Renewable energy in North Africa: Modeling of future electricity scenarios and the impact on manufacturing and employment

The transition of the North African electricity system towards renewable energy technologies is analyzed in this thesis. Large potentials of photovoltaics (PV), concentrating solar power (CSP) and onshore wind power provide the opportunity to achieve a long-term shift from conventional power sources to a highly interconnected and sustainable electricity system based on renewable energy sources (RES). A multi-dimensional analysis evaluates the economic and technical effects on the electricity market as well as the socio-economic impact on manufacturing and employment caused by the large deployment of renewable energy technologies. The integration of renewable energy (RE) into the electricity system is modeled in a linear optimization model RESlion which minimizes total system costs of the long-term expansion planning and the hourly generation dispatch problem. With this model, the long-term portfolio mix of technologies, their site selection, required transmission capacities and the hourly operation are analyzed. The focus is set on the integration of renewable energy in the electricity systems of Morocco, Algeria, Tunisia, Libya and Egypt with the option to export electricity to Southern European countries. The model results of RESlion show that a very equal portfolio mix consisting of PV, CSP and onshore wind power is optimal in long-term scenarios for the electricity system. Until the year 2050, renewable energy sources dominate with over 70% the electricity generation due to their cost competiveness to conventional power sources. In the case of flexible and dispatchable electricity exports to Europe, all three RE technologies are used by the model at a medium cost perspective. The socio-economic impact of the scenarios is evaluated by a decision model (RETMD) for local manufacturing and job creation in the renewable energy sector which is developed by incorporating findings from expert interviews in the RE industry sector. The electricity scenarios are assessed regarding their potential to create local economic impact and local jobs in manufacturing RE components and constructing RE power plants. With 40,000 to 100,000 new jobs in the RE sector of North African countries, scenarios with substantial RE deployment can provide enormous benefits to the labor market and lead to additional economic growth. The deployment of renewable energy sources in North Africa is consequently accelerated and facilitated by finding a trade-off between an optimal technology portfolio from an electricity system perspective and the opportunities through local manufacturing. By developing two model approaches for evaluating the effects of renewable energy technologies in the electricity system and in the industrial sector, this thesis contributes to the literature on energy economics and energy policy for the large-scale integration of renewable energy in North Africa.:Abstract iii Acknowledgement iv Table of contents v List of tables ix List of figures xii List of abbreviations xvi 1 Introduction 1 1.1 Renewable energy in North Africa 2 1.2 Research questions and aim of this thesis 3 1.2.1 Modeling of electricity systems 4 1.2.2 Modeling of manufacturing and employment impact 6 1.2.3 Optimal renewable energy scenarios 6 1.3 Related research 7 1.4 Structure of thesis 7 2 Modeling fundamentals for electricity systems with renewable energy sources 9 2.1 Energy system modeling 9 2.2 Electricity models 16 2.2.1 Classifications and taxonomy 17 2.2.2 Differences between operation models and planning models 20 2.2.3 Typical modeling approaches 21 2.3 Optimization models 23 2.3.1 Basic model structure 23 2.3.2 Objective functions of electricity models 24 2.3.3 Technical aspects of electricity systems as models constraints 26 2.3.4 Combining different objectives in energy scenarios 27 2.4 Models for high shares of renewable energy 28 2.5 Models for North African electricity systems 31 2.6 Conclusions for model development 34 3 Electricity system of North Africa 36 3.1 Market structure 36 3.2 National targets for renewable energy 40 3.2.1 Morocco 40 3.2.2 Algeria 41 