Multicriteria methodologies for the appraisal of smart grid projects when flexibility competes with grid expansion

The severe consequences expected due to the increased frequency and intensity of extreme weather events call for improving the environmental sustainability of our society. The electricity sector is pivotal in the path toward a climate-neutral society. Nowadays, the massive use of renewable energy sources requires that electricity demand follows energy production. Demand has to be flexible, as well as the renewable generation and the grid infrastructures. The power system has to assume a decentralised structure and integrate the transportation and cooling and heating sectors. All customers connected to the electrical grid have to contribute to the power system management and participate in the related markets. The power system has to become smart; all technical and market processes have to be digitalised to enable new functionalities and services. The power system transformation requires rethinking planning and operation practices to accommodate the changes and take advantage of the related opportunities. The novel features and services available in the active and flexible power system will influence the customers' daily habits; therefore, the impacts generated by planning initiatives will cross the power system borders by impacting society as a whole. Since the power system will be operated closer to its technical limits, it is crucial to enhance the management of uncertainties by the increased accuracy of load and generation forecast. This thesis addresses the ongoing power system transformation by focusing on the distribution system, which will face unprecedented changes. This thesis concerns novel approaches for appraising the project initiatives based on the use of the users' flexibility connected to the grid. Traditional appraisal tools are no longer effective; therefore, decision-makers have to be supported with tools capable of capturing the complexity of the future power system in which flexibility measures compete with grid expansion. In this thesis, an assessment framework for smart grid initiatives which combines the cost-benefit analysis and the multi-criteria analysis proposed. Based on international guidelines, this framework allows for a systematic and simultaneous assessment of tangible and the intangible impacts considering conflicting criteria. To complete the assessment framework, a novel methodology which combines Regret Theory and multi-criteria analysis is proposed. The proposed methodology represents one of the main contributions of this dissertation. It supports the decision-maker to identify the most valuable option by decomposing the complex decision-making problem of smart grid planning and rejecting personal biases by avoiding the need for defining the evaluation criteria relevance. However, the stakeholders’ perspective can be included in terms of constraints for the minimax optimisation problem. In conclusion, the contribution of the thesis is to provide decision-making support tools for strategical power system planning. The research activities described in this document have been aimed at supporting system operators and regulatory bodies by providing tools for smart grid project appraisal and improving the accuracy of power system studies considering the novel context features

Remuneration mechanisms for investment in reactive power flexibility

Abstract The practices for the procurement of voltage control capability need changing because of the evolution of the power system driven by the penetration of renewable sources, low carbon policies, and decentralisation. New providers have to be involved. Therefore, new mechanisms to achieve cost-effective solutions have to be encouraged. To this aim, a cost-based incentive mechanism and a weighted auction are proposed for procuring additional reactive power capacity. Both mechanisms are conceived for encouraging effective investment in voltage control by reducing the overall procurement cost. Hence, the voltage sensitivity of the reactive power provider is part of both mechanisms. Voltage sensitivity is evaluated through the Multi Infeed Interaction Factors while the American Electric Power methodology is used for identifying the reactive power costs. The proposed mechanisms are general, and they can be exploited in transmission and distribution networks irrespective of the asset, which provides the reactive capacity. A case study concerning the 39-bus New-England power system is presented for providing the proof of concept of the proposed mechanisms. The analysis of the two mechanisms' pros and cons highlights that the weighted auction creates competition and shows low risks related to the exercise of potential market power

Distributed ledger technologies for peer-to-peer local markets in distribution networks

The newest Distributed Ledger Technology platforms, which delegate the execution of complex tasks in the form of Smart Contracts, make it possible to devise novel local electricity market frameworks, which are performed in a fully automated fashion. This paper proposes a novel fully automated platform for energy and ancillary service markets in distribution networks, able to run in a decentralized fashion, bypassing the need for a physical central authority. The proposed platform, able to perform the role of Virtual Decentralized Market Authority, shows excellent potential applications in the management of local ancillary service markets in local energy communities of various sizes. The proposed Virtual Decentralized Market Authority showed reasonable running costs and comparable technical management capabilities with respect to a physical, centralized managing authority

