Whole-system approach to assessing the value of flexible - PowerPoint PPT Presentation

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 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

UK Response to Climate Change Challenge 2020 : 25% of energy demand 2008/09 TRANSMISSION SYSTEM AS AT 31st DECEMBER 2007 400kV Substations 275kV Substations 132kV Substations 400kV Circuits 275kV Circuits 132kV Circuits Major Generating Sites Including Pumped Storage to be supplied by renewable Pentland Firth Connected at 400kV THE SHETLAND ISLANDS Connected at 275kV 6 Hydro Generation 1 generation 5 7 2 2030: Decarbonising electricity 8 9 10 4 3 system.... ....while 3 Tongland 2 2 14 1 4 3 1 2030+ : Electrifying heat and 4 2 3 17 9 16 15 4 5 7 6 14 11 13 13 12 10 12 transport sectors … 11 5 9 10 8 7 6 in order to reduce CO2 9 5 8 emissions by 80% by 2050 6 7

UK Low carbon system: degradation in asset utilisation 2020 : Wind generation will displace energy produced by Year ¡ U'lisa'on ¡ conventional plant but its ability displace capacity will be limited: 2010 ¡ 55% ¡ more than 35% of conventional generation operating at less than 10% load factor 2020 ¡ 35% ¡ 2030+: Electrification of segments of transport and heat 2030+ ¡ <25% ¡ sectors: increase in peak demand disproportionally higher than increase in energy 4

Balancing challenge and need for flexibility Surplus of energy for >15% of time Value of flexibility frequently higher than value of energy Great business opportunity for flexible generation, storage, demand side response, interconnection

System integration challenge Asset Interconnection & Demand Utilisation smart network Flexible Balancing Response Technologies technologies 55% Paradigm shift: from redundancy in assets to intelligence 35% Storage Flexible Generation BaU 25% Volume of the market for flexible balancing technologies >£60b 2010 2020 2030+ “Understanding balancing challenge”, Imperial College, 2012 6

Whole System Approach to Valuing Flexible Options - Time and Location effects Generation, ¡ Long-­‑term ¡ Day-­‑ahead ¡ Transmission ¡& ¡ Generation ¡ Generation, ¡ System ¡ Balancing Distribution ¡ and ¡Storage ¡ Storage ¡& ¡DSR ¡ Planning Scheduling Scheduling One ¡day ¡to ¡one ¡ Years ¡before ¡ Actual ¡delivery: ¡physical ¡ Months ¡to ¡days ¡ hour ¡before ¡ delivery generation ¡& ¡ before ¡delivery delivery consumption Whole-system modelling critical for capturing Adequacy Arbitrage Reserve ¡& ¡Response Time and Location interactions (1) Do we understand the Demand-­‑Side ¡ Flexible ¡ competitiveness and Response Generation synergies between Increasing ¡asset ¡utilisation ¡and ¡ alternative flexible efficiency ¡of ¡system ¡balancing technologies? (2) Is the market design Network Storage efficient? 7

Value of Energy Storage across time in renewable scenario Cost of storage £/kw Cost of storage £/kw Cost of storage £/kw Cost of storage £/kw 1110 750 410 5000 2000 1000 12500 2500 1000 2050 2015 2030 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 8 ¡ GRID, Vol: 5, Pages: 1098-1109

Storage design parameters How important is How big the energy storage efficiency? tank should be? ! “Strategic Assessment of the Role and Value of Energy Storage Systems 9 ¡ in the UK Low Carbon Energy Future”, Imperial College, 2012

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 10 ¡

Ope perating pa patterns and technology de degradatio gradation n Distributed Bulk 11 ¡

Quantifying the value of storage: Stochastic or Deterministic? 12 ¡

Investment in generation flexibility ? System value of enhanced How about the value flexibility of CCGTs will be to investors? 13 ¡ significant

