's growing economy. An electricity demand growth rate of 4% over the 20-year planning horizon requires more than a 50% increase in the Government's forecasted transmission capacity expansion, and 8% demand growth requires more than a six-fold increase in the planned transmission capacity expansion. The model minimizes the long-term expansion costs (operational and capital) for the nation's five existing regional power grids and suggests the need for large increases in load-carrying capability between them. Changes in coal policy affect both the location of new thermal power plants and the optimal pattern inter-regional transmission expansions.     

Evaluating interconnector investments in the north European electricity system considering fluctuating wind power penetration

With increasing amounts of power generation from intermittent sources like wind, transmission planning has not only to account for the expected load curve but also for the stochasticity of volatile power infeeds. Moreover investments in power generation are no longer centrally planned in deregulated power markets but rather decided on competitive grounds by individual power companies. This poses particular challenges when it comes to evaluating the benefits of increased interconnection capacities in large-scale systems like the European transmission system.Within this article an approach is presented which allows assessing the benefits of interconnector investments in the presence of stochastic power infeed and endogenous power plant investments. This model uses typical days and hours as well as recombining trees to represent both load and infeed fluctuations. An application is presented covering 30 European countries and simultaneously optimizing generation investments and dispatch as well as utilization of transmission lines. The model is used to evaluate the benefits of further line extensions between the European mainland and northern European countries. We compute welfare gains and the distribution of these gains within a business as usual scenario up to 2030.     

Bridging the scales: A conceptual model for coordinated expansion of renewable power generation,transmission and storage

To analyze the challenge of large-scale integration of renewables during the next decades, we present a conceptual power system model that bridges the gap between long term investment allocation and short-term system operation decisions. It integrates dynamic investments in generation, transmission and storage capacities as well as short-term variability and spatial distribution of supply and demand in a single intertemporal optimization framework. Large-scale grid topology, power flow distributions and storage requirements are determined endogenously. Results obtained with a three region model application indicate that adequate and timely investments in transmission and storage capacities are of great importance. Delaying these investments, which are less costly than investments in generation capacities, leads to system-wide indirect effects, such as non-optimal siting of renewable generation capacities, decreasing generation shares of renewables, increasing residual emissions and hence higher overall costs.     

Environmental and utility planning implications of electricity loss reduction in a developing country: a comparative study of technical options

This paper discusses the environmental and utility planning implications of load (i.e. ‘variable’) and non-load (i.e. ‘core’) loss reduction options in the case of a mixed hydro-thermal power system from a long-term electricity generation expansion planning perspective. A key finding of the study is that a reduction of electricity losses in transmission and distribution need not always reduce emissions of air pollutants; and that neither loss reduction option is consistently superior over time from the environmental perspective. For a given level of loss reduction, long-run average cost of electricity generation with the variable loss reduction option generation was found to be less than that with the core loss reduction option. © 1998 John Wiley & Sons, Ltd.     

Comparative impacts of wind and photovoltaic generation on energy storage for small islanded electricity systems

This paper addresses the annual energy storage requirements of small islanded electricity systems with wind and photovoltaic (PV) generation, using hourly demand and resource data for a range of locations in New Zealand. Normalised storage capacities with respect to annual demand for six locations with winter-peaking demand profiles were lower for wind generation than for PV generation, with an average PV:wind storage ratio of 1.768:1. For two summer-peaking demand profiles, normalised storage capacities were lower for PV generation, with storage ratios of 0.613:1 and 0.455:1. When the sensitivity of storage was modelled for winter-peaking demand profiles, average storage ratios were reduced. Hybrid wind/PV systems had lower storage capacity requirements than for wind generation alone for two locations. Peak power for storage charging was generally greater with PV generation than with wind generation, and peak charging power increased for the hybrid systems. The results are compared with those for country-scale electricity systems, and measures for minimising storage capacity are discussed. It is proposed that modelling of storage capacity requirements should be included in the design process at the earliest possible stage, and that new policy settings may be required to facilitate a transition to energy storage in fully renewable electricity systems.     

Short-term optimal wind power generation capacity in liberalized electricity markets

Mainly because of environmental concerns and fuel price uncertainties, considerable amounts of wind-based generation capacity are being added to some deregulated power systems. The rapid wind development registered in some countries has essentially been driven by strong subsidizing programs. Since wind investments are commonly isolated from market signals, installed wind capacity can be higher than optimal, leading to distortions of the power prices with a consequent loss of social welfare. In this work, the influence of wind generation on power prices in the framework of a liberalized electricity market has been assessed by means of stochastic simulation techniques. The developed methodology allows investigating the maximal wind capacity that would be profitably deployed if wind investments were subject to market conditions only. For this purpose, stochastic variables determining power prices are accurately modeled. A test system resembling the size and characteristics of the German power system has been selected for this study. The expected value of the optimal, short-term wind capacity is evaluated for a considerable number of random realizations of power prices. The impact of dispersing the wind capacity over statistical independent wind sites has also been evaluated. The simulation results reveal that fuel prices, installation and financing costs of wind investments are very influential parameters on the maximal wind capacity that might be accommodated in a market-based manner.     

Spatial variation of emissions impacts due to renewable energy siting decisions in the Western U.S. under high-renewable penetration scenarios

One of the policy goals motivating programs to increase renewable energy investment is that renewable electric generation will help reduce emissions of CO₂ as well as emissions of conventional pollutants (e.g., SO₂ and NO_x). As a policy instrument, Renewable Portfolio Standards (RPS) encourage investments in wind, solar and other generation sources with the goal of reducing air emissions from electricity production. Increased electricity production from wind turbines is expected to displace electricity production from fossil-fired plants, thus reducing overall system emissions. We analyze the emissions impacts of incremental investments in utility-scale wind power, on the order of 1 GW beyond RPS goals, in the Western United States using a utility-scale generation dispatch model that incorporates the impacts of transmission constraints. We find that wind investment in some locations leads to slight increases in overall emissions of CO₂, SO₂ and NO_x. The location of wind farms influences the environmental impact by changing the utilization of transmission assets, which affects the overall utilization of power generation sources and thus system-level emissions. Our results suggest that renewable energy policy beyond RPS targets should be carefully crafted to ensure consistency with environmental goals.     

A hybrid model for the optimum integration of renewable technologies in power generation systems

The main purpose of this work is to assess the unavoidable increase in the cost of electricity of a generation system by the integration of the necessary renewable energy sources for power generation (RES-E) technologies in order for the European Union Member States to achieve their national RES energy target. The optimization model developed uses a genetic algorithm (GA) technique for the calculation of both the additional cost of electricity due to the penetration of RES-E technologies as well as the required RES-E levy in the electricity bills in order to fund this RES-E penetration. Also, the procedure enables the estimation of the optimum feed-in-tariff to be offered to future RES-E systems. Also, the overall cost increase in the electricity sector for the promotion of RES-E technologies, for the period 2010–2020, is analyzed taking into account factors, such as, the fuel avoidance cost, the carbon dioxide emissions avoidance cost, the conventional power system increased operation cost, etc. The overall results indicate that in the case of RES-E investments with internal rate of return (IRR) of 10% the cost of integration is higher, compared to RES-E investments with no profit, (i.e., IRR at 0%) by 0.3–0.5 €c/kWh (in real prices), depending on the RES-E penetration level.