3.2.3 Tunisia 42 3.2.4 Libya 42 3.2.5 Egypt 43 3.3 Long-term development of electricity demand 44 3.4 Electricity exports to Europe 47 3.5 Geopolitical risks for the electricity system 51 4 Development of the electricity market model RESlion 53 4.1 Model requirements and modeling goals 53 4.2 Modeling of renewable energy technologies 56 4.2.1 Onshore wind power plants and wind resources 59 4.2.2 PV power plants and solar resources 61 4.2.3 CSP plants and solar resources 63 4.2.4 Hydro power plants and energy storage systems 65 4.3 General model approach of RESlion 65 4.4 Model description of RESlion 69 4.4.1 Introduction to the model structure 69 4.4.2 Temporal coverage 70 4.4.3 Objective function 72 4.4.4 Technology independent model constraints 74 4.4.5 Regional electricity exchange: Transmission lines 76 4.4.6 Renewable energy technologies 78 4.4.7 Hydro and storage power plants 80 4.4.8 Uncertainty of input parameters and assumptions 81 4.5 Modeling of expansion planning 83 4.6 Modeling of detailed hourly generation dispatch 83 4.7 Extension options to a Mixed Integer Linear Programming model 84 4.8 Solver selection and implementation environment 85 5 Model-based analysis of future electricity scenarios for North Africa 86 5.1 Scenario assumptions 86 5.2 Scenario definition 89 5.3 Technical and economic input data 94 5.4 Model adjustment 99 5.4.1 Electricity generation in reference year 2010 99 5.4.2 Testing of results with detailed hourly generation dispatch 100 5.5 Electricity scenarios for North Africa by 2050 102 5.5.1 Development of the generation system 102 5.5.2 System and generation costs 106 5.5.3 Site selection of RES generation capacities 108 5.5.4 Regional transmission lines 114 5.5.5 Energy storage systems 118 5.5.6 Technology specific generation 119 5.5.7 CO2 emissions 126 5.6 Sensitivity analyses 126 5.6.1 Adaption of market conditions: Split of electricity markets 127 5.6.2 Technology focus 127 5.6.3 Adaption of cost trends for fossil fuels, transmission lines and storage systems 129 5.7 Technology specific findings for CSP, PV and wind power 131 5.7.1 Typical sites and locations for electricity generation from RES 131 5.7.2 Influence of wind speeds and solar irradiation 131 5.7.3 Interactions with conventional power plants 132 5.8 Electricity scenarios with export to Europe 133 5.9 Discussion of RESlion model and its results 139 6 Model development for socio-economic impact analysis 142 6.1 The idea of combining a cost-optimized electricity system with a socio-economic analysis 142 6.2 Literature review and terminology 145 6.3 Data acquisition and further studies 148 6.4 Model description of RETMD 151 6.4.1 Model objectives 151 6.4.2 Model structure and decision modeling 152 6.4.3 Model limitations and uncertainties 156 6.5 Data input of RETMD 157 6.5.1 Construction of reference power plants 157 6.5.2 Operation of reference power plants 159 6.5.3 Status quo of local manufacturing in recent RE projects 160 6.6 Sensitivity of RETMD on market size and know-how 161 6.7 Discussion of model achievements 163 7 Manufacturing and employment impact of optimized electricity scenarios 165 7.1 Demand scenarios for the RE markets from 2012 to 2030 165 7.2 Economic impact and employment creation 166 7.3 Technology specific development of local manufacturing 168 7.4 Country specific development of local manufacturing 172 7.5 Potentials of local manufacturing in each scenarios 174 7.6 Local economic impact 176 7.7 Local employment impact 177 7.8 Evaluation of scenario results 181 7.9 Electricity system analysis and RE manufacturing: Results and discussion of the combined analysis 183 8 Conclusions and outlook 186 8.1 Conclusion on model developments 186 8.2 Conclusion on renewable energy in North Africa 187 8.3 Outlook and further research 189 9 Bibliography 191 10 Appendix 21

Renewable energy in North Africa: Modeling of future electricity scenarios and the impact on manufacturing and employment

