Whole-system approach to assessing the value of flexible technologies in

supporting cost effective integration of renewables

Goran Strbac

Imperial College London

Workshop on "addressing flexibility in energy system models"

Energy Modelling Activities at Imperial •  Whole electricity System Model

•  D. Pudjianto, P Djapic •  Option value of flexibility under uncertainty

•  R Vinter, I. Konstantelos, S Tindemans, P Falugi •  Decentralised, Price based Control and Investment Model

•  D Papadaskalopoulos, Y Ye, Y Fan •  Advanced Stochastic Unit Commitment Model

•  F Teng, M Aunedi •  Combined Gas, Electricity and Hydrogen Model

•  M Qadrdan, H Ameli, M Aunedi, R Moreno •  Integrated Heat and Electricity Model

•  R Sansom, P Postantzis •  Hydrogen & Carbon Capture and Storage Model

•  S Samsatli, N Shah, A Hawkes •  Market Design and Business Models

•  R Moreno, R Green, D Newbery

Tongland

THE SHETLAND ISLANDS

400kV Substations275kV Substations132kV Substations400kV Circuits275kV Circuits132kV Circuits

Major Generating Sites Including Pumped Storage

Connected at 400kVConnected at 275kVHydro Generation

2008/09 TRANSMISSION SYSTEMAS AT 31st DECEMBER 2007

ISSUE B 15-07-09 41/177625 C Collins Bartholomew Ltd 1999

5

4

3

21

6

7

109

8 2

1

3

4

5

67

8

9

Pentland Firth

17

16 15

14 11

12 10

13

9

867

5

9

10

11

13

12

14

2

3

41

23

4

7 6

5

2020: 25% of energy demand to be supplied by renewable generation

2030: Decarbonising electricity system.... ....while

2030+: Electrifying heat and transport sectors… in order to reduce CO2 emissions by 80% by 2050

UK Response to Climate Change Challenge

Year   U'lisa'on  

2010   55%  

2020   35%  

UK Low carbon system: degradation in asset utilisation

4

2020: Wind generation will displace energy produced by conventional plant but its ability displace capacity will be limited: more than 35% of conventional generation operating at less than 10% load factor 2030+: Electrification of segments of transport and heat sectors: increase in peak demand disproportionally higher than increase in energy

2030+   <25%  

Balancing challenge and need for flexibility

Great business opportunity for flexible generation, storage, demand side response, interconnection

Value of flexibility

frequently higher than value of energy

Surplus of energy for >15% of time

55%

2010

Asset Utilisation

BaU

Flexible Balancing Technologies

2020 2030+

35%

25%

6

Volume of the market for flexible balancing technologies >£60b

Interconnection & smart network technologies

Demand Response

Storage Flexible Generation

Paradigm shift: from redundancy in assets to intelligence

System integration challenge

“Understanding balancing challenge”, Imperial College, 2012

7

Whole System Approach to Valuing Flexible Options - Time and Location effects

Generation,  Transmission  &  Distribution  Planning

Long-­‐term  Generation  and  Storage  Scheduling

Day-­‐ahead  Generation,  Storage  &  DSR  Scheduling

System  Balancing

Actual  delivery:  physical  generation  &  consumption

One  day  to  one  hour  before  delivery

Months  to  days  before  delivery

Years  before  delivery

Adequacy Reserve  &  ResponseArbitrage

Demand-­‐Side  Response

Flexible  Generation

Network Storage

Increasing  asset  utilisation  and  efficiency  of  system  balancing

Whole-system modelling critical for capturing Time and Location interactions

(1) Do we understand the competitiveness and synergies between alternative flexible technologies?

(2) Is the market design efficient?

8  

Value of Energy Storage across time in renewable scenario

2015 2030 2050

1110 750 410 5000 2000 1000 12500 2500 1000

Cost of storage £/kw Cost of storage £/kw Cost of storage £/kw Cost of storage £/kw

Pudjianto D, Aunedi M, Djapic P, Strbac Get al., 2014, Whole-Systems Assessment of the Value of Energy Storage in Low-Carbon Electricity Systems, IEEE TRANSACTIONS ON SMART GRID, Vol: 5, Pages: 1098-1109

9  

Storage design parameters

!

How big the energy tank should be?

