IDEAS home Printed from https://ideas.repec.org/a/eee/energy/v176y2019icp1-14.html
   My bibliography  Save this article

Can electricity market prices control power-to-heat production for peak shaving of renewable power generation? The case of Sweden

Author

Listed:
  • Åberg, Magnus
  • Lingfors, David
  • Olauson, Jon
  • Widén, Joakim

Abstract

100% renewable energy systems require high penetration of variable renewable electricity (VRE) generation. This causes the net load in the system to be more variable and could cause operational problems in local power grids. Demand side management (DSM), such as fuel or energy carrier switching in response to a price signal, can provide flexibility to meet the increased variability. This study investigates the impact of VRE production on electricity prices and their potential to act as an incentive to control district heating power-to-heat (P2H) production in order to shave VRE production peaks. Also, the potential to increase P2H production flexibility with additional heat storages is studied. Electricity prices are simulated by modification of historical electricity market supply curves. A heat storage component is implemented in an existing model for district heat production. The results show that P2H production is significantly increased (up to 98%) when electricity prices are influenced by VRE production. Thermal storages further increase the P2H production by up to 46%. The increased P2H production, however, does not necessarily coincide with the peaks of VRE. Thus, in conclusion, the pricing mechanism on the Nord pool electricity market is insufficient to control P2H production for shaving VRE production peaks.