TSO-DSO-Customer coordination for purchasing flexibility system services: Challenges and lessons learned from a demonstration in Sweden

This paper presents a real-word implementation of a TSO-DSO-customer coordination framework for the use of flexibility to support system operation. First, we describe the general requirements for TSO-DSO-customer coordination, including potential coordination schemes, actors and roles and the required architecture. Then, we particularise those general requirements for a real-world demonstration in Sweden, aiming to avoid congestions in the grid during the high-demand winter season. In the light of current congestion management rules and existing markets in Sweden, we describe an integration path to newly defined flexibility markets in support of new tools that we developed for this application. The results show that the use of flexibility can reduce the congestion costs while enhancing the secure operation of the system. Additionally, we discuss challenges and lessons learned from the demonstration, including the importance of the engagement between stakeholders, the role of availability remuneration, and the paramount importance of defining appropriate technical requirements and market timings.This work has received funding from the European Union’s Horizon 2020 research and innovation programme under grant agreement nº 824414

Recommendations for consumer-centric products and efficient market design

Flexibility involves the adjustment of energy consumption or generation schedules to benefit the grid, for instance, providing services such as balancing, congestion management, and voltage control. Flexibility can be offered at different grid levels by flexibility service providers (FSPs) through market mechanisms. This study, produced in the context of the Horizon 2020 OneNet project, evaluates various TSO-DSO coordinated flexibility market models. In this assessment, the study considers factors like economic efficiency, consumer-centricity, existence of entry barriers, and value-stacking potential. The analysis highlights the importance of interface flow pricing and FSPs' bidding behaviour. The creation of local market layers can reduce entry barriers but may lead to market fragmentation. The study also explores bid forwarding mechanisms and methods to ensure grid safety. Overall, the work offers valuable insights for designing efficient and coordinated flexibility markets in Europe.This project has received funding from the European Union’s Horizon 2020 research and innovation programme under grant agreement No 957739

Electricity Market Design 2030-2050: Shaping Future Electricity Markets for a Climate-Neutral Europe

Speeding up the energy transition in the European Union (EU) is a major task to quickly reduce harmful greenhouse gas emissions. Market design plays a crucial role in the decarbonization of the European energy system, driving the expansion of both Renewable Energy Sources (RES) and accompanying flexibility sources. In particular, demand flexibility by energy-intensive industrial companies can play a key role. By flexibilizing their production processes, industrial companies can contribute to an increased use of variable RES (in the following referred to as Variable Renewable Energy (VRE)) to lower the CO2 footprint of their products with positive effects on economic competitiveness. Together with other flexibility sources like electric vehicles, the EU can transition to a just, low-carbon society and economy with benefits for all. However, to actually realize these benefits, market design must account for the changing production and consumption characteristics, e.g., the intermittency of VRE. Starting with current challenges of the energy transition that need to be solved with a future market designin the EU, the whitepaper takes alternative market design options and recent technological developments into account, which are highly intertwined. The whitepaper elaborates on the role of, for instance, flexibility, digital technologies, market design with locational incentives, and possible transition pathways in a European context. The “Clean energy for all Europeans” package offers a new opportunity to deepen the integration of different national electricity systems, whereby Transmission System Operators (TSOs) are required to reserve at least 70% of transmission capacities for cross-border trades from 2025 onwards. The corresponding scarcity of transmission capacities on the national level, however, may aggravate congestion to a critical extent, calling for transformational changes in market design involving, e.g., a redefinition of bidding zones close to the network-node level. The present whitepaper can be seen as part of a series of whitepapers on electricity market design 2030 - 2050 [14, 15] and continues the analysis of regionally differentiated prices or Locational Marginal Pricing (LMP) as a means to address congestion problems in future VRE-based electricity systems. Thereby, the whitepaper extends the findings of the previous two whitepapers (where in the latter whitepapers, e.g., a detailed discussion of the pros and cons of LMP can be found) and elaborates on the question how LMP could be implemented in one or several European countries and how possible implementation pathways may look like in a coupled European system. Moreover, the whitepaper describes preparatory steps that are necessary for the introduction of LMP, and – at the same time – create advantages for countries under both, a nodal and zonal market design. All in all, the results and outcomes of the whitepaper shall support the market design transition in Europe and, thus, the integration and activation of flexibility potentials to foster a fast reduction of CO2 emissions through a better use of VRE. Therefore, the whitepaper contributes with concrete policy measures to the overarching vision of a future European electricity market design that bases on low-carbon technologies and enhances welfare and fairness, while ensuring economic competitiveness of Europe. We would like to thank all the partners and are grateful for the financial support from the Federal Ministry of Education and Research as well as the Project Management Jülich. Martin Bichler, Hans Ulrich Buhl, and Martin Weibelzahl (SynErgie) Antonello Monti (OneNet