The transition of the North African electricity system towards renewable energy technologies is analyzed in this thesis. Large potentials of photovoltaics (PV), concentrating solar power (CSP) and onshore wind power provide the opportunity to achieve a long-term shift from conventional power sources to a highly interconnected and sustainable electricity system based on renewable energy sources (RES). A multi-dimensional analysis evaluates the economic and technical effects on the electricity market as well as the socio-economic impact on manufacturing and employment caused by the large deployment of renewable energy technologies. The integration of renewable energy (RE) into the electricity system is modeled in a linear optimization model RESlion which minimizes total system costs of the long-term expansion planning and the hourly generation dispatch problem. With this model, the long-term portfolio mix of technologies, their site selection, required transmission capacities and the hourly operation are analyzed. The focus is set on the integration of renewable energy in the electricity systems of Morocco, Algeria, Tunisia, Libya and Egypt with the option to export electricity to Southern European countries. The model results of RESlion show that a very equal portfolio mix consisting of PV, CSP and onshore wind power is optimal in long-term scenarios for the electricity system. Until the year 2050, renewable energy sources dominate with over 70% the electricity generation due to their cost competiveness to conventional power sources. In the case of flexible and dispatchable electricity exports to Europe, all three RE technologies are used by the model at a medium cost perspective. The socio-economic impact of the scenarios is evaluated by a decision model (RETMD) for local manufacturing and job creation in the renewable energy sector which is developed by incorporating findings from expert interviews in the RE industry sector. The electricity scenarios are assessed regarding their potential to create local economic impact and local jobs in manufacturing RE components and constructing RE power plants. With 40,000 to 100,000 new jobs in the RE sector of North African countries, scenarios with substantial RE deployment can provide enormous benefits to the labor market and lead to additional economic growth. The deployment of renewable energy sources in North Africa is consequently accelerated and facilitated by finding a trade-off between an optimal technology portfolio from an electricity system perspective and the opportunities through local manufacturing. By developing two model approaches for evaluating the effects of renewable energy technologies in the electricity system and in the industrial sector, this thesis contributes to the literature on energy economics and energy policy for the large-scale integration of renewable energy in North Africa.:Abstract iii Acknowledgement iv Table of contents v List of tables ix List of figures xii List of abbreviations xvi 1 Introduction 1 1.1 Renewable energy in North Africa 2 1.2 Research questions and aim of this thesis 3 1.2.1 Modeling of electricity systems 4 1.2.2 Modeling of manufacturing and employment impact 6 1.2.3 Optimal renewable energy scenarios 6 1.3 Related research 7 1.4 Structure of thesis 7 2 Modeling fundamentals for electricity systems with renewable energy sources 9 2.1 Energy system modeling 9 2.2 Electricity models 16 2.2.1 Classifications and taxonomy 17 2.2.2 Differences between operation models and planning models 20 2.2.3 Typical modeling approaches 21 2.3 Optimization models 23 2.3.1 Basic model structure 23 2.3.2 Objective functions of electricity models 24 2.3.3 Technical aspects of electricity systems as models constraints 26 2.3.4 Combining different objectives in energy scenarios 27 2.4 Models for high shares of renewable energy 28 2.5 Models for North African electricity systems 31 2.6 Conclusions for model development 34 3 Electricity system of North Africa 36 3.1 Market structure 36 3.2 National targets for renewable energy 40 3.2.1 Morocco 40 3.2.2 Algeria 41 3.2.3 Tunisia 42 3.2.4 Libya 42 3.2.5 Egypt 43 3.3 Long-term development of electricity demand 44 3.4 Electricity exports to Europe 47 3.5 Geopolitical risks for the electricity system 51 4 Development of the electricity market model RESlion 53 4.1 Model requirements and modeling goals 53 4.2 Modeling of renewable energy technologies 56 4.2.1 Onshore wind power plants and wind resources 