How important is storage efficiency?

“Strategic Assessment of the Role and Value of Energy Storage Systems in the UK Low Carbon Energy Future”, Imperial College, 2012

10  

What is the signal from market to energy storage scientists?

Loss of revenue of CfD / ROC recovered through the market – negative prices

11  

Operating patterns and technology degradation

Distributed Bulk

12  

Quantifying the value of storage: Stochastic or Deterministic?

13  

Investment in generation flexibility ?

System value of enhanced flexibility of CCGTs will be significant

How about the value to investors?

14  

Generation Transmission Distribution Demand

Flexible Prosumers

Energy Flexibility

Energy: From the Grid to Consumers Flexibility: From Consumers to the Grid

Value today: £3 Value in 2030: >£80

Separated G&T&D? Business model?

15  

Electrifying transport sector: value of smart charging

0

50

100

150

200

250

BaU Smart  timing Fully  smart

Additional  cost  to  supply  EV  demand  

(€/EV/year)

OPEX Generation  CAPEXTransmission  CAPEX Distribution  CAPEX

-­‐10

0

10

20

30

40

BaU Smart  sched. Fully  smart

Carbon

 emission

s  from  su

pplying  EV

s  (gCO

2/km

)

DE-­‐DK

Italy

UK-­‐RI

Spain

16  

Reduced system inertia – opportunity for fast responsive technologies

0

1000

2000

3000

4000

5000

Va

lue

of

fre

qu

en

cy

re

sp

on

se

(£

/kW

) 2015 2020 2030

Stochastic Unit Commitment with with inertia and frequency regulation endogenously modelled

17  

Can smart refrigerators displace power stations ?

=

? +

49.2 (H

z)

10 s 50.0

10 mins 50.2

Frequency control

0 20 40 60 80 100 120 140 160 18025

30

35

40

45

50

55

Time (min)

Load

p.f.

(W)

Load per fridge (p.f) Demand 60Gw 100% Refigerators, step 1.320GW ramp 0

DDCNo DDC...but the beer is

getting warm!

fridges are supporting the system

0

100

200

300

400

500

600

25% 50% 75% 100%

Cos

t sav

ings

per

frid

ge (£

/app

l)

DD penetration

RES2050NUC2050RES2030NUC2030RES2050WNUC2050WRES2030WNUC2030WCUR2011

!

18  

Conflicts between load following and congestion management . .

Modelling of price based response of Demand Side Papadaskalopoulos D, Strbac G, 2013, Decentralized Participation of Flexible Demand in Electricity Markets-Part I: Market Mechanism, IEEE TRANSACTIONS ON POWER SYSTEMS, Vol: 28, Pages: 3658-3666

19  

Using demand side response to provide local network management services or balancing services at a national level

Whole-system or network centric approach?

20 20

Example of Flexible generation: competition with other technologies

For high cost of flexibility (GH), build ~10 GW

For low cost of generation flexibility (GL), build ~16-18 GW for high interconnection levels, ~28-36 GW for low interconnection levels

Note: most flexible generators installed in SE&W region

21  

Complexity of distributed energy storage and demand response: Split benefits

Balancing services

Network services

DSR and storage - industry business model? Can the market facilitate this?

CHP HP ST

ORA

GE

HEAT NETWORK

ELECTRICITY NETWORK

Heat

Electricity t

Integrated heat and

electricity model

Combined  Heat  and  Electricity  Network  

Op'ons:  enhancing  flexibility  of  gas  network  (linepack),  more  flexible  CCGTs,  electricity  storage,  Demand  side  response,  Power-­‐to-­‐Gas  .  .      

23  

Hydrogen Supply Chain model

Spatial element: Great Britain represented by 34 108×108 km2 square cells Temporal dynamic model with 4 to 6-hr periods in a day

Coal  gasification

Natural  gas

Coal

Biomass

Electricity

Steam  methane  reforming

Biomass  gasification

Electrolysis

Liquid  hydrogen

Gaseous  Hydrogen

Tanker  truck

Tube  trailer

Railway  tube  car

Fuellingstations(liquid)

Liquidhydrogen  storage

Compressed  hydrogen  gas  

storage

Tanker  truck

Railway  tanker  car

Tube  trailer

Railway  tube  car

Fuellingstations(gas)

