Methods for evaluation of regulation affecting flexibility in - PowerPoint PPT Presentation

Methods for evaluation of regulation affecting flexibility in energy systems A review of the literature Daniel Møller Sneum, Energy Economics and Regulation, DTU Management Engineering, DK SAEE conference, Luleå, Sweden August 2016

AGENDA 1. The problem: Why look at methods for evaluation of regulation 2. Method applied: Literature review 3. Tentative results: What does the literature say 4. Tentative analysis: What structures emerge and can they be used for anything? ~Tentative results - Comments most welcome!~

MEET YOUR TEACHING ASSISTANTS I like to model! I like qualitative stuff! § Ref: https://larottaperitaca.wordpress.com/2012/01/12/ banach-tarski-le-arance-danesi/

HYPOTHESIS: STRUCTURE IS MISSING • Much has been written on flexibility regarding • Technologies • Markets • Systems • Modelling • Less on how we overall identify, characterise and evaluate regulation affecting flexibility Ref: https://it.wikipedia.org/wiki/File:Sperm_whale_skeleton.jpg

RESEARCH QUESTIONS What is the state of the art on methodologies for evaluation of regulation that affects the flexibility of energy systems ? What elements from those methodologies can be applied to build a comprehensive methodology for evaluation of this type of regulation? Scope: Energy system with electricity, heat, gas and transport

METHODOLOGY Why literature review? • To identify state of the art • …and gaps • Build future research on both Why systematic? • An approach to literature review that will increase rigor, is replicable and reduce bias • The contradiction is narrative reviews, which approach the subject more unstructured

WORK IN PROGRESS Tranfield (2003) defines ten phases: 0. Identification for the need for a review 1. Preparation of a proposal for a review 2. Development of a review protocol 3. Identification of research 4. Selection of studies 5. Study quality assessment 6. Data extraction and monitoring progress 7. Data synthesis 8. The report and recommendations 9. Getting evidence into practice

METHOD Nvivo for coding of references Miller, M; Bird, L; Cochran, J; Milligan, M; Bazilian, M; Renewable, National; Denny, E; Dillon, J; Baritaud, Manuel International Energy Bialek, J; Limited, Ecar; (2012) Agency (2014) Keane, Gary (2010) Neuhoff, K (2013) Definition - flexibility resources 0 0 4 0 Market design 2 20 2 8 Operation - utilized flexibility resources 0 1 2 0

50 MOST FREQUENT WORDS

RESULT: EMERGING SUBJECTS LITERATURE: Technologies – physical capability of suppling flexibility LITERATURE: Investment/adequacy LITERATURE: (flexible) operation

RESULT: EMERGING HIERARCHY Flexible technologies – physical ability to supply flexibility Investment/adequacy (flexible) operation Flexible resources Available flexible resources Available flexible resources operated flexibly

HIERARCHY: EXAMPLE WITH CHP Combined heat and power plant (CHP) CHPs on the ground CHPs on the ground, operating flexibly Flexible resources Available flexible resources Available flexible resources operated flexibly

What goes on here? And here? Picture ref: http://www.publicdomainpictures.net/view- image.php?image=71841&picture=&jazyk=DE

EMERGING STRUCTURE: FRAMEWORK CONDITIONS What is holding Available flexible resources back? Markets 1 ANSWER: Regulation 6 Markets 2 framework Regulation 5 Markets 3 What is holding Available flexible conditions Regulation 4 Regulation 1 resources operated flexibly Regulation 3 Regulation 2 back? Flexible resources Available flexible resources Available flexible resources operated flexibly

WHAT ARE THE FRAMEWORK CONDITIONS? LITERATURE: ” Framework conditions are context-specific ” IT’S A MESS! TAXONOMY NEEDED! Ref: Ref: https://en.wikipedia.org/wiki/File:Singapore_Road_Signs_-_Temporary_Sign_-_Detour.svg https://larottaperitaca.wordpress.com/2012/01/12/ banach-tarski-le-arance-danesi/

DETOUR: FINDING THE FRAMEWORK CONDITIONS Example of taxonomy to identify framework conditions: ORIGIN ACTOR/AREA External Market Government/politics Technology/services suppliers Designers and manufacturers My kind Energy suppliers of work Capital suppliers Internal Economic § Behavioural Organisational Barriers related to competences Cagno et al. Awareness (2013)

THE FRAMEWORK CONDITIONS - NICE AND STRUCTURED Markets 1 Regulation 6 Markets 2 Regulation 5 Markets 3 Regulation 4 Regulation 1 Regulation 3 Regulation 2 Flexible resources Available flexible resources Available flexible resources operated flexibly