59 4.2.2 PV power plants and solar resources 61 4.2.3 CSP plants and solar resources 63 4.2.4 Hydro power plants and energy storage systems 65 4.3 General model approach of RESlion 65 4.4 Model description of RESlion 69 4.4.1 Introduction to the model structure 69 4.4.2 Temporal coverage 70 4.4.3 Objective function 72 4.4.4 Technology independent model constraints 74 4.4.5 Regional electricity exchange: Transmission lines 76 4.4.6 Renewable energy technologies 78 4.4.7 Hydro and storage power plants 80 4.4.8 Uncertainty of input parameters and assumptions 81 4.5 Modeling of expansion planning 83 4.6 Modeling of detailed hourly generation dispatch 83 4.7 Extension options to a Mixed Integer Linear Programming model 84 4.8 Solver selection and implementation environment 85 5 Model-based analysis of future electricity scenarios for North Africa 86 5.1 Scenario assumptions 86 5.2 Scenario definition 89 5.3 Technical and economic input data 94 5.4 Model adjustment 99 5.4.1 Electricity generation in reference year 2010 99 5.4.2 Testing of results with detailed hourly generation dispatch 100 5.5 Electricity scenarios for North Africa by 2050 102 5.5.1 Development of the generation system 102 5.5.2 System and generation costs 106 5.5.3 Site selection of RES generation capacities 108 5.5.4 Regional transmission lines 114 5.5.5 Energy storage systems 118 5.5.6 Technology specific generation 119 5.5.7 CO2 emissions 126 5.6 Sensitivity analyses 126 5.6.1 Adaption of market conditions: Split of electricity markets 127 5.6.2 Technology focus 127 5.6.3 Adaption of cost trends for fossil fuels, transmission lines and storage systems 129 5.7 Technology specific findings for CSP, PV and wind power 131 5.7.1 Typical sites and locations for electricity generation from RES 131 5.7.2 Influence of wind speeds and solar irradiation 131 5.7.3 Interactions with conventional power plants 132 5.8 Electricity scenarios with export to Europe 133 5.9 Discussion of RESlion model and its results 139 6 Model development for socio-economic impact analysis 142 6.1 The idea of combining a cost-optimized electricity system with a socio-economic analysis 142 6.2 Literature review and terminology 145 6.3 Data acquisition and further studies 148 6.4 Model description of RETMD 151 6.4.1 Model objectives 151 6.4.2 Model structure and decision modeling 152 6.4.3 Model limitations and uncertainties 156 6.5 Data input of RETMD 157 6.5.1 Construction of reference power plants 157 6.5.2 Operation of reference power plants 159 6.5.3 Status quo of local manufacturing in recent RE projects 160 6.6 Sensitivity of RETMD on market size and know-how 161 6.7 Discussion of model achievements 163 7 Manufacturing and employment impact of optimized electricity scenarios 165 7.1 Demand scenarios for the RE markets from 2012 to 2030 165 7.2 Economic impact and employment creation 166 7.3 Technology specific development of local manufacturing 168 7.4 Country specific development of local manufacturing 172 7.5 Potentials of local manufacturing in each scenarios 174 7.6 Local economic impact 176 7.7 Local employment impact 177 7.8 Evaluation of scenario results 181 7.9 Electricity system analysis and RE manufacturing: Results and discussion of the combined analysis 183 8 Conclusions and outlook 186 8.1 Conclusion on model developments 186 8.2 Conclusion on renewable energy in North Africa 187 8.3 Outlook and further research 189 9 Bibliography 191 10 Appendix 21

Potential and Feasibility Study of Hybrid Wind−Hydroelectric Power System with Water-Pumping Storage: Jordan as a Case Study

Periodic daily fluctuating demand for energy and power is a perceptible phenomenon, resulting in some moments of low demand for power and energy related to the huge energy comes from renewable energy systems, and some moments of peak load demand. This phenomenon, when combined with the non-stationary operation of huge capacity of renewable energy systems, results in no stability of voltage and frequency. To assure continuous network stability and to avoid energy losses from renewable energy systems that are subject to such control system, a hybrid system with energy–power storage in the form of pumped-hydro storage is considered the most