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Workshop on "addressing flexibility in energy system models" Whole-system approach to assessing the value of flexible technologies in supporting cost effective integration of renewables Goran Strbac Imperial College London Energy

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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"

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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
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SLIDE 3 Tongland THE SHETLAND ISLANDS 400kV Substations 275kV Substations 132kV Substations 400kV Circuits 275kV Circuits 132kV Circuits Major Generating Sites Including Pumped Storage Connected at 400kV Connected at 275kV Hydro Generation 2008/09 TRANSMISSION SYSTEM AS AT 31st DECEMBER 2007 5 4 3 2 1 6 7 10 9 8

2 1 3 4 5 6 7 8 9

Pentland Firth 17 16 15 14 11 12 10 13 9 8 6 7 5 9 10 11 13 12 14 2 3 4 1 2 3 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

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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% ¡

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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

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55% 2010 Asset Utilisation

BaU Flexible Balancing Technologies

2020 2030+ 35% 25%

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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

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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 ¡& ¡Response Arbitrage

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?

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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

  • f Energy Storage in Low-Carbon Electricity Systems, IEEE TRANSACTIONS ON SMART

GRID, Vol: 5, Pages: 1098-1109

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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

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What is the signal from m ma marke ket to to ene nergy rgy sto storage rage scie scientists ntists? ?

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

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Ope perating pa patterns and technology de degradatio gradation n

Distributed Bulk

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Quantifying the value of storage: Stochastic or Deterministic?

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Investment in generation flexibility ?

System value of enhanced flexibility of CCGTs will be significant

How about the value to investors?

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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?

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Electrifying transport sector: value of smart charging

50 100 150 200 250 BaU Smart ¡timing Fully ¡smart Additional ¡cost ¡to ¡supply ¡EV ¡demand ¡ (€/EV/year) OPEX Generation ¡CAPEX Transmission ¡CAPEX Distribution ¡CAPEX

  • ­‑10

10 20 30 40 BaU Smart ¡sched. Fully ¡smart Carbon ¡emissions ¡from ¡supplying ¡EVs ¡(gCO2/km)

DE-­‑DK Italy UK-­‑RI Spain

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Reduced system inertia – opportunity for fast responsive technologies

1000 2000 3000 4000 5000

Value of frequency response (£/kW) 2015 2020 2030

Stochastic Unit Commitment with with inertia and frequency regulation endogenously modelled

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Can smart refrigerators displace power stations ?

=

?

+

49.2 (Hz) 10 s 50.0 10 mins 50.2

Frequency control

20 40 60 80 100 120 140 160 180 25 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

DDC No DDC

...but the beer is getting warm! fridges are supporting the system

100 200 300 400 500 600 25% 50% 75% 100% Cost savings per fridge (£/appl) DD penetration RES2050 NUC2050 RES2030 NUC2030 RES2050W NUC2050W RES2030W NUC2030W CUR2011

!

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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

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

Whole-system or network centric approach?

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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

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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?

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CHP HP

STORAGE

HEAT NETWORK ELECTRICITY NETWORK

Heat Electricity

t

Integrated heat and electricity model

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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 ¡

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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 Fuelling stations (liquid) Liquid hydrogen ¡ storage Compressed ¡ hydrogen ¡gas ¡ storage Tanker ¡truck Railway ¡ tanker ¡car Tube ¡trailer Railway ¡ tube ¡car Fuelling stations (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 ¡trailer Railway ¡tube ¡car Tube ¡trailer Railway ¡tube ¡car Fuelling ¡station Fuelling ¡station Liquid ¡H2 storage Gaseous ¡H2 storage

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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

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Member State-centric or EU wide approach?

  • 1. Energy

sufficiency?

  • 2. RES

deployment?

  • 3. Adequacy?
  • 4. Balancing?
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27 ¡ 11 48 92 17 65 103 206 Baseline Integrated Int Low TX Int Self-secure Int EU reserve Int DSR

Additional peaking capacity (GW)

Memb mber state-centric or EU-wide capa pacity adequacy ma marke ket?

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

EU Wide approach can save 100-160 GW

  • f plant!

Savings more than €7bn per annum

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28 ¡

UK ¡

Fr ¡

Should ¡the ¡capacity ¡

  • f ¡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!

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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" 163" 172" 181" 190" 199" 208" 217" 226" 235" 244" 253" 262" 271" 280" 289" 298" 307" 316" 325" 334" Power&flow&(GW)& Wind&Power&(GW)& Wind"Power" "Reserve"purchased"in"A" Reserve"purchased"in"B"

UK

Fr

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EU RES depl ployme ment

Wind resource

Solar resource

EU wide or member state centric approach?

Should the Physics be respected? North is Windy & South is Sunny…

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

Coordinated RES deployment needs stronger interconnection

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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" Reinforcement+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"

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Benefits of EU wide ma marke ket integration (ve versus me memb mber state centric appr pproach)

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

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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"