WHERE ARE THE FRAMEWORK CONDITIONS PLACED? They are Markets 1 …but must be identified Regulation 6 Markets 2 confirmed by qualitatively modelling, due by regulation to possible review … inter- Regulation 5 Markets 3 dependencies Finally! Yes! Regulation 4 Regulation 1 § Regulation 3 Regulation 2 Flexible resources Available flexible resources Available flexible resources operated flexibly Ref: https://larottaperitaca.w ordpress.com/2012/01/ 12/banach-tarski-le- arance-danesi/

SUMMING UP 1. Literature gives us fragments: 1. Technical ability to provide flexibility ( Flexible resources ) 2. Investmest and adequacy-related discussions ( Available flexible resources ) 3. Flexible operation ( Available flexible resources operated flexibly ) 2. We deduct a hierarchy: 3. We ask, “What FCs?” 1. Literature gives us a mess of framework conditions  detour for taxonomy 4. We ask, “Where are the FCs?” 1. Iterative policy review AND modelling

CONCLUDING: HAS CONTENTS, NEEDS STRUCTURE 1: Methodologies for evaluation of regulation that affects the flexibility of energy systems 2: Build a comprehensive methodology for evaluation of this type of regulation • No systematic methodological considerations have been identified , indicating an absence of methodologies that can addresses the full spectrum of sectors, market frameworks and regulatory frameworks. This potentially limits the identification of low-hanging fruits when identifying, evaluating and addressing the impact of regulation on flexibility. • Several applied-level examples. • Evaluation of regulation affecting flexibility is seen addressed in conjunction with more overall considerations on integration of VRE . • Much on markets; less on the regulatory part. Suggests a need for further considerations and treatment of the subject, for the most part in the scientific literature. • Methodology developed from elements emerging from literature. • Criticism of applied method and the developed methodology: • Potential for bias should be addressed. • Is there a need for it?

Tack så mycket! www.Flex4RES.org

REFERENCES (more to come) • Baritaud, M., 2012. Securing Power during the Transition , Paris. • Bertsch, J. et al., 2016. Flexibility in Europe’s power sector-An additional requirement or an automatic complement? Energy Economics , 53, pp.118 – 131. Cagno, E. et al., 2013. A novel approach for barriers to industrial energy efficiency. Renewable and Sustainable Energy Reviews , 19, pp.290 – 308. • • Cochran, J. et al., 2014. Flexibility in 21 st Century Power Systems , Golden. Cochran, J. et al., 2013. Market Evolution: Wholesale Electricity Market Design for 21 st Century Power Systems , Golden. Available at: • http://www.nrel.gov/docs/fy14osti/57477.pdf. • Danish Energy Agency, 2015. Flexibility in the Power System - Danish and European experiences , Copenhagen. • Dragoon, K. & Papaefthymiou, G., 2015. Power System Flexibility Strategic Roadmap - Preparing power systems to supply reliable power from variable energy resources , Berlin. Available at: http://www.leonardo-energy.org/sites/leonardo-energy/files/documents-and- links/strategic_flexibility_roadmap-final-beta_version.pdf. • ENTSO-E, 2016. ENTSO-E position on the review of the Renewable Energy Directive. Available at: https://www.entsoe.eu/publications/position- papers/position-papers-archive/Pages/Position Papers/ENTSO-E-position-on-the-review-of-the-renewables-energy-directive.aspx [Accessed February 17, 2016]. • EURELECTRIC, 2014. Flexibility and aggregation - requirements for their interaction in the market , Available at: http://www.eurelectric.org/media/115877/tf_bal-agr_report_final_je_as-2014-030-0026-01-e.pdf. GE Energy, 2010. Western Wind and Solar Integration Study , New York. Available at: http://www.osti.gov/bridge. • Gottstein, M. & Skillings, S.A., 2012. Beyond capacity markets - Delivering capability resources to Europe’s decarbonised power system. In 9th • International Conference on the European Energy Market, EEM 12 . pp. 1 – 8. • Henriot, A. & Glachant, J.M., 2013. Melting-pots and salad bowls: The current debate on electricity market design for integration of intermittent RES. Utilities Policy , 27, pp.57 – 64. Available at: http://dx.doi.org/10.1016/j.jup.2013.09.001. • Hvelplund, F., 2001. Electricity Reforms, Democracy and Technological Change , Aalborg: Institute for Development and Planning, Aalborg University. IEA, 2014. The power of transformation , • International Energy Agency, 2016. Re-powering Markets , Paris. • • Keane, G., 2010. Options for low-carbon power sector flexibility to 2050 , Oxford.