suitable technically. This paper presents the design, modeling, analysis, and feasibility study of a hybrid wind and water-pumping storage system. The system was designed and analyzed for King Talal Dam (KTD), which is in Northern Jordan. The importance of this study is that it is directed mainly to Jordan and the Middle East and North Africa (MENA) region in general. The Jordanian renewable energy market is a promising arena that encourages developers, investors, engineers, and companies to develop and install pure renewable energy systems and renewable energy hybrid projects for the generation of electricity. The analysis of wind data is carried out using the “windfarm” software with 5.16 m/s as average wind speed. It is followed by the design of the hybrid system, which is simulated for a daily operation of 2–3 h as peak load hours. Based on the technical outcomes, cost study and feasibility analyses are carried out with Jordanian market prices. The total estimated annual energy production is 26,663,933 kWh from 10 MW wind farm and 5.2 MW pumping storage system. The aforementioned studies showed that a similar hybrid system is not always fully commercially feasible. However, a pure pumped-storage system proved to be technically feasible and assisting the grid. The whole project analysis determines that such a system boosts the operational stability of the grid, increases the penetration of renewable energy systems and reduces the energy import. In addition, 15,100,000 tons of CO2-equivalent is estimated as annual emissions reduction in this study.DFG, 414044773, Open Access Publizieren 2019 - 2020 / Technische Universität Berli

Dynamic Modelling and Techno-Economic Assessment of a Compressed Heat Energy Storage System: Application in a 26-MW Wind Farm in Spain

[EN] One of the main challenges for a further integration of renewable energy sources in the electricity grid is the development of large-scale energy storage systems to overcome their intermittency. This paper presents the concept named CHEST (Compressed Heat Energy STorage), in which the excess electricity is employed to increase the temperature of a heat source by means of a high-temperature heat pump. This heat is stored in a combination of latent and sensible heat storage systems. Later, the stored heat is used to drive an organic Rankine cycle, and hereby to produce electricity when needed. A novel application of this storage system is presented by exploring its potential integration in the Spanish technical constraints electricity market. A detailed dynamic model of the proposed CHEST system was developed and applied to a case study of a 26-MW wind power plant in Spain. Different capacities of the storage system were assessed for the case under study. The results show that roundtrip efficiencies above 90% can be achieved in all the simulated scenarios and that the CHEST system can provide from 1% to 20% of the total energy contribution of the power plant, depending on its size. The CHEST concept could be economically feasible if its capital expenditure (CAPEX) ranges between 200 and 650 k€/MWThis work has been partially funded by the grant agreement No. 764042 (CHESTER project) of the European Union's Horizon 2020 research and innovation program.Sánchez Canales, V.; Payá-Herrero, J.; Corberán, JM.; Hassan, A. (2020). Dynamic Modelling and Techno-Economic Assessment of a Compressed Heat Energy Storage System: Application in a 26-MW Wind Farm in Spain. Energies. 13(18):1-18. https://doi.org/10.3390/en13184739S1181318Nikolaou, T., Stavrakakis, G. S., & Tsamoudalis, K. (2020). Modeling and Optimal Dimensioning of a Pumped Hydro Energy Storage System for the Exploitation of the Rejected Wind Energy in the Non-Interconnected Electrical Power System of the Crete Island, Greece. Energies, 13(11), 2705. doi:10.3390/en13112705Shi, J., Yang, Y., & Deng, Z. (2009). A reliability growth model for 300 MW pumped-storage power units. Frontiers of Energy and Power Engineering in China, 3(3), 337-340. doi:10.1007/s11708-009-0032-yArgyrou, M. C., Christodoulides, P., & Kalogirou, S. A. (2018). Energy storage for electricity generation and related processes: Technologies appraisal and grid scale applications. Renewable and Sustainable Energy Reviews, 94, 804-821. doi:10.1016/j.rser.2018.06.044Jockenhöfer, H., Steinmann, W.