Hydrogen storage for mixed wind–nuclear power plants in the context of a Hydrogen Economy

A novel methodology for the economic evaluation of hydrogen production and storage for a mixed wind–nuclear power plant considering some new aspects such as residual heat and oxygen utilization is applied in this work. This analysis is completed in the context of a Hydrogen Economy and competitive electricity markets. The simulation of the operation of a combined nuclear–wind–hydrogen system is discussed first, where the selling and buying of electricity, the selling of excess hydrogen and oxygen, and the selling of heat are optimized to maximize profit to the energy producer. The simulation is performed in two phases: in a pre-dispatch phase, the system model is optimized to obtain optimal hydrogen charge levels for the given operational horizons. In the second phase, a real-time dispatch is carried out on an hourly basis to optimize the operation of the system as to maximize profits, following the hydrogen storage levels of the pre-dispatch phase. Based on the operation planning and dispatch results, an economic evaluation is performed to determine the feasibility of the proposed scheme for investment purposes; this evaluation is based on calculations of modified internal rates of return and net present values for a realistic scenario. The results of the present studies demonstrate the feasibility of a hydrogen storage and production system with oxygen and heat utilization for existent nuclear and wind power generation facilities.     

Electricity market participation of wind farms: the success story of the Spanish pragmatism

In the last 10 years, more than 15 GW of wind power (Asociación Empresarial Eólica (Spanish Wind Energy Association), Nota de prensa (Press release) 17 de enero de 2008. http://www.aeeolica.org/doc/NP_080117_Espana_supera_los_15000_MW_eolicos.pdf) have been installed in Spain, of which more than 3.5 GW in 2007. Furthermore, plans are to reach 20 GW by 2010 and there are expectations of an installed capacity exceeding 40 GW by 2020. This article will present the innovative solutions for technical and economical integration that allow to reach such high level wind penetration objectives (the system peaks at around 44 GW and is almost isolated). It will be described how the regulation has evolved from a pure Feed-in-Tariff to a market+premium option, where technical and economic integration has been a priority. Today, approximately 97% of installed wind capacity accesses the Spanish wholesale electricity market. Market integration has been crucial, sending the correct signals to participants to look for the optimum technical solutions. Technical improvements have come from both wind power producers (fault-ride-through capabilities, visibility and controllability of wind power, power production forecasting, reactive power control) and the system operator (specific control centre dedicated to Renewable Energy Sources (RES), new security analysis tools, gaining technical confidence of wind capabilities).     

Risk-averse based optimal operational strategy of grid-connected photovoltaic/wind/battery/diesel hybrid energy system in the electricity/hydrogen markets

The techno-economic advantages of grid-connected hybrid energy system (HES) exploit synergies to improve reliability and economic efficiency while maintaining grid stability. Therefore, this paper proposes a risk-averse optimal operational strategy of grid-connected photovoltaic/wind/battery/diesel HES to participate into two energy markets including electricity and hydrogen markets. The grid company can flexibly trade power into two markets to maximally achieve profits based on price arbitrage. The risk influences of the uncertainties, i.e., photovoltaic/wind generation, and electricity prices on the expected revenue are evaluated with CVaR model. For a better exhibition of seasonal variability effects on HES optimal operation strategy, two typical Spring/Summer days are chosen. The proposed risk-averse optimal operational strategy is formulated as a two-stage mixed-integer linear programming (MILP) model. The results in a Spring day simulation under non-risk situation indicate that the overall expected revenue can be improved 2.74 times larger if considering hydrogen market. Moreover, the optimal operational strategy of hydrogen production is considerably affected by unpredictable wind farm. Sensitivity analysis also validates that the changes of PV/WT curtailment penalty have a profound influence than battery degradation coefficient on the HES expected revenue.     

