Modelling and assessment of flexibility requirements

Aalto University, P.O. Box 11000, FI-00076 Aalto www.aalto.fi Author Behnam Zakeri Name of the doctoral dissertation Integration of variable renewable energy in national and international energy systems Modelling and assessment of flexibility requirements Publisher School of Engineering Unit Department of Mechanical Engineering Series Aalto University publication series DOCTORAL DISSERTATIONS 178/2016 Field of research Energy Technology Manuscript submitted 10 June 2016 Date of the defence 30 September 2016 Permission to publish granted (date) 15 August 2016 Language English Monograph Article dissertation Essay dissertation Abstract National energy policies seek to increase the share of local renewable energy to meet the targets for climate change mitigation and to enhance the energy security. In this respect, large-scale integration of variable renewable energy (VRE) seems to be a predominant option. To cope with the intermittency of VRE, energy systems need to employ different "flexibility" solutions to match energy supply and demand in different time scales.National energy policies seek to increase the share of local renewable energy to meet the targets for climate change mitigation and to enhance the energy security. In this respect, large-scale integration of variable renewable energy (VRE) seems to be a predominant option. To cope with the intermittency of VRE, energy systems need to employ different "flexibility" solutions to match energy supply and demand in different time scales. This dissertation examines the flexibility of an energy system in integration of VRE by employing quantitative energy system modelling methods. First, the maximum flexibility of an energy system is quantified. Then, different flexibility solutions and their system-level benefits are compared. The dissertation examines the market value of flexibility to quantify the profitability of such options from an investor's viewpoint. Since energy systems are being further interconnected through international power markets, the role of such markets in integration of VRE is crucial. To examine this role, this contribution develops a market-based multi-region energy system model. The proposed model is an hourly simulation-optimization model capturing the main operational features of an international power market, as well as the local heat sector in each country. The results indicate that the flexibility of the Finnish energy system is limited and needs to be improved to accommodate wind integration levels larger than 20% of the total electricity demand. For the examined energy system, large-scale heat pumps in connection with the district heating system and heat storage prove to be techno-economically the most promising flexibility option. The deployment of electrical energy storage is not profitable under today's market compensations, but the monetization of some externalities could make a business model for some storage technologies. The size of these system-level benefits of energy storage is quantified in this study. Last but not the least, the role of international power markets in providing flexibility is analysed. The integration of VRE in neighbouring countries entails overlapping impacts, which may diminish the flexibility of the whole system. The findings of this dissertation inform energy policy on the flexibility of the energy system to achieve the planned targets from high-level integration of VRE.