-D., & Bauer, D. (2018). Detailed numerical investigation of a pumped thermal energy storage with low temperature heat integration. Energy, 145, 665-676. doi:10.1016/j.energy.2017.12.087Steinmann, W.-D. (2017). Thermo-mechanical concepts for bulk energy storage. Renewable and Sustainable Energy Reviews, 75, 205-219. doi:10.1016/j.rser.2016.10.065Thess, A. (2013). Thermodynamic Efficiency of Pumped Heat Electricity Storage. Physical Review Letters, 111(11). doi:10.1103/physrevlett.111.110602Guo, J., Cai, L., Chen, J., & Zhou, Y. (2016). Performance optimization and comparison of pumped thermal and pumped cryogenic electricity storage systems. Energy, 106, 260-269. doi:10.1016/j.energy.2016.03.053Attonaty, K., Stouffs, P., Pouvreau, J., Oriol, J., & Deydier, A. (2019). Thermodynamic analysis of a 200 MWh electricity storage system based on high temperature thermal energy storage. Energy, 172, 1132-1143. doi:10.1016/j.energy.2019.01.153Frate, G. F., Antonelli, M., & Desideri, U. (2017). A novel Pumped Thermal Electricity Storage (PTES) system with thermal integration. Applied Thermal Engineering, 121, 1051-1058. doi:10.1016/j.applthermaleng.2017.04.127Mateu-Royo, C., Mota-Babiloni, A., Navarro-Esbrí, J., Peris, B., Molés, F., & Amat-Albuixech, M. (2019). Multi-objective optimization of a novel reversible High-Temperature Heat Pump-Organic Rankine Cycle (HTHP-ORC) for industrial low-grade waste heat recovery. Energy Conversion and Management, 197, 111908. doi:10.1016/j.enconman.2019.111908Benato, A. (2017). Performance and cost evaluation of an innovative Pumped Thermal Electricity Storage power system. Energy, 138, 419-436. doi:10.1016/j.energy.2017.07.066Benato, A., & Stoppato, A. (2019). Integrated Thermal Electricity Storage System: Energetic and cost performance. Energy Conversion and Management, 197, 111833. doi:10.1016/j.enconman.2019.111833Maximov, S., Harrison, G., & Friedrich, D. (2019). Long Term Impact of Grid Level Energy Storage on Renewable Energy Penetration and Emissions in the Chilean Electric System. Energies, 12(6), 1070. doi:10.3390/en12061070Steinmann, W. D. (2014). The CHEST (Compressed Heat Energy STorage) concept for facility scale thermo mechanical energy storage. Energy, 69, 543-552. doi:10.1016/j.energy.2014.03.049Hu, B., Wu, D., Wang, L. W., & Wang, R. Z. (2017). Exergy analysis of R1234ze(Z) as high temperature heat pump working fluid with multi-stage compression. Frontiers in Energy, 11(4), 493-502. doi:10.1007/s11708-017-0510-6He, Y.-L., Wang, R., Roskilly, A. P., & Li, P. (2017). Efficient use of waste heat and solar energy: Technologies of cooling, heating, power generation and heat transfer. Frontiers in Energy, 11(4), 411-413. doi:10.1007/s11708-017-0525-zHassan, A. H., O’Donoghue, L., Sánchez-Canales, V., Corberán, J. M., Payá, J., & Jockenhöfer, H. (2020). Thermodynamic analysis of high-temperature pumped thermal energy storage systems: Refrigerant selection, performance and limitations. Energy Reports, 6, 147-159. doi:10.1016/j.egyr.2020.05.010Steinmann, W.-D., Bauer, D., Jockenhöfer, H., & Johnson, M. (2019). Pumped thermal energy storage (PTES) as smart sector-coupling technology for heat and electricity. Energy, 183, 185-190. doi:10.1016/j.energy.2019.06.058Pereira da Cunha, J., & Eames, P. (2016). Thermal energy storage for low and medium temperature applications using phase change materials – A review. Applied Energy, 177, 227-238. doi:10.1016/j.apenergy.2016.05.097Cecchinato, L. (2010). Part load efficiency of packaged air-cooled water chillers with inverter driven scroll compressors. Energy Conversion and Management, 51(7), 1500-1509. doi:10.1016/j.enconman.2010.02.008The Turbocor Family of Compressors Model TT300, Danfoss TURBOCOR. Datasheetwww.turbocor.com,USAPalkowski, C., Zottl, A., Malenkovic, I., & Simo, A. (2019). Fixing Efficiency Values by Unfixing Compressor Speed: Dynamic Test Method for Heat Pumps. Energies, 12(6), 1045. doi:10.3390/en12061045Estadísticas del Sistema Eléctrico | Red Eléctrica de Españahttps://www.ree.es/es/estadisticas-del-sistema-electrico/3015/3001OMIP Operador del Mercado