Railway  tanker  car

Coal

Biomass

Electricity

Natural  gas Steam  Methane  Reforming

Coal  gasification

Biomass  gasification

Electrolysis

Tanker  truck

Railway  tanker  car

Tanker  truck

Railway  tanker  car

Tube  trailerRailway  tube  car

Tube  trailer Railway  tube  car

Fuelling  station

Fuelling  station

Liquid  H2storage

Gaseous  H2storage

25

Dealing with uncertainty in future development: Option value flexibility

? ? Significant value in investing in flexibility to deal with uncertainty

North Sea Grid: strategic versus incremental: savings €25bn and€75bn

I Konstantelos, G Strbac, 2014, “Valuation of Flexible Transmission Investment Options Under Uncertainty, , IEEE TRANSACTIONS ON POWER SYSTEMS, Vol: 28, Pages: 3658-3666

26  

Member State-centric or EU wide approach?

1.  Energy sufficiency?

2.  RES deployment?

3.  Adequacy? 4.  Balancing?

27  

0 11

48

92

17

65

0

103

206

Baseline Integrated Int Low TX Int Self-secure Int EU reserve Int DSR

Add

ition

al p

eaki

ng c

apac

ity (G

W)

Member state-centric or EU-wide capacity adequacy market?

27

Can you really trust …… when it comes to security ?

EU Wide approach can save 100-160 GW of plant!

Savings more than €7bn per annum

28  

UK  

Fr  

Should  the  capacity  of  the  

interconnector  be  allocated  for  

Energy  or  Reserve?  

Base load Pump Storage

Mid merit CCGT

Variable wind

Increased  need    for  reserve  

Integra'on  of  balancing  market  

Flexibility cannot be traded cross-border!

29  

Stochastic Optimisation: coordinating allocation of interconnection capacity between energy and reserve

It is efficient to constrain energy flow in order to facilitate cross-border access to flexibility

0"

1"

2"

3"

0"

5"

10"

15"

20"

25"

30"

1" 10"

19"

28"

37"

46"

55"

64"

73"

82"

91"

100"

109"

118"

127"

136"

145"

154"

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199"

208"

217"

226"

235"

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262"

271"

280"

289"

298"

307"

316"

325"

334"

Power&flow

&(GW)&

Wind&Po

wer&(G

W)&

Wind"Power" "Reserve"purchased"in"A" Reserve"purchased"in"B"UK Fr

30  

EU RES deployment

Wind resource Solar resource

EU wide or member state centric approach? Should the Physics be respected?

North is Windy & South is Sunny…

31  

EU wide renewables deployment savings of 146 GW of PV & Wind => savings between €16.5 – 30bn per year

Coordinated RES deployment needs stronger interconnection

Impact  of  distributed  genera3on  on  distribu3on  network  reinforcement  

32  

LV,  MV,  HV  –  Low,  Medium,  High  Voltage;  V  and  I  –  Voltage  and  Thermal  Constraints  UG  –  Underground  cables;  OH  –  Overhead  lines  

0"

5,000"

10,000"

15,000"

20,000"

25,000"

30,000"

35,000"

FR"0"

2,000"

4,000"

6,000"

8,000"

10,000"

12,000"

14,000"

FR_C" FR_E" FR_N" FR_NE" FR_S" FR_SE" FR_SW" FR_W"

Reinf

orcemen

t+cost+(€m

)+

HV"UG"V"

HV"OH"V"

HV"UG"I"

HV"OH"I"

HV/MV"

MV"UG"V"

MV"OH"V"

MV"UG"I"

MV"OH"I"

MV/LV"

LV"UG"V"

LV"OH"V"

LV"UG"I"

LV"OH"I"

33  

Benefits of EU wide market integration (versus member state centric approach)

Area of Market Integration Savings in €bn/annum

Integrated EU Energy Market 9 - 34

Integrated EU Capacity Market 7 - 10

Integrated EU Balancing Market 2.5 - 5

Integrated EU Renewable Policy 15.5 - 30

Integrated North Sea Grid 3.5 – 9.5

Whole-system approach to assessing the value of flexible technologies in

supporting cost effective integration of renewables

Goran Strbac

Imperial College London

Workshop on "addressing flexibility in energy system models"