Joachim Bertsch, Tom Brown, Simeon Hagspiel, Lisa Just
The Energy Journal Volume 38, Number 5, 2017, PrePress

Abstract: The European electricity market design is based on zonal markets with uniform prices. Hence, no differentiated locational price signals are provided within these zones. If intra-zonal congestion occurs due to missing grid expansion, this market design reveals its inherent incompleteness, and might lead to severe short and long-term distortions. In this paper, we study these distortions with a focus on the impact of restricted grid expansion under zonal markets. Therefore, we use a long-term model of the European electricity system and restrict the allowed expansion of the transmission grid per decade. We find that the combination of an incomplete market design and restricted grid expansion leads to a misallocation of generation capacities and the inability to transport electricity to where it is needed. This results in an energy imbalance in some regions of up to 2-3% and difficulty when reaching envisaged political targets in the power sector. Keywords: Electricity Market, Grid Expansion, Incomplete Market Design, Misallocation, Energy Imbalance.

David P. Schlachtberger, Sarah Becker, Stefan Schramm, Martin Greiner
Energy Conversion and Management, Available online 12 April 2016, In Press, Corrected Proof

Abstract: High shares of intermittent renewable power generation in a European electricity system will require flexible backup power generation on the dominant diurnal, synoptic, and seasonal weather timescales. The same three timescales are already covered by today’s dispatchable electricity generation facilities, which are able to follow the typical load variations on the intra-day, intra-week, and seasonal timescales. This work aims to quantify the changing demand for those three backup flexibility classes in emerging large-scale electricity systems, as they transform from low to high shares of variable renewable power generation. A weather-driven modelling is used, which aggregates eight years of wind and solar power generation data as well as load data over Germany and Europe, and splits the backup system required to cover the residual load into three flexibility classes distinguished by their respective maximum rates of change of power output. This modelling shows that the slowly flexible backup system is dominant at low renewable shares, but its optimized capacity decreases and drops close to zero once the average renewable power generation exceeds 50% of the mean load. The medium flexible backup capacities increase for modest renewable shares, peak at around a 40% renewable share, and then continuously decrease to almost zero once the average renewable power generation becomes larger than 100% of the mean load. The dispatch capacity of the highly flexible backup system becomes dominant for renewable shares beyond 50%, and reach their maximum around a 70% renewable share. For renewable shares above 70% the highly flexible backup capacity in Germany remains at its maximum, whereas it decreases again for Europe. This indicates that for highly renewable large-scale electricity systems the total required backup capacity can only be reduced if countries share their excess generation and backup power.

Bethany A. Frew, Sarah Becker, Michael J. Dvorak, Gorm B. Andresen, Mark Z. Jacobson
Energy 101 (2016) 65-78

Abstract: This study explores various scenarios and flexibility mechanisms to integrate high penetrations of renewable energy into the US (United States) power grid. A linear programming model – POWER (Power system Optimization With diverse Energy Resources) – is constructed and used to (1) quantify flexibility cost-benefits of geographic aggregation, renewable overgeneration, storage, and flexible electric vehicle charging, and (2) compare pathways to a fully renewable electricity system. Geographic aggregation provides the largest flexibility benefit with ∼5–50% cost savings, but each region's contribution to the aggregate RPS (renewable portfolio standard) target is disproportionate, suggesting the need for regional-and-resource-specific RPS targets. Electric vehicle charging yields a lower levelized system cost, revealing the benefits of demand-side flexibility. However, existing demand response price structures may need adjustment to encourage optimal flexible load in highly renewable systems. Two scenarios with RPS targets from 20% to 100% for the US (peak load ∼729 GW) and California (peak load ∼62 GW) find each RPS target feasible from a planning perspective, but with 2× the cost and 3× the overgeneration at a 100% versus 80% RPS target. Emission reduction cost savings for the aggregated US system with an 80% versus 20% RPS target are roughly $200 billion/year, outweighing the $80 billion/year cost for the same RPS range.