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.     

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).     

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.     

Potential of trading wind power as regulation services in the California short-term electricity market

A short-term electricity market is usually composed of the energy market and ancillary service market. However, wind power is not allowed to be traded in ancillary service markets although it has been proven technically feasible to be regulation services. This paper aims to explore the market potential of trading wind power as regulation services in the California electricity market. A model for wind power trade in the day-ahead (DA) market is established considering the uncertainties of market prices and wind power. An optimal trading strategy for wind power producers is derived by using an analytical algorithm. Trading wind power as regulation is tested by using actual data and the impacts of market control on the market outcome are discussed. The results show that, based on the current framework of the California electricity market, wind power producers can earn much more money if they bid in the DA energy and regulation markets than if they only bid in the DA energy market. The results also show that the potential to enhance profit for wind power producers is larger in the regulation down market than in the regulation up market.     

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.     

Techno-econo-environmental optimal operation of grid-wind-solar electricity generation with hydrogen storage system for domestic scale,case study in Chad

The rapidly growing of population in the developing countries and their lack of access to electricity, especially in the remote or rural areas, is causing huge challenges for on energy production. Energy is an enabler and a reliable energy supply is critical to sustainable socio-economic development for any nation. Most of Chad's people live in villages with no particular power supply system. Exploiting renewable energies is the only means of fostering development and improving people's welfare. This paper attempts at proposing an energy profile and storage model for Chad in vast remote towns. The paper addresses the key energy gap that is hindering on the development of such systems, it models and assess the potential on electricity generation and using hydrogen as surplus power storage system. A techno-econo-environmental survey on a solar-wind hybrid system in 25 towns in Chad is undertaken using NASA data and HOMER Software. Several hybrid scenarios of energy production and storage is analyzed. The results showed that in the electricity generation scenario, the average total NPC for the studied stations was $ 48164 and the average LCOE was $0.573. The lowest LCOE was related to Aouzou station with 0.507 $/kWh and the highest LCOE was obtained for Bol station with 0.604 $/kWh. In the simultaneous electricity and hydrogen generation scenario, the cheapest hydrogen ($4.695/kg) was produced in the “Grid” scenario, which was the same for all of the stations, with a total NPC of $2413770. The most expensive hydrogen ($4.707/kg) was generated in the “Grid-Wind” scenario and Bol stations with a total NPC of $2420186. The paper develops cost effective models for all hybrid systems combination for both electricity and hydrogen generation across Chad. These findings could help policy makers, investors and other developmental agencies make informed choices on energy access for sustainable development for rural communities in Sub Saharan Africa.     

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.     

A wind–diesel system with hydrogen storage: Joint optimisation of design and dispatch

We compare two models to determine the size of grid units and dispatch in a wind-diesel power system with hydrogen storage. Both take as data 1-year time series of hourly wind speed and electricity demand, and their objective is to minimise cost. Our first model, based on linear programming, generates as output a combination of capacities and a year time series for the dispatch variables. Our second model runs a fixed dispatch rule over several capacity combinations and selects the cheapest option. The dispatch rule can then be improved through comparison with the linear programming solution. At present costs, the hydrogen storage-conversion system is excluded from the solutions, so the interesting operation rules associated with the option of harvesting do not arise. However, the costs of hydrogen storage technologies are decreasing with investment. By running our model with prospective costs for year 2010, we see storage emerge in the optimum, and thus a sample of the operation patterns that will occur in a renewable dominated grid.     

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 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.     

Integration of large-scale hydrogen storages in a low-carbon electricity generation system

This study investigates the overall feasibility of large energy storages with hydrogen as energy carrier onsite with a pre-combustion carbon capture and storage coal gasification plant and assesses the general impacts of such a backup installation on an electricity generation system with high wind power portion. The developed system plant configuration consists of four main units namely the gasification unit, main power unit, backup power unit including hydrogen storage and ancillary power unit. Findings show that integrating a backup storage in solid or gaseous hydrogen storage configuration allows to store excessive energy under high renewable power output or low demand and to make use of the stored energy to compensate low renewable output or high power demand. The study concludes that the developed system configuration reaches much higher load factors and efficiency levels than a plant configuration without backup storage, which simply increases its power unit capacity to meet the electricity demand. Also from an economical point of view, the suggested system configurations are capable to achieve lower electricity generation costs.     

An economic analysis of the production of hydrogen from wind-generated electricity for use in transport applications

Wind-generated electricity is often considered a particularly promising option for producing hydrogen from renewable energy sources. However, the economic performances of such systems generally remain unclear because of unspecified or favorable assumptions and operating conditions. The aim of this paper is to clarify these conditions by examining how the hydrogen produced is used. The analysis that has been conducted in the framework of the HyFrance 3 project concerns hydrogen for transport applications. Different technical systems are considered such as motorway hydrogen filling stations, Hythane®-fueled buses or second-generation biofuels production, which present contrasted hydrogen use characteristics. This analysis reveals considerable variations in hydrogen production costs depending on the demand profiles concerned, with the most favorable configurations being those in which storage systems are kept to a minimum.     

