Revisiting the Merit-Order Effect of Renewable Energy Sources

An on-going debate in the energy economics and power market community has raised the question if energy-only power markets are increasingly failing due to growing feed-in shares from subsidized renewable energy sources (RES). The short answer to this is: No, they are not failing. Energy-based power markets are, however, facing several market distortions, namely from the gap between the electricity volume traded at day-ahead markets versus the overall electricity consumption as well as the (wrong) regulatory assumption that variable RES generation, i.e., wind and photovoltaic (PV), truly have zero marginal operation costs. In this paper we show that both effects over-amplify the well-known merit-order effect of RES power feed-in beyond a level that is explainable by underlying physical realities, i.e., thermal power plants being willing to accept negative electricity prices to be able to stay online due to considerations of wear & tear and start-stop constraints. We analyze the impacts of wind and PV power feed-in on the day-ahead market for a region that is already today experiencing significant feed-in tariff (FIT)-subsidized RES power feed-in, the EPEX German-Austrian market zone ($\approx\,$20% FIT share). Our analysis shows that, if the necessary regulatory adaptations are taken, i.e., increasing the day-ahead market's share of overall load demand and using the true marginal costs of RES units in the merit-order, energy-based power markets can remain functional despite high RES power feed-in.Comment: Working Paper (9 pages, 11 figures, 5 tables) - Some revisions since last version (10 February 2014). (Under 2nd review for IEEE Transactions on Power Systems

Impact of Low Rotational Inertia on Power System Stability and Operation

Large-scale deployment of RES has led to significant generation shares of variable RES in power systems worldwide. RES units, notably inverter-connected wind turbines and PV that as such do not provide rotational inertia, are effectively displacing conventional generators and their rotating machinery. The traditional assumption that grid inertia is sufficiently high with only small variations over time is thus not valid for power systems with high RES shares. This has implications for frequency dynamics and power system stability and operation. Frequency dynamics are faster in power systems with low rotational inertia, making frequency control and power system operation more challenging. This paper investigates the impact of low rotational inertia on power system stability and operation, contributes new analysis insights and offers mitigation options for low inertia impacts.Comment: Presented at IFAC World Congress 2014, Capetown, South Africa (Flaws in Table I corrected.

Grid Integration Costs of Fluctuating Renewable Energy Sources

The grid integration of intermittent Renewable Energy Sources (RES) causes costs for grid operators due to forecast uncertainty and the resulting production schedule mismatches. These so-called profile service costs are marginal cost components and can be understood as an insurance fee against RES production schedule uncertainty that the system operator incurs due to the obligation to always provide sufficient control reserve capacity for power imbalance mitigation. This paper studies the situation for the German power system and the existing German RES support schemes. The profile service costs incurred by German Transmission System Operators (TSOs) are quantified and means for cost reduction are discussed. In general, profile service costs are dependent on the RES prediction error and the specific workings of the power markets via which the prediction error is balanced. This paper shows both how the prediction error can be reduced in daily operation as well as how profile service costs can be reduced via optimization against power markets and/or active curtailment of RES generation.Comment: Accepted for SUSTECH 2014, Portland, Oregon, USA, July 201

On Holistic Multi-Step Cyberattack Detection via a Graph-based Correlation Approach

While digitization of distribution grids through information and communications technology brings numerous benefits, it also increases the grid's vulnerability to serious cyber attacks. Unlike conventional systems, attacks on many industrial control systems such as power grids often occur in multiple stages, with the attacker taking several steps at once to achieve its goal. Detection mechanisms with situational awareness are needed to detect orchestrated attack steps as part of a coherent attack campaign. To provide a foundation for detection and prevention of such attacks, this paper addresses the detection of multi-stage cyber attacks with the aid of a graph-based cyber intelligence database and alert correlation approach. Specifically, we propose an approach to detect multi-stage attacks by leveraging heterogeneous data to form a knowledge base and employ a model-based correlation approach on the generated alerts to identify multi-stage cyber attack sequences taking place in the network. We investigate the detection quality of the proposed approach by using a case study of a multi-stage cyber attack campaign in a future-orientated power grid pilot.Comment: IEEE International Conference on Communications, Control, and Computing Technologies for Smart Grids (SmartGridComm) 202