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

Abstract

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.

Renewable Energy Integration in Zonal Markets

“…The authors use a transportation model for transmission and estimate cost savings of 0.1% of nodal relative to zonal pricing. Neuhoff et al [30] estimate the operating cost savings of LMP relative to zonal pricing between 1.1% − 3.6%. The authors use a single-period unit commitment model of the UCTE-STUM system (4300 nodes, 6000 lines) which is simulated for two extreme operational snapshots (no wind and maximum wind).…”

“…In terms of modeling, we develop a hierarchy of models for the market coupling design that includes a model for available transfer capacity computation that is guaranteed to outperform previously proposed models [30], a power exchange model that accounts for unit commitment and the treatment of nonconvexities by European power exchanges, and a model that emulates the decentralized process of nominations of production and reserves after the day-ahead exchange has cleared. The latter two elements are largely absent from the current literature [20]- [22], [29]- [31].…”

“…Problem (1)-(6) directly maximizes the cross-border flow between a and b in a one-shot optimization problem, which outperforms iterative methods, such as the one described in [47], and methods based on net position manipulation, proposed by Neuhoff et al [30].…”

“…In practice, however, this requirement is relaxed and replaced by vertex feasibility 6 , which demands that all vertices of N N T C τ are contained within N OP F τ [48]. Vertex feasibility is not necessarily satisfied by NTC values computed using equation (7), NTC values computed using other procedures proposed in the literature [30], or the procedure used in practice [47]. The technical documentation [48] states that if NTC values do not comply with vertex feasibility then "reductions are applied to the NTC levels in a coordinated way with a view to eliminating overloads".…”

Simulation of Congestion Management and Security Constraints in the Nordic Electricity Market

“…Instead of the cut constraints described above we reduce the capacities of the individual lines to a fraction of the nominal thermal capacities, like in [5]. Graphs in Fig.…”