Wind power investment within a market environment

Within an existing transmission network, this paper considers the problem of identifying the wind power plants to be built by a wind power investor to maximize its profit. For this analysis a future target year is considered and the loads at different buses are represented by stepwise load–duration curves. The stochastic nature of both load and wind is represented via scenarios. The considered electric energy system operates under a pool-market arrangement and each producer/consumer is paid/pays the Local Marginal Price (LMP) of the bus at which it is located. The higher the wind penetration is, the lower the resulting LMPs. To tackle this problem a stochastic bilevel model is proposed, whose upper-level represents the wind investment and operation decisions with the target of maximizing profits; and its lower-level represents the market clearing under differing load and wind conditions and provides LMPs. This model can be recast as a mixed-integer linear programming problem solvable using commercially available branch-and-cut solvers. The proposed model is illustrated using an example and two case studies.     

Optimizing biogas plants with excess power unit and storage capacity in electricity and control reserve markets

Increasing shares of intermittent power sources such as solar and wind will require biomass fueled generation more variable to respond to the increasing volatility of supply and demand. Furthermore, renewable energy sources will need to provide ancillary services. Biogas plants with excess generator capacity and gas storages can adapt the unit commitment to the demand and the market prices, respectively. This work presents a method of day-ahead unit commitment of biogas plants with excess generator capacity and gas storage participating in short-term electricity and control reserve markets. A biogas plant with 0.6 MW annual average electric output is examined in a case study under German market conditions. For this biogas plant different sizes of the power units and the gas storage are compared in consideration of costs and benefits of installing excess capacity. For optimal decisions depending on prices, a mixed-integer linear programming (MILP) approach is presented.The results show that earnings of biogas plants in electricity markets are increased by additional supplying control reserve. Furthermore, increasing the installed capacity from 0.6 MW to 1 MW (factor 1.7) leads to the best cost–benefit-ratio in consideration of additional costs of excess capacity and additional market revenues. However, the result of the cost–benefit-analysis of installing excess capacity is still negative. Considering the EEG flexibility premium, introduced in 2012 in the German renewable energy sources act, the result of the cost–benefit-analysis is positive. The highest profit is achieved with an increase of the installed capacity from 0.6 MW to 2 MW (factor 3.3).     

Winds of change: How high wind penetrations will affect investment incentives in the GB electricity sector

Wind power is widely expected to expand rapidly in Britain over the next decade. Large amounts of variable wind power on the system will increase market risks, with prices more volatile and load factors for conventional thermal plant lower and more uncertain. This extra market risk may discourage investment in generation capacity. Financial viability for thermal plant will be increasingly dependent on price spikes during periods of low wind. Increased price risk will also make investment in other forms of low-carbon generation (e.g. nuclear power) more challenging.     

The importance of economies of scale,transport costs and demand patterns in optimising hydrogen fuelling infrastructure: An exploration with SHIPMod (Spatial hydrogen infrastructure planning model)

Hydrogen is widely recognised as an important option for future road transportation, but a widespread infrastructure must be developed if the potential for hydrogen is to be achieved. This paper and related appendices which can be downloaded as Supplementary material present a mixed-integer linear programming model (called SHIPMod) that optimises a hydrogen supply chains for scenarios of hydrogen fuel demand in the UK, including the spatial arrangement of carbon capture and storage infrastructure. In addition to presenting a number of improvements on past practice in the literature, the paper focuses attention on the importance of assumptions regarding hydrogen demand. The paper draws on socio-economic data to develop a spatially detailed scenario of possible hydrogen demand. The paper then shows that assumptions about the level and spatial dispersion of hydrogen demand have a significant impact on costs and on the choice of hydrogen production technologies and distribution mechanisms.     

Well-functioning balancing markets: A prerequisite for wind power integration

This article focuses on the design of balancing markets in Europe taking into account an increasing wind power penetration. In several European countries, wind generation is so far not burdened with full balancing responsibility. However, the more wind power penetration, the less bearable for the system not to allocate balancing costs to the responsible parties. Given the variability and limited predictability of wind generation, full balancing exposure is however only feasible conditionally to well-functioning balancing markets. On that account, recommendations ensuring an optimal balancing market design are formulated and their impact on wind generation is assessed. Taking market-based or cost-reflective imbalance prices as the main objective, it is advised that: (1) the imbalance settlement should not contain penalties or power exchange prices, (2) capacity payments should be allocated to imbalanced BRPs via an additive component in the imbalance price and (3) a cap should be imposed on the amount of reserves. Efficient implementation of the proposed market design may require balancing markets being integrated across borders.     