Models characterizing the final electricity demand

Nowadays the estimation of the consumption and generation profiles is of the greatest importance. New loads characterized by coincident peak of consumption (e.g., home charging of electric vehicles) or by high absorption peaks (heat pumps) are increasingly frequent. The presence of such loads must be carefully considered for network investments and for the optimization of asset management. Moreover, the massive diffusion of non-programmable renewable sources gives a leading role to the flexibility of demand, which is crucial for the success of the energy transition. The variety and difference of the electrical behaviour of LV customers, even nominally homogeneous, need the use of stochastic methods for estimating the load profile on the LV/MV interfaces for the planning and the operational of distribution network, and for estimating the flexibility potential of demand. In this paper different techniques for modelling the composition of demand are compared to evaluate the quality of the models used by DSO on real customers. In particular, the power peak of a given network section is calculated as key indicator for estimating the risk of overloading of lines and secondary substation transformers. Different methods of calculation have been applied on a dataset gathered with a recent measurement campaign in Italy by considering real LV distribution networks

Two-stage Clustering for Profiling Residential Customer Demand

Since the power system operation and planning depend on generation and consumption behavior, load and generation patterns are fundamental inputs for power system analyses. TSOs and DSOs use typical daily profiles for representing the consumption of the end-users. The evolution of power systems, due to the increased integration of renewables, and the changed end-users’ practices are stressing the operation and planning processes. The updating of the typical load profiles to the behavior of current customers is often disregarded, and currently the used profiles refer to out-of-date and incomplete measurement campaigns. This paper proposes an innovative two- stage clustering methodology, able to find typical load profiles of residential customers. The focus to the residential customers is due to their extremely variable behavior in their consumption. The results add to the current practice useful improvements for planning and operation studies

The digitalization of peer-to-peer electricity trading in energy communities

One of the motivating factors for developing energy communities is to create an opportunity for peer-to-peer trading among the members. Smart meters, Internet of Things devices, distributed ledger, and digitalization enable energy communities based on renewable energy production to thrive. The local energy market participants can trade energy and provide services to the upstream distribution and transmission system operators. This chapter introduces the local energy market concept describing enabling technologies. A laboratory-scale local energy community operated by P2P and blockchain is used to show the feasibility and benefits of this new technology

A cyber-physical platform for simulating energy transactions in local energy markets

The paper deals with the design and development of a cyber-physical platform for simulating new local smart electricity markets where even small size consumers and prosumers, located on a relatively small geographic area, can sell/buy the electrical energy or power to contribute to the balance of the power system. The local electricity market is managed by a commercial aggregator, organized as a Virtual Power Plant (VPP), that gathers the energy/power flexibility bids from its consumers/prosumers portfolio. The aggregator is responsible for making trading offers in the day ahead and ancillary services (balancing, reserve, voltage regulation, congestion management) electricity markets, and is also responsible for technical aspects and for commercial transactions among its users by exploiting the Blockchain technology