Integrated network flow model for a reliability assessment of the national electric energy system

Electric energy availability and price depend not only on the electric generation and transmission facilities, but also on the infrastructure associated to the production, transportation, and storage of coal and natural gas. As the U.S. energy system has grown more complex and interdependent, failure or degradation on the performance of one or more of its components may possibly result in more severe consequences in the overall system performance. The effects of a contingency in one or more facilities may propagate and affect the operation, in terms of availability and energy price, of other facilities in the energy grid. In this dissertation, a novel approach for analyzing the different energy subsystems in an integrated analytical framework is presented, by using a simplified representation of the energy infrastructure structured as an integrated, generalized, multi-period network flow model. The model is capable of simulating the energy system operation in terms of bulk energy movements between the different facilities and prices at different locations under different scenarios. Assessment of reliability and congestion in the grid is performed through the introduction and development of nodal price-based metrics, which prove to be especially valuable for the assessment of conditions related to changes in the capacity of one or more of the facilities. Nodal price-based metrics are developed with the specific objectives of evaluating the impact of disruptions and of assessing capacity expansion projects. These metrics are supported by studying the relationship between nodal prices and congestion using duality theory. Techniques aimed at identifying system vulnerabilities and conditions that may significantly impact availability and price of electrical energy are also developed. The techniques introduced and developed through this work are tested using 2005 data, and special effort is devoted to the modeling and study of the effects of hurricanes Katrina and Rita in the energy system. In summary, this research is a step forward in the direction of an integrated analysis of the electric subsystem and the fossil fuel production and transportation networks, by presenting a set of tools for a more comprehensive assessment of congestion, reliability, and the effects of disruptions in the U.S. energy grid

Electricity transmission: an overview of the current debate

Electricity transmission has emerged as critical for successfully liberalising powermarkets. This paper surveys the issues currently under discussion and provides a framework for the remaining papers in this issue. We conclude that signalling the efficient location of generation investment might require even a competitive LMP system to be complemented with deep connection charges. Although a Europe-wide LMP system is desirable, it appears politically problematic, so an integrated system of market coupling, possibly evolving by voluntary participation, should have high priority. Merchant investors may be able to increase interconnector capacity, although this is not unproblematic and raises new regulatory issues. A key issue that needs further research is how to better incentivize TSOs, especially with respect to cross-border issues

Market design

Europe is liberalising electricity in accordance with the European Commission’s Electricity Directives. Different countries have responded differently, notably in the extent of restructuring, treatment of mergers, market power, and vertical unbundling. While Britain and Norway have achieved effective competition, others like Germany, Spain and France are still struggling to deal with dominant and sometimes vertically integrated companies. The Netherlands offers an interesting intermediate case, where good economic analysis has sometimes been thwarted by legalistic interpretations. Investment under the new Emissions Trading system could further transform the electricity industry but may be hampered by slow progress in liberalising European gas markets

A Comparison of Electricity Market Designs in Networks

In the real world two classes of market designs are implemented to trade electricity in transmission constrained networks. Analytical results show that in two node networks integrated market designs reduce the ability of electricity generators to exercise market power relative to separated market designs. In multi node networks countervailing effects make an analytic analysis difficult. We present a formulation of both market designs as an equilibrium problem with equilibrium constraints. We find that in a realistic network, prices are lower with the integrated market design

Renewable Electric Energy Integration: Quantifying the Value of Design of Markets for International Transmission Capacity

Integrating large quantities of supply-driven renewable electricity generation remains a political and operational challenge. One of the main obstacles in Europe to installing at least 200 GWs of power from variable renewable sources is how to deal with the insufficient network capacity and the congestion that will result from new flow patterns. We model the current methodology for controlling congestion at international borders and compare its results, under varying penetrations of wind power, with a model that simulates an integrated European network that utilises nodal/localised marginal pricing. The nodal pricing simulations illustrate that congestion - and price - patterns vary considerably between wind scenarios and within countries, and that a nodal price regime could make fuller use of existing EU network capacity, introducing substantial operational cost savings and reducing marginal power prices in the majority of European countries.Power market design, renewable power integration, congestion management, transmission economics

Electricity transmission: an overview of the current debate

Electricity transmission has emerged as critical for successfully liberalising power markets. This paper surveys the issues currently under discussion and provides a framework for the remaining papers in this issue. We conclude that signalling the efficient location of generation investment might require even a competitive LMP system to be complemented with deep connection charges. Although a Europe-wide LMP system is desirable, it appears politically problematic, so an integrated system of market coupling, possibly evolving by voluntary participation, should have high priority. Merchant investors may be able to increase interconnector capacity, although this is not unproblematic and raises new regulatory issues. A key issue that needs further research is how to better incentivize TSOs, especially with respect to cross-border issues.Electricity, Transmission, Regulation, Prices, Merchant Investment

Opening the Electricity Market to Renewable Energy: Making Better Use of the Grid

Opening the electricity market to renewable energy sources would create flexibility for the further integration of renewable energy, leading to considerably lower costs and emissions. This requires the electricity markets to be reorganized in three ways. Firstly, most trading, and therefore production decision-making, is completed at least one day prior to electricity production. But it must be possible to make adjustments on shorter timescales, in order to effectively utilize wind forecasts, which are only relatively accurate a few hours ahead of production. Secondly, demand for operating reserve to stabilize the grid varies with the uncertainty of forecasts for wind and other generation. Most power plants can offer operating reserve, but only together with electricity. At present, however, operating reserve is traded separately from electricity, often in long-term contracts. And thirdly, network operators generally compensate market participants for grid constraints. But with around 200 GWs of new wind and solar capacity being built by 2020, grid expansion must be combined with transparent, market-based congestion management. The introduction of an independent system operator offering an integrated platform for short-term power trading using a pricing system that internalises network constraints ("nodal pricing") could meet these conditions, allowing further openings of the power market for renewable electrical energy. Experience in the US and simulations for Europe show that international transmission capacity is up to 30% better utilized, congestion management alone yielding annual savings of 1 - 2 billion euros.Market design, renewable energy, nodal pricing, transmission

Market-based Investment in Electricity Transmission Networks: Controllable Flow

This paper discusses unregulated market-based electricity transmissio