The benefits of integrating European electricity markets

The European Commission's Target Electricity Model (TEM) aims to integrate EU electricity markets. This paper estimates the potential benefit of coupling interconnectors to increase the efficiency of trading day-ahead, intra-day and balancing services across borders. Further gains are possible by eliminating unscheduled flows and avoiding the curtailment of renewables with better market design. In the short run the gains could be as high as €3.9 billion/yr, more than 100% of the current gains from trade. About one-quarter of this total comes from day-ahead coupling and another third from shared balancing. If shared balancing is so valuable, completing the TEM becomes more urgent, and regulators should ensure these gains are paid to interconnectors to make the needed investment in the cross-border links more commercially profitable.     

Practical operation strategies for pumped hydroelectric energy storage (PHES) utilising electricity price arbitrage

In this paper, three practical operation strategies (24Optimal, 24Prognostic, and 24Hsitrocial) are compared to the optimum profit feasible for a PHES facility with a 360 MW pump, 300 MW turbine, and a 2 GWh storage utilising price arbitrage on 13 electricity spot markets. The results indicate that almost all (∼97%) of the profits can be obtained by a PHES facility when it is optimised using the 24Optimal strategy developed, which optimises the energy storage based on the day-ahead electricity prices. However, to maximise profits with the 24Optimal strategy, the day-ahead electricity prices must be the actual prices which the PHES facility is charged or the PHES operator must have very accurate price predictions. Otherwise, the predicted profit could be significantly reduced and even become a loss. Finally, using the 24Optimal strategy, the PHES profit can surpass the annual investment repayments required. However, over the 5-year period investigated (2005–2009) the annual profit from the PHES facility varied by more than 50% on five out of six electricity markets considered. Considering the 40-year lifetime of PHES, even with low investment costs, a low interest rate, and a suitable electricity market, PHES is a risky investment without a more predictable profit.     

Risk-averse stochastic operation of a power system integrated with hydrogen storage system and wind generation in the presence of demand response program

Wind generation (WG) units as renewable energy sources (RESs) are increasing in the world due to environmental functions and lack of conventional energy sources. Also, hydrogen storage system (HSS) as an energy storage system (ESS) is used to cope with variable nature of RESs in which the concepts of power to hydrogen (P2H) and hydrogen to power (H2P) are defined. In this work, a risk-averse stochastic operation of HSS and WG is modeled using a scenario-based stochastic approach by considering price-responsive demand response (DR) program. All uncertainties are modeled via a scenario-based stochastic approach while the risk related uncertainties are modeled via the downside risk constraints (DRC) to capture the risk-averse operation of the HSS and WG. In order to investigate the impact of DRC implementation, a risk-averse strategy is compared versus risk-neutral strategy. Compared results show that the risk-in-cost (RIC) is reduced while the expected operation cost (EOC) is raised to deal with the risk of the uncertainty.     

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.     

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.     

A framework for the design & operation of a large-scale wind-powered hydrogen electrolyzer hub

Due to the threat of climate change, renewable feedstocks & alternative energy carriers are becoming more necessary than ever. One key vector is hydrogen, which can fulfil these roles and is a renewable resource when split from water using renewable electricity. Electrolyzers are often not designed for variable operation, such as power from sources like wind or solar. This work develops a framework to optimize the design and operation of a large-scale electrolyzer hub under variable power supply. The framework is a two-part optimization, where designs of repeated, modular units are optimized, then the entire system is optimized based on those modular units. The framework is tested using a case study of an electrolyzer hub powered by a Dutch wind farm to minimize the levelized cost of hydrogen. To understand how the optimal design changes, three power profiles are examined, including a steady power supply, a representative wind farm power supply, and the same wind farm power supply compressed in time. The work finds the compressed power profile uses PEM technology which can ramp up and down more quickly. The framework determines for this case study, pressurized alkaline electrolyzers with large stacks are the cheapest modular unit, and while a steady power profile resulted in the cheapest hydrogen, costing 4.73 €/kg, the typical wind power profile only raised the levelized cost by 2%–4.82 €/kg. This framework is useful for designing large-scale electrolysis plants and understanding the impact of specific design choices on the performance of a plant.     

Optimizing hydrogen production capacity and day ahead market bidding for a wind farm in Texas

Producing green hydrogen from wind energy is one potential method to mitigate curtailment. This study develops a general approach to examine the economic benefit of adding hydrogen production capacity through water electrolysis along with the fuel cell and storage facilities in a wind farm in north Texas. The study also investigates different day ahead market bidding strategies in the existence of these technologies. The results show that adding hydrogen capacity to the wind farm is profitable when hydrogen price is greater than $3.58/kg, and that the optimal day ahead market bidding strategy changes as hydrogen price changes. The results also suggest that both the addition of a fuel cell to reconvert stored hydrogen to electricity and the addition of a battery to smooth the electricity input to the electrolyzer are suboptimal for the system in the case of this study. The profit of a particular bidding scenario is most sensitive to the selling price of hydrogen, and then the input parameters of the electrolyzer. This study also provides policy implications by investigating the impact of different policy schemes on the optimal hydrogen production level.     

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).