Ibérico de Energía—Polo Portuguéshttps://www.omip.pt/El Mercado de Restricciones Técnicashttp://mifacturadeluz.com/mercado-de-restricciones-tecnicas/Puerto Escandón (España)—Parques eólicos—Acceso en línea—The Wind Powerhttps://www.thewindpower.net/windfarm_es_2253_puerto-escandon.phpFederico Bava DS D2.1 Case studies: User Requirements and Boundary Conditions Definition. CHESTERhttps://www.chester-project.eu/wp-content/uploads/2018/11/CHESTER_D2.1_Case-Studies_v5.0.pdfEstado actual de la energía termosolar (CSP)—HELIONOTICIAShttp://helionoticias.es/estado-actual-de-la-energia-termosolar-csp/Gallo, A. B., Simões-Moreira, J. R., Costa, H. K. M., Santos, M. M., & Moutinho dos Santos, E. (2016). Energy storage in the energy transition context: A technology review. 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An Integrated Market for Electricity and Natural Gas Systems with Stochastic Power Producers

In energy systems with high shares of weather-driven renewable power sources, gas-fired power plants can serve as a back-up technology to ensure security of supply and provide short-term flexibility. Therefore, a tighter coordination between electricity and natural gas networks is foreseen. In this work, we examine different levels of coordination in terms of system integration and time coupling of trading floors. We propose an integrated operational model for electricity and natural gas systems under uncertain power supply by applying two-stage stochastic programming. This formulation co-optimizes day-ahead and real-time dispatch of both energy systems and aims at minimizing the total expected cost. Additionally, two deterministic models, one of an integrated energy system and one that treats the two systems independently, are presented. We utilize a formulation that considers the linepack of the natural gas system, while it results in a tractable mixed-integer linear programming (MILP) model. Our analysis demonstrates the effectiveness of the proposed model in accommodating high shares of renewables and the importance of proper natural gas system modeling in short-term operations to reveal valuable flexibility of the natural gas system. Moreover, we identify the coordination parameters between the two markets and show their impact on the system's operation and dispatch

Strategic Capacity Withholding by Energy Storage in Electricity Markets

Abstract: Although previous work has demonstrated the ability of large energy storage (ES) units to exercise market power by withholding their capacity, it has adopted modeling approaches exhibiting certain limitations and has not analyzed the dependency of the extent of exercised market power on ES operating properties. In this paper, the decision making process of strategic ES is modeled through a bi-level optimization problem; the upper level determines the optimal extent of capacity withholding at different time periods, maximizing the ES profit, while the lower level represents endogenously the market clearing process. This problem is solved after converting it to a Mathematical Program with Equilibrium Constraints (MPEC) and linearizing the latter through suitable techniques. Case studies on a test market quantitatively analyze the extent of capacity withholding and its impact on ES profit and social welfare for different scenarios regarding the power and energy capacity of ES

A looming revolution: Implications of self-generation for the risk exposure of retailers. ESRI WP597, September 2018

Managing the risk associated with uncertain load has always been a challenge for retailers in electricity markets. Yet the load variability has been largely predictable in the past, especially when aggregating a large number of consumers. In contrast, the increasing penetration of unpredictable, small-scale electricity generation by consumers, i.e. self-generation, constitutes a new and yet greater volume risk. Using value-at-risk metrics and Monte Carlo simulations based on German historical loads and prices, the contribution of decentralized solar PV self-generation to retailers’ load and revenue risks is assessed. This analysis has implications for the consumers’ welfare and the overall efficiency of electricity markets