The development of a green certificate market

Liberalizing the electricity industry and attempting to reduce the emissions of greenhouse gases are the two dominant trends in European energy policy. The last-mentioned issue might require the contribution from renewable energy technologies, but at present most renewables cannot compete on their own with conventional technologies. Thus, it can be expected that if renewables must compete solely on market conditions alone this will slow down or even halt the development of new renewable capacity. One model in which additional payments to renewable technologies are generated is based on the development of a separate green market. In Holland a voluntary green certificate market has existed since the beginning of 1998. In Denmark a comprehensive restructuring of the legislation for the electric power industry has just been completed, including the framework for developing a separate green market for renewable electricity production. The main objectives of introducing this type of electricity market in Denmark is to secure the development of renewable energy technologies (including contributions to greenhouse gas reductions), while at the same time releasing the Government from the (by now) quite heavy burden of subsidising renewable technologies. Finally, a green market will make it possible for these renewable technologies to be partly economically compensated for the environmental benefits, which they generate compared to conventional power production. With the recent Danish legislation as starting point this paper analyzes possible ways to set up a green certificate market, treating as well some of the consequences produced when the market is actually funtioning. The analysis is applicable for all renewable technologies, but special attention is given to wind power.     

The large-scale integration of wind generation: Impacts on price,reliability and dispatchable conventional suppliers

This work examines the effects of large-scale integration of wind powered electricity generation in a deregulated energy-only market on loads (in terms of electricity prices and supply reliability) and dispatchable conventional power suppliers. Hourly models of wind generation time series, load and resultant residual demand are created. From these a non-chronological residual demand duration curve is developed that is combined with a probabilistic model of dispatchable conventional generator availability, a model of an energy-only market with a price cap, and a model of generator costs and dispatch behavior. A number of simulations are performed to evaluate the effect on electricity prices, overall reliability of supply, the ability of a dominant supplier acting strategically to profitably withhold supplies, and the fixed cost recovery of dispatchable conventional power suppliers at different levels of wind generation penetration. Medium and long term responses of the market and/or regulator in the long term are discussed.     

The costs and impacts of intermittency: An ongoing debate: "East is East,and West is West,and never the twain shall meet."

A recent issue of Energy Policy carried a new contribution to the ongoing debate over the implications of a high penetration of wind power for the UK electricity system [Oswald, J., Raine, M., Ashraf-Ball, H., 2008. Will British weather provide reliable electricity? Energy Policy 36 (8), 3202–3215]. That paper made a number of points that require comment or qualification, in relation to both system-wide impacts and the impact on conventional thermal generation. The purpose of this forum piece is to respond to these points, and to explain where we believe the Oswald paper risks repeating the mistakes of the past by interpreting data in a selective manner, or by erroneously singling out alarming sounding findings which do not reflect how electricity systems and markets operate. The latest EU renewable energy targets do imply a wind penetration level which is considerably higher than that which has hitherto been envisaged, and new research is require to understand the potential impacts. However, such research must be based on statistical or time series simulation modelling.     

Optimal scheduling of a renewable micro-grid in an isolated load area using mixed-integer linear programming

In the energy management of the isolated operation of small power system, the economic scheduling of the generation units is a crucial problem. Applying right timing can maximize the performance of the supply. The optimal operation of a wind turbine, a solar unit, a fuel cell and a storage battery is searched by a mixed-integer linear programming implemented in General Algebraic Modeling Systems (GAMS). A Virtual Power Producer (VPP) can optimal operate the generation units, assured the good functioning of equipment, including the maintenance, operation cost and the generation measurement and control. A central control at system allows a VPP to manage the optimal generation and their load control. The application of methodology to a real case study in Budapest Tech, demonstrates the effectiveness of this method to solve the optimal isolated dispatch of the DC micro-grid renewable energy park. The problem has been converged in 0.09 s and 30 iterations.     

