Modelling Electricity Supply And Demand Under New Market Designs

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Modelling Electricity Supply And Demand Under New Market Designs

Transcript Of Modelling Electricity Supply And Demand Under New Market Designs

Paula Ferreira
University of Minho, ALGORITMI Research Centre
[email protected]

I. Challenges for electricity planning I.1 New market design
II. Electricity scenarios modelling II.1 Generation and transmission planning II.2 Demand and supply planning
III. Summary and avenues for further research


Transition towards a low-carbon economy

New approaches to electricity planning

Growing role for renewable energy sources.
Electrification of transport and other sectors trend.
Increasing role of the consumers: Demand response Prosumers

New electricity market regulations
Adaptation of technical infrastructures and appliances
New business models towards lowcarbon technologies

Security of supply Costs for households and industry under control
Public acceptance


The increasing share of distributed and variable renewables (solar, wind) can lead to: new transmission capacity requirements, higher prices for households, low prices in the wholesale market

Further electrification of the economy leads to rising electricity demand.
Need to improve electricity transmission within Member States and interconnections between them.

The increasing number of prosumers can lead to demand reduction and decreased revenues for grid operators, which can lead to higher prices for consumers.

Innovative business models in electricity markets (energy service companies, virtual power plants – aggregators)

Time-variant pricing could give consumers an incentive demand response

Technological developments, such as smart appliances and smart grids, electricity storage, electric vehicles

Source: adapted from European Parliament (2016)

New market design

Diversification (security of supply);
Environmental impacts (energy efficiency, renewables, new technologies – RES, CCS…);
Competitiveness (low prices + internal energy resources + smart energy management)
Human interaction becomes a large part of the system – “prosumer” (V2G, RES…);
Social acceptance and consumer engagement in the system (and market)
ICT is a crucial element for data management;
“Smart energy” products, services, businesses …

The grid of the (very near) future

New market design

Proposal for a Regulation of the European Parliament and of the Council on the internal market for electricity (November 2016)


New energy market design



Demand response

 New market opportunities and increased competition on retail markets.  Aggregation of generation and demand to enable consumers and small businesses to
participate in the market.  Remove barriers to cross-border electricity flows and cross-border transactions.  Encourage regional cooperation, allow for progress in research and development,
enable the efficient dispatch of generation and demand response.  Promote liquid short-term markets and long-term price signals.  (…)
Electricity scenarios modelling

Electricity scenarios modelling
Some key aspects
 Electricity system is more than a collection of interlinked technologies and stages. The dynamics across the electricity value chain must be considered – “co-optimization”;
 Planning across time scales to account for short term dynamics of renewable generation and long term perspectives;
 Flexibility as requisite for RES systems: flexible generation, storage, demand response and interconnection (Verzijlbergh et al, 2017).
 Understanding and modelling energy-related behavior and consumers participation in the electricity market.

Generation and transmission planning
Generation and transmission are two main components of the power systems and different models and approaches have been used to design and evaluate their expansion possibilities.
The generation expansion planning (GEP) and transmission expansion planning (TEP) problems are frequently addressed separately:
 independent complex mathematical models;
 solutions that may not be optimal from an integrated power systems perspective even under free market conditions.

Generation and transmission planning
TEP has typically been addressed by a reactive approach, where the transmission planner responds to committed generation expansion projects.
Co-optimization with GEP can bring considerable economic benefits to the power system while considering the reliability of the system for high RES shares.

Unbundled environment
“transmission planning accounting for market response” or “anticipatory transmission planning.”



Generation and transmission planning
Although various co-optimization tools already exist, the demonstration of advanced co-optimization methods for long-term planning of power system using detailed regional data in a realistic setting and integrating relevant uncertainties at operational time frame, is still missing (Krishna et al, 2016).
Co-optimization can benefit the planning processes of states and Planning Coordinators regardless of market structure or regulatory regime.
Anticipatory transmission planning is a use of co-optimization to evaluate network investments while considering how generation decisions, both dispatch and investment, will respond to changes in transmission capacity, access, and congestion.
Liu et al (2013)