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The relevance of grid expansion under zonal markets

Joachim Bertsch, Tom Brown, Simeon Hagspiel, and Lisa Just

Year: 2017
Volume: Volume 38
Number: Number 5
DOI: https://doi.org/10.5547/01956574.38.5.jber
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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.



Reliability in Multi-regional Power Systems: Capacity Adequacy and the Role of Interconnectors

Simeon Hagspiel, Andreas Knaut, and Jakob Peter

Year: 2018
Volume: Volume 39
Number: Number 5
DOI: 10.5547/01956574.39.5.shag
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Abstract:
Based upon probabilistic reliability metrics, we develop an optimization model to determine the efficient amount and location of firm generation capacity to achieve reliability targets in multi-regional electricity systems. A particular focus lies on the representation and contribution of transmission capacities as well as variable renewable resources. Calibrating our model with a comprehensive dataset for Europe, we find that there are substantial benefits from regional cooperation. The amount of firm generation capacity to meet a perfectly reliably system could be reduced by 36.2 GW (i.e., 6.4%) compared to an isolated regional approach, which translates to savings of 14.5 bn EUR. Interconnectors contribute in both directions, with capacity values up to their technical maximum of close to 200%, while wind power contributions are in the range of 3.8-29.5%. Furthermore, we find that specific reliability targets heavily impact the efficient amount and distribution of reliable capacity as well as the contribution of individual technologies.Keywords: Reliability of supply, Capacity adequacy, Multi-regional power system, Interconnector, Variable renewable energy





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