Energy: From the Grid to Consumers Flexibility: From Consumers to the Grid Generation Transmission Distribution Demand Flexible Prosumers Energy Flexibility Separated G&T&D? Value today: £3 Business model? Value in 2030: >£80 14 ¡

Electrifying transport sector: value of smart charging OPEX Generation ¡CAPEX 250 Transmission ¡CAPEX Distribution ¡CAPEX Additional ¡cost ¡to ¡supply ¡EV ¡demand ¡ 200 Carbon ¡emissions ¡from ¡supplying ¡EVs ¡(gCO 2 /km) 40 30 150 (€/EV/year) DE-­‑DK 20 Spain 100 10 Italy UK-­‑RI 50 0 -­‑10 0 BaU Smart ¡sched. Fully ¡smart BaU Smart ¡timing Fully ¡smart 15 ¡

Reduced system inertia – opportunity for fast responsive technologies 5000 Value of frequency response (£/kW) 4000 3000 2000 1000 0 2015 2030 2020 Stochastic Unit Commitment with with inertia and frequency regulation endogenously modelled 16 ¡

Can smart refrigerators displace power stations ? ? + = Load per fridge (p.f) Demand 60Gw 100% Refigerators, step 1.320GW ramp 0 50.2 55 ...but the beer is 10 s 10 mins 600 DDC 50.0 Cost savings per fridge (£/appl) No DDC getting warm! 50 500 RES2050 Frequency control (Hz) NUC2050 400 45 Load p.f. (W) RES2030 300 NUC2030 40 49.2 RES2050W 200 fridges are supporting NUC2050W 35 100 RES2030W the system NUC2030W 0 30 CUR2011 25% 50% 75% 100% DD penetration 25 ! 17 ¡ 0 20 40 60 80 100 120 140 160 180 Time (min)

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 18 ¡ SYSTEMS, Vol: 28, Pages: 3658-3666

Using demand side response to provide local network management services or balancing services at a national level Whole-system or network centric approach? 19 ¡

Example of Flexible generation: competition with other technologies 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 For high cost of flexibility installed in SE&W region (GH), build ~10 GW 20 20

Complexity of distributed energy storage and demand response: Split benefits Balancing Network services services Can the market facilitate this? DSR and storage - industry business model? 21 ¡

Integrated heat and electricity model Heat HEAT NETWORK STORAGE CHP HP ELECTRICITY NETWORK Electricity t

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 Steam ¡ Natural ¡gas methane ¡ Tanker ¡truck Tanker ¡truck reforming Steam ¡Methane ¡ Fuelling Tanker ¡truck Tanker ¡truck Natural ¡gas stations Reforming (liquid) Liquid ¡ Railway ¡ Liquid Railway ¡ Coal ¡ hydrogen tanker ¡car hydrogen ¡ tanker ¡car Fuelling ¡station Coal gasification storage Liquid ¡H 2 Railway ¡tanker ¡car Railway ¡tanker ¡car Coal ¡gasification Coal storage Gaseous ¡ Biomass ¡ Compressed ¡ Hydrogen Biomass gasification Tube ¡trailer hydrogen ¡gas ¡ Tube ¡trailer storage Fuelling Gaseous ¡H 2 Railway ¡tube ¡car Biomass ¡gasification Tube ¡trailer stations Biomass (gas) storage Railway ¡ Railway ¡ tube ¡car tube ¡car Fuelling ¡station Electricity Electrolysis Railway ¡tube ¡car Tube ¡trailer Electrolysis Electricity Spatial element: Great Britain represented by 34 108 × 108 km 2 square cells Temporal dynamic model with 4 to 6-hr periods in a day

Dealing with uncertainty in future development: Option value flexibility ? ? North Sea Grid: strategic versus Significant value in investing in incremental: savings flexibility to deal with uncertainty € 25bn and € 75bn 25 I Konstantelos, G Strbac, 2014, “Valuation of Flexible Transmission Investment Options Under Uncertainty, , IEEE TRANSACTIONS ON POWER SYSTEMS, Vol: 28, Pages: 3658-3666