Suggested Citation

  • Åberg, Magnus & Lingfors, David & Olauson, Jon & Widén, Joakim, 2019. "Can electricity market prices control power-to-heat production for peak shaving of renewable power generation? The case of Sweden," Energy, Elsevier, vol. 176(C), pages 1-14.
    • Handle: RePEc:eee:energy:v:176:y:2019:i:c:p:1-14
    DOI: 10.1016/j.energy.2019.03.156
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0360544219305766
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.energy.2019.03.156?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Hughes, Larry, 2010. "Meeting residential space heating demand with wind-generated electricity," Renewable Energy, Elsevier, vol. 35(8), pages 1765-1772.
    2. Lingfors, D. & Widén, J., 2016. "Development and validation of a wide-area model of hourly aggregate solar power generation," Energy, Elsevier, vol. 102(C), pages 559-566.
    3. Ketterer, Janina C., 2014. "The impact of wind power generation on the electricity price in Germany," Energy Economics, Elsevier, vol. 44(C), pages 270-280.
    4. Bloess, Andreas & Schill, Wolf-Peter & Zerrahn, Alexander, 2018. "Power-to-heat for renewable energy integration: A review of technologies, modeling approaches, and flexibility potentials," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 212, pages 1611-1626.
    5. Averfalk, Helge & Ingvarsson, Paul & Persson, Urban & Gong, Mei & Werner, Sven, 2017. "Large heat pumps in Swedish district heating systems," Renewable and Sustainable Energy Reviews, Elsevier, vol. 79(C), pages 1275-1284.
    6. Schweiger, Gerald & Rantzer, Jonatan & Ericsson, Karin & Lauenburg, Patrick, 2017. "The potential of power-to-heat in Swedish district heating systems," Energy, Elsevier, vol. 137(C), pages 661-669.
    7. Werner, Sven, 2017. "District heating and cooling in Sweden," Energy, Elsevier, vol. 126(C), pages 419-429.
    8. Olauson, Jon & Bergkvist, Mikael, 2015. "Modelling the Swedish wind power production using MERRA reanalysis data," Renewable Energy, Elsevier, vol. 76(C), pages 717-725.
    9. Dillig, Marius & Jung, Manuel & Karl, Jürgen, 2016. "The impact of renewables on electricity prices in Germany – An estimation based on historic spot prices in the years 2011–2013," Renewable and Sustainable Energy Reviews, Elsevier, vol. 57(C), pages 7-15.
    10. Rintamäki, Tuomas & Siddiqui, Afzal S. & Salo, Ahti, 2017. "Does renewable energy generation decrease the volatility of electricity prices? An analysis of Denmark and Germany," Energy Economics, Elsevier, vol. 62(C), pages 270-282.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Okada, Masaki & Onishi, Terumi & Obara, Shin’ya, 2020. "A design algorithm for an electric power system using wide-area interconnection of renewable energy," Energy, Elsevier, vol. 193(C).
    2. Hakimi, Seyed Mehdi & Hasankhani, Arezoo & Shafie-khah, Miadreza & Catalão, João P.S., 2021. "Stochastic planning of a multi-microgrid considering integration of renewable energy resources and real-time electricity market," Applied Energy, Elsevier, vol. 298(C).
    3. Ying, Zhou & Xin-gang, Zhao & Zhen, Wang, 2020. "Demand side incentive under renewable portfolio standards: A system dynamics analysis," Energy Policy, Elsevier, vol. 144(C).
    4. Kim, Ju-Hee & Kim, Hee-Hoon & Yoo, Seung-Hoon, 2022. "Social acceptance toward constructing a combined heat and power plant near people's dwellings in South Korea," Energy, Elsevier, vol. 244(PB).
    5. Hu, Bo & Zhou, P., 2022. "Can the renewable power consumption guarantee mechanism help activate China's power trading market?," Energy, Elsevier, vol. 253(C).
    6. Kim, Ju-Hee & Lim, Seul-Ye & Yoo, Seung-Hoon, 2021. "Public preferences for introducing a power-to-heat system in South Korea," Renewable and Sustainable Energy Reviews, Elsevier, vol. 151(C).
    7. Golmohamadi, Hessam, 2022. "Demand-side management in industrial sector: A review of heavy industries," Renewable and Sustainable Energy Reviews, Elsevier, vol. 156(C).
    8. Mohammad Nure Alam, 2021. "Accessing the Effect of Renewables on the Wholesale Power Market," International Journal of Energy Economics and Policy, Econjournals, vol. 11(2), pages 341-360.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Fernqvist, Niklas & Broberg, Sarah & Torén, Johan & Svensson, Inger-Lise, 2023. "District heating as a flexibility service: Challenges in sector coupling for increased solar and wind power production in Sweden," Energy Policy, Elsevier, vol. 172(C).
    2. Golmohamadi, Hessam & Larsen, Kim Guldstrand & Jensen, Peter Gjøl & Hasrat, Imran Riaz, 2022. "Integration of flexibility potentials of district heating systems into electricity markets: A review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 159(C).
    3. Schöniger, Franziska & Morawetz, Ulrich B., 2022. "What comes down must go up: Why fluctuating renewable energy does not necessarily increase electricity spot price variance in Europe," Energy Economics, Elsevier, vol. 111(C).
    4. Ma, Zheng & Knotzer, Armin & Billanes, Joy Dalmacio & Jørgensen, Bo Nørregaard, 2020. "A literature review of energy flexibility in district heating with a survey of the stakeholders’ participation," Renewable and Sustainable Energy Reviews, Elsevier, vol. 123(C).
    5. Sánchez de la Nieta, A.A. & Contreras, J., 2020. "Quantifying the effect of renewable generation on day–ahead electricity market prices: The Spanish case," Energy Economics, Elsevier, vol. 90(C).
    6. Allouhi, Amine, 2022. "Techno-economic and environmental accounting analyses of an innovative power-to-heat concept based on solar PV systems and a geothermal heat pump," Renewable Energy, Elsevier, vol. 191(C), pages 649-661.
    7. Marchetti, Isabella & Rego, Erik Eduardo, 2022. "The impact of hourly pricing for renewable generation projects in Brazil," Renewable Energy, Elsevier, vol. 189(C), pages 601-617.
    8. Mwampashi, Muthe Mathias & Nikitopoulos, Christina Sklibosios & Konstandatos, Otto & Rai, Alan, 2021. "Wind generation and the dynamics of electricity prices in Australia," Energy Economics, Elsevier, vol. 103(C).
    9. Auer, Benjamin R., 2016. "How does Germany's green energy policy affect electricity market volatility? An application of conditional autoregressive range models," Energy Policy, Elsevier, vol. 98(C), pages 621-628.
    10. Boldrini, A. & Jiménez Navarro, J.P. & Crijns-Graus, W.H.J. & van den Broek, M.A., 2022. "The role of district heating systems to provide balancing services in the European Union," Renewable and Sustainable Energy Reviews, Elsevier, vol. 154(C).
    11. Samarth Kumar & David Schönheit & Matthew Schmidt & Dominik Möst, 2019. "Parsing the Effects of Wind and Solar Generation on the German Electricity Trade Surplus," Energies, MDPI, vol. 12(18), pages 1-17, September.
    12. Macedo, Daniela Pereira & Marques, António Cardoso & Damette, Olivier, 2022. "The role of electricity flows and renewable electricity production in the behaviour of electricity prices in Spain," Economic Analysis and Policy, Elsevier, vol. 76(C), pages 885-900.
    13. Gürtler, Marc & Paulsen, Thomas, 2018. "The effect of wind and solar power forecasts on day-ahead and intraday electricity prices in Germany," Energy Economics, Elsevier, vol. 75(C), pages 150-162.
    14. Nuño, Edgar & Maule, Petr & Hahmann, Andrea & Cutululis, Nicolaos & Sørensen, Poul & Karagali, Ioanna, 2018. