Transforming U.S. Energy Innovation

The United States and the world need a revolution in energy technology—a revolution that would improve the performance of our energy systems to face the challenges ahead. A dramatic increase in the pace of energy innovation is crucial to meet the challenges of: • Energy and national security, to address the dangers of undue reliance on dwindling supplies of oil increasingly concentrated in some of the most volatile regions of the world, and to limit the connection between nuclear energy and the spread of nuclear weapons; • Environmental sustainability, to reduce the wide range of environmental damages due to energy production and use, from fine particulate emissions at coal plants, to oil spills, to global climate disruption; and • Economic competitiveness, to seize a significant share of the multi-trillion-dollar clean energy technology market and improve the balance of payments by increasing exports, while reducing the hundreds of billions of dollars spent every year on importing oil. In an intensely competitive and interdependent global landscape, and in the face of large climate risks from ongoing U.S. reliance on a fossil-fuel based energy system, it is important to maintain and expand long-term investments in the energy future of the U.S. even at a time of budget stringency. It is equally necessary to think about how to improve the efficiency of those investments, through strengthening U.S. energy innovation institutions, providing expanded incentives for private-sector innovation, and seizing opportunities where international cooperation can accelerate innovation. The private sector role is key: in the United States the vast majority of the energy system is owned by private enterprises, whose innovation and technology deployment decisions drive much of the country’s overall energy systems. Efficiently utilizing government investments in energy innovation requires understanding the market incentives that drive private firms to invest in advanced energy technologies, including policy stability and predictability. The U.S. government has already launched new efforts to accelerate energy innovation. In particular, the U.S. Department of Energy is undertaking a Quadrennial Technology Review to identify the most promising opportunities and provide increased coherence and stability. Our report offers analysis and recommendations designed to accelerate the pace at which better energy technologies are discovered, developed, and deployed, and is focused in four key areas: • Designing an expanded portfolio of federal investments in energy research, development, demonstration (ERD&D), and complementary policies to catalyze the deployment of novel energy technologies; • Increasing incentives for private-sector innovation and strengthening federal-private energy innovation partnerships; • Improving the management of energy innovation institutions to maximize the results of federal investments; and • Expanding and coordinating international energy innovation cooperation to bring ideas and resources together across the globe to address these global challenges

Investing in the Clean Trillion: Closing the Clean Energy Investment Gap

In 2010 world governments agreed to limit the increase in global temperature to two degrees Celsius (2 °C) above pre-industrial levels to avoid the worst impacts of climate change. To have an 80 percent chance of maintaining this 2 °C limit, the IEA estimates an additional $36 trillion in clean energy investment is needed through 2050 -- or an average of$1 trillion more per year compared to a "business as usual" scenario over the next 36 years.This report provides 10 recommendations for investors, companies and policymakers to increase annual global investment in clean energy to at least $1 trillion by 2030 -- roughly a four-fold jump from current investment levels

Discussion on drivers and proposition of approaches to support the transition of traditional electricity consumers to prosumers

In recent years, traditional power systems have undergone a significant transition, mainly related to the massive penetration of Renewable Energy Sources (RES). More specifically, the transformation of residential consumers into prosumers has been challenging to the traditional operation of electricity markets. This transition brings new challenges and opportunities to the power system, leading to new Business Model (BM). One widely discussed change is related to a consumer-centric or prosumer-driven approach, promoting increased participation of small consumers in power systems. The present thesis aims at discussing the recent BMs as enablers of the increasing prosumers’ role in the energy market and power system worldwide, deepening the discussion with a holistic view of the Brazilian context. To do so, it defines the main features of prosumers and their general related regulation as well as possible market designs within power systems. Moreover, the work intends to contribute to the knowledge, identification and understanding of the main regulatory barriers and enablers for the development of those BMs in the Brazilian energy market. In addition, it discusses enabling technologies to properly create the conditions that sustain new prosumer-driven markets. Then, it presents a comprehensive review of existing and innovative BMs and a discussion on their future roles in modern power systems and, in the Brazilian regulatory framework seeking to guide the decisions for the country to develop its political and regulatory environment in the future. Moreover, a set of recommendations for promoting these BMs in the power system worldwide is provided along with policy recommendations to promote prosumers aggregation in the Brazilian energy sector. An important conclusion is that, even though economically possible, not all innovative BMs can spread around the world due to regulatory issues. Seeking to further explore one of the prosumer-driven approaches presented and the challenges imposed by this innovative BM, a study of energy and reserve markets based on the Peer-to-Peer (P2P) structure is carried out. This structure is very promising for the prosumers’ promotion but presents some challenges for the network operation. A critical challenge is to ensure that network constraints are not violated due to energy trades between peers and neither due to the use of reserve capacity. Therefore, two methodologies are proposed. First, is proposed a three-step approach (P2PTDF), using Topological Distribution Factors (TDF) to penalize peers responsible for violations that may occur in the network constraints, ensuring a feasible solution. Second, it is proposed a new integrated prosumers-DSO approach applied in P2P energy and reserve tradings that also ensures the feasibility of both energy and reserve transactions under network constraints. The proposed approach includes the estimation of reserve requirements based on the RES uncertain behavior from historical generation data, which allows identifying RES patterns. The proposed models are assessed through a case study that uses a 14-bus system, under the technical and economic criteria. The results show that the approaches can ensure a feasible network operation.Nos últimos anos, os sistemas tradicionais de energia passaram por uma transição significativa, principalmente relacionada à penetração massiva de fontes de energia renováveis (do inglês, Renewable energy sources-RES). Mais especificamente, a transformação de consumidores residenciais em prosumidores tem desafiado a atual operação do mercado de energia elétrica. Essa transição traz novos desafios e oportunidades para o sistema elétrico, levando a novos modelos de negócios (do inglês, Business Models-BM). Uma mudança amplamente discutida está relacionada a uma abordagem centrada no consumidor ou direcionada ao prossumidor, promovendo maior participação de pequenos consumidores nos sistemas de energia. A presente tese tem como objetivo discutir os recentes BMs como facilitadores do crescente papel dos prosumidores no mercado de energia e no sistema elétrico mundial, aprofundando a discussão com uma visão holística do contexto brasileiro. Para tanto, define as principais características dos prosumidores e sua regulamentação geral relacionada, bem como possíveis designs de mercado dentro dos sistemas de energia. Além disso, o trabalho pretende contribuir para o conhecimento, identificação e compreensão das principais barreiras regulatórias e facilitadoras para o desenvolvimento desses BMs no mercado brasileiro de energia. Assim como, discutir as tecnologias importantes para criar adequadamente as condições que sustentam novos mercados orientados ao consumidor final. Em seguida, apresenta uma revisão abrangente dos BMs existentes e inovadores e uma discussão sobre seus papéis futuros nos sistemas de energia modernos e, no quadro regulatório brasileiro, buscando orientar as decisões para que o país desenvolva seu ambiente político e regulatório no futuro. Além disso, um conjunto de recomendações para promover esses BMs no sistema de energia em todo o mundo é fornecido juntamente com recomendações de políticas para promover a agregação de prosumidores no setor de energia brasileiro. Uma conclusão importante é que, mesmo sendo economicamente possível, nem todos os BMs inovadores podem se espalhar pelo mundo devido a obstáculos regulatórias. Buscando explorar ainda mais uma das abordagens orientadas ao prosumidor apresentadas e os desafios impostos por este BM inovador, é realizado um estudo dos mercados de energia e de reserva com base na estrutura ponto a ponto (do inglês, peer-to-peer-P2P). Esta estrutura é muito promissora para a promoção dos prosumidores mas apresenta alguns desafios para o funcionamento da rede. Um desafio crítico é garantir que as restrições da rede não sejam violadas devido a negociações de energia entre pares e nem devido ao uso da capacidade de reserva. Portanto, duas metodologias são propostas. Primeiramente, é proposta uma abordagem em três passos (P2PTDF), utilizando Fatores de Distribuição Topológica (do inglês, Topological Distribution Factors-TDF ) para penalizar os peers responsáveis por violações que possam ocorrer nas restrições da rede, garantindo uma solução viável. Em segundo lugar, é proposta uma nova abordagem integrada de prosumidores-DSO aplicada em transações P2P de energia e reserva que também garante a viabilidade de transações de energia e reserva sob restrições de rede. A abordagem proposta inclui a estimativa dos requisitos de reserva com base no comportamento incerto da RES a partir de dados históricos de geração, o que permite identificar padrões de RES. Os modelos propostos são avaliados através de um estudo de caso que utiliza um sistema de 14 barras, sob os critérios técnico e econômico. Os resultados mostram que as abordagens podem garantir uma operação de rede viável abrangendo energia e mercados de reserva

The Economics of Wholesale Electricity Markets

This dissertation is based on four articles. Chapter 2 is based on Growitsch and Müsgens (2005). In this chapter, we analyze the development of household electricity prices since the liberalization of the market in 1998. The chapter covers all components of the price, the wholesale component, and the transportation and distribution networks. We also discuss the developments of taxes and subsidies in the electricity market. The main result is that the liberalization appears to have had no significant impact on total consumer prices, as prices in 2004 are nearly the same as in 1998. However, a deeper analysis reveals significant differences between the price components: wholesale prices, which are at the focus of the other chapters in this dissertation, decreased significantly directly after the liberalization took place, but increased from 2001 to 2004. The latter effect is discussed in chapter 3. Despite this increase, wholesale prices are still lower in 2004 than they were in 1998. The costs for transportation and distribution networks decreased slightly but steadily over time. The prices of other cost components (Renewable energy act, CHP subsidies, taxes ), however, rose sharply after the liberalization. This result has serious implications, as it means that insubstantial reductions in household prices do not reveal much about the success of liberalization or the behavior of the electricity supply industry. Chapter 3 is based on Müsgens (2007). The chapter presents a model to calculate system marginal costs in electricity markets. The model is a dynamic linear optimization model including start-up costs, hydro storage and pump storage dispatch, and international power exchange in the equations. We apply this model to the German power exchange for the period from June 2000 to June 2003 and perform a competitive benchmarking study. We find that prices are very close to our model-derived competitive benchmark in a first period until August 2001: the difference between prices and benchmark is only 2% in this period. In the following period, observed market prices rise significantly; this rise is not reflected in the competitive benchmark: prices are nearly 50% above the competitive benchmark in this second period. We also show that this deviation mainly comes from the high demand periods in which capacity is scarce. This is in accordance with the theories of market power. Furthermore, the chapter contains several scenarios quantifying the price effects of non-convexities and other dynamic elements. Chapter 4 is based on Müsgens and Neuhoff (2005). As in chapter 3, we present a linear optimization model to determine the optimal dispatch. The model is extended to allow the analysis of the uncertainty brought into the market by wind power generation. We represent uncertainty by applying stochastic programming with recourse. We parameterize the model with historical data from the German power market and find that the short term costs for the integration of wind power are low, as there is sufficient capacity during most periods to provide balancing services. Chapter 5 is based on Kuntz and Müsgens (2005). The chapter presents a formal in-depth analysis of the effects of start-up costs on electricity markets. The chapter starts from a simplified version of the optimization problem in chapter 4. Using appropriate transformations (dualization of the original problem, rephrasing the dual and reconverting it into a modified primal problem), we can prove that the impact of start-up costs on the average price is very small, which was already suggested by the empirical analyses in chapters 3 and 4. Chapter 6 concludes the dissertation

Flexibility services for distribution network operation

On the way towards a low carbon electricity system, flexibility has become one of the main sources for achieving it. Flexibility can be understood as the ability of a power system to cope with the variability and uncertainty of demand and supply. Both the generation-side and the demand-side can provide it. This research is focused on the role of the demand-side flexibility for providing a service to the distribution system operator, who manages the medium and low-voltage network. By activating this flexibility from the demand-side to the distribution network operator, the latter can avoid or mitigate congestions in the network and prevent grid reinforcement. This thesis starts with analyzing the current state of the art in the field of local electricity markets, setting the baseline for flexibility products in power systems. As a result of the previous analysis, the definition of flexibility is developed more specifically, considering the flexible assets to be controlled, the final client using this flexibility and the time horizon for this flexibility provision. Following the previous step, an aggregated flexibility forecast model is developed, considering a flexibility portfolio based on different flexible assets such as electric vehicles, water boilers, and electric space heaters. The signal is then modeled under a system-oriented approach for providing a service to the distribution network operator under the operation timeline on a day-ahead basis. The flexibility required by the distribution network operator is then calculated through an optimization problem, considering the flexibility activation costs and the network power flow constraints. Finally, since this scenario aims to lower the environmental impacts of the power system, its sustainability is assessed with the life-cycle assessment, considering the entire life cycle and evaluating it in terms of greenhouse gas emissions. This approach enhances the analysis of the potential role of flexibility in the power system, quantifying whether, in all cases, there is a reduction of emissions when shifting the consumption from peak hours to non-peak hours.En el camí cap a un sistema elèctric amb baixes emissions de carboni, la flexibilitat s'ha convertit en una de les principals fonts per aconseguir-ho. La flexibilitat es pot entendre com la capacitat d'un sistema de reaccionar davant la variabilitat i la incertesa provocades per la demanda i la generació. Tant la part de la generació com el costat de la demanda tenen actius per a poder proporcionar-ho. La recerca presentada en aquest manuscrit està enfocada en el paper de la flexibilitat oferta per la demanda, per a proporcionar un servei a l'operador del sistema de distribució, que gestiona les xarxes de mitja i baixa tensió. Gràcies a l'activació de la flexibilitat de la demanda, l'operador de les xarxes de distribució pot evitar o mitigar la congestió de la xarxa i evitar-ne les inversions per a reforçar-la, així com el seu impacte ambiental. Aquesta tesi comença amb l'anàlisi de l'estat de l'art en el camp dels mercats d'electricitat locals, establint-ne la línia base per a la definició dels productes de flexibilitat en els sistemes elèctrics. Com a resultat de l'estudi anterior, la definició de flexibilitat es desenvolupa més específicament, considerant els actius flexibles que han de controlar-se, el client final que utilitza aquesta flexibilitat i l'horitzó temporal per a aquesta disposició de flexibilitat. A continuació es desenvolupa un model de predicció de flexibilitat agregada, considerant una cartera de flexibilitat basada en diferents actius flexibles, com ara vehicles elèctrics, calderes d'aigua i escalfadors elèctrics, gestionats per la figura de l’agregador. El senyal es modela sota un enfocament orientat al sistema per proporcionar un servei a l'operador de la xarxa de distribució, per un horitzó temporal corresponent a l'operació de la xarxa de mitja i baixa tensió. El resultat és un model de la flexibilitat que pot oferir l’agregador. Una vegada desenvolupat el model de flexibilitat pel costat de l’agregador, la tesi s’enfoca al càlcul de la flexibilitat requerida per l’operador de la xarxa de distribució. Això es desenvolupa mitjançant un problema d'optimització, tenint en compte els costos d'activació de la flexibilitat, la localització dels punts on s’injectarà la flexibilitat i les restriccions de flux de potència de la xarxa de distribució. Finalment, atès que aquest escenari pretén reduir l'impacte mediambiental del sistema elèctric, la seva sostenibilitat s'avalua considerant tot el cicle de vida de les tecnologies que hi participen, i avaluant-la en termes d'emissions de gasos d'efecte d'hivernacle. L'ús d'aquest enfocament millora l'anàlisi del potencial paper de la flexibilitat en el sistema elèctric, quantificant si, en tots els casos, hi ha una reducció de les emissions traslladant el consum de les hores punta a hores vall.Postprint (published version

Joustotuotteet monenkeskisillä sähkömarkkinoilla

Power grids, electrical systems and liberalized zonal electricity markets are in due for major recasting as the ongoing energy transition impacts the electricity sector profoundly.This will mean new kinds of market behavior in liberalized and regulated electricity markets and increased challenges for TSOs to maintain power balance at system-level. Also, inadequacies in network capacity and flexible asset availability impact at local level. Congestions, voltage deviations and grid outages impact both TSOs and DSOs locally and the mitigation of these situations requires new types of multilateral coordination. In addition to more transmission and distribution grid capacity, future electrical systems need resilient flexible resources and intelligent control mechanisms. This thesis examines market-based control by using flexibility products. The envisioned flexibility products are expected to be implementable in the Baltic Sea area electricity markets during the regulatory period of Finnish electricity network companies beginning in 2024. Thesis includes a literature review and a qualitative empirical research consisting of industry consultation. First, the literature study examines existing products traded on future European electricity markets and other mechanisms that control networks and network connected assets. Secondly, it examines emerging flexibility products that can provide local flexibility services which the existing product structure is not covering. Industry consultation includes Finnish expert views regarding different aspects of flexibility needs,flexibility markets and opinions on the emerging flexibility products. Interviewees found the concepts of flexibility markets and products new and complex. Most of the interviewees had not experienced serious technical flexibility issues at local level in Finnish electrical networks but agreed that local flexibility challenges would be a reality in Finland within next five years. Majority of interviewees saw new enabling technologies and market-based trading of local flexibility worth considering. They had different local needs for flexibility products, if trading could be done cost-efficiently and market design would be supportive for both flexibility buyers and sellers. Outage management and voltage support with flexibility were identified as the most urgent local needs and congestion management was seen less important. According to the findings, numerous although contradictory flexibility product alternatives can solve different flexibility needs. It was concluded that market design should go forward with the development of three options: locational intraday products, locational balancing products and competitive bilateral flexibility contracts. The results show, that these recommended products are modifications of existing products. All three preferred options should be enabled due to different reasons and these options are not mutually exclusive. The compatibility of flexibility products with existing products and operational processes must be ensured, especially considering reconciliation of flexibility markets and a reactive balancing model of TSOs. Development of flexibility products should start immediately with incremental experimentation with cooperation of all network users and operators.Meneillään oleva energiamurros aiheuttaa merkittäviä muutoksia sähköverkkoihin ja-markkinoihin. Tämä johtaa uudenlaiseen käyttäytymiseen vapautetuilla ja säännellyillä sähkömarkkinoilla sekä kantaverkkoyhtiöiden lisääntyviin haasteisiin ylläpitää järjestelmätason tehotasapainoa. Myös alueelliset haasteet lisääntyvät riittämättömän verkkokapasiteetin tai joustavien resurssien puuttuessa. Paikalliset ylikuormitukset, jännite- ja loistehopoikkeamat sekä käyttökatkot voivat vaikuttaa useisiin siirto- ja jakeluverkkoyhtiöihin, jolloin ratkaisut vaativat monenkeskistä koordinointia. Tulevaisuuden sähköjärjestelmät vaativat lisää siirto- ja jakeluverkkokapasiteettia, joustavia resursseja ja älykkäitä ohjausmekanismeja. Tässä diplomityössä tutkitaan markkinaehtoisiin joustotuotteisiin perustuvia ohjausmekanismeja. Suunniteltujen joustotuotteiden on tarkoitus olla käytettävissä 2024 alkavalla suomalaisten sähköverkkoyhtiöiden sääntelykaudella Itämeren alueen sähkömarkkinoilla. Tämä diplomityö sisältää kirjallisuuskatsauksen ja empiirisen tutkimuksen, joka koostuu sähköalan asiantuntijoiden laadullisesta konsultaatiosta. Työssä tarkastellaan nykyisten sähkömarkkinoiden tuotteita, joilla verkkoja ja verkkoon kytkettyjä resursseja hallitaan. Lisäksi työ tutkii kehittyviä joustotuotteita, jotka voivat tarjota paikallisia joustopalveluita, joita nykyiset tuotteet eivät kata. Konsultaatio sisällyttää alan näkemyksiä jouston tarpeista, joustomarkkinoista ja kehittyvistä joustotuotteista tutkimukseen. Haastateltavat kokivat joustomarkkinoiden ja -tuotteiden käsitteet uusiksi ja monimutkaisiksi. Suurin osa haastatelluista ei ollut todennut suomalaisissa sähköverkoissa alueellisesti vakavia haasteita, mutta arvioivat paikallisten joustavuushaasteiden yleistyvän seuraavan viiden vuoden aikana. Merkittävä osa asiantuntijoista arvioi uudet teknologiaratkaisut ja markkinalähtöisen joustokaupankäynnin harkinnan arvoiseksi, mikäli kaupankäynti on kustannustehokasta ja kannattavaa sekä joustavuuden ostajille että myyjille. Keskeyttämätön sähkönsyöttö ja loistehon hallinta tunnistettiin kiireellisiksi paikallisiksi tarpeiksi ja siirtojenhallintaa pidettiin vähemmän kiireellisenä tarpeena. Työn mukaan lukuisat ja keskenään ristiriitaiset joustotuotevaihtoehdot voivat ratkaista erilaisia joustotarpeita. Ensisijaisesti tulisi keskittyä kolmen kategorian tuotteiden kehittämiseen: sijainnilliset päivänsisäisen markkinan tuotteet, sijainnilliset säätösähkömarkkinan tuotteet ja kilpailutetut kahdenväliset joustosopimukset. Tuloksista voidaan nähdä, että kaikki kolme vaihtoehtoa ovat olemassa olevien tuotteiden muunnoksia. Tuotteet ovat otettavissa käyttöön eri syistä, ja vaihtoehdot eivät ole toisiaan poissulkevia. Joustotuotteiden yhteensopivuus olemassa olevien tuotteiden ja toimintaprosessien kanssa on taattava, erityisesti yhteensovittaminen kantaverkkojen reaktiivisen säätötavan kanssa on varmistettava. Joustomarkkinoiden jatkokehittäminen tulisi aloittaa välittämättömästi kokeiluilla ja verkonhaltijoiden ja -käyttäjien yhteistyöllä

Advances in Theoretical and Computational Energy Optimization Processes

The paradigm in the design of all human activity that requires energy for its development must change from the past. We must change the processes of product manufacturing and functional services. This is necessary in order to mitigate the ecological footprint of man on the Earth, which cannot be considered as a resource with infinite capacities. To do this, every single process must be analyzed and modified, with the aim of decarbonising each production sector. This collection of articles has been assembled to provide ideas and new broad-spectrum contributions for these purposes