Strategic planning with risk control of hydrogen supply chains for vehicle use under uncertainty in operating costs: A case study of Spain

In this paper we present a decision-support tool to address the strategic planning of hydrogen supply chains for vehicle use under uncertainty in the operating costs. Given is a superstructure of alternatives that embeds a set of available technologies to produce, store and deliver hydrogen. The objective of our study is to determine the optimal design of the production–distribution network capable of fulfilling a predefined hydrogen demand. The design task is formulated as a multi-scenario mixed-integer linear problem (MILP) that considers the uncertainty associated with the coefficients of the objective function of the model (i.e. operating costs, raw materials prices, etc.). The novelty of the approach presented is that it allows controlling the variation of the economic performance of the hydrogen network in the space of uncertain parameters. This is accomplished by using a risk metric that is appended to the objective function as an additional criterion to be optimized. An efficient decomposition method is also presented in order to expedite the solution of the underlying multi-objective model by exploiting its specific structure. The capabilities of the proposed modeling framework and solution strategy are illustrated through the application to a real case study based on Spain, for which valuable insights are obtained.     

Wind power in the Danish liberalised power market—Policy measures,price impact and investor incentives

Wind power has a strong position at the Danish electricity market, mainly caused by high feed-in tariffs in the 1990s. Investments in new wind-power installations on land, however, have declined dramatically after the Danish electricity market was liberalised in 1999. First, the paper describes how policy measures directed towards wind power have been redesigned to match the liberalised market. Then, we estimate the impact of the redesigned tariffs on the electricity prices. Finally, we assess whether the new tariffs make an incentive to invest in wind power. The paper concludes that the new tariffs not by itself make evidence for the actual Danish recession in new wind-power installations after the electricity reform. The main causes could include a combination of problems in spatial planning, high risk aversion of new wind turbine investors and perhaps more favourable support schemes in other countries.     

Successful renewable energy development in a competitive electricity market: A Texas case study

The development of renewable energy in markets with competition at wholesale and retail levels poses challenges not present in areas served by vertically-integrated utilities. The intermittent nature of some renewable energy resources impact reliability, operations, and market prices, in turn affecting all market participants. Meeting renewable energy goals may require coordination among many market players.     

Holistic minimization of the life cycle environmental impact of hydrogen infrastructures using multi-objective optimization and principal component analysis

Assessing the environmental performance of hydrogen infrastructures is essential for determining their practical viability. Previous optimization approaches for hydrogen networks have focused on optimizing a single environmental metric in conjunction with the economic performance. This approach is inadequate as it may leave relevant environmental criteria out of the analysis. We propose herein a novel framework for optimizing hydrogen supply chains (SC) according to several environmental indicators. Our method comprises two steps. In step one, we formulate a multi-objective mixed-integer linear program (MILP) that accounts for the simultaneous minimization of the most relevant life cycle assessment (LCA) impacts. Principal Component Analysis (PCA) is next employed in the post-optimal analysis of the MILP in order to facilitate the interpretation and analysis of its solution space. We demonstrate the capabilities of this approach through its application to the design of the future (potential) hydrogen SC in Spain.     

Insurance strategy for mitigating power system operational risk introduced by wind power forecasting uncertainty

The increasing penetration of wind power significantly affects the reliability of power systems due to its intrinsic intermittency. Wind generators participating in electricity markets will encounter operational risk (i.e. imbalance cost) under current trading mechanism. The imbalance cost arises from the service for mitigating supply-demand imbalance caused by inaccurate wind forecasts. In this paper, an insurance strategy is proposed to cover the possible imbalance cost that wind power producers may incur. First of all, a novel method based on Monte Carlo simulations is proposed to estimate insurance premiums. The impacts of insurance excesses on premiums are analyzed as well. Energy storage system (ESS) is then discussed as an alternative approach to balancing small wind power forecasting errors, whose loss claims would be blocked by insurance excesses. Finally, the ESS and insurance policy are combined together to mitigate the imbalance risks of trading wind power in real-time markets. With the proposed approach, the most economic power capacity of ESS can be determined under different excess scenarios. Case studies prove that the proposed ESS plus insurance strategy is a promising risk aversion approach for trading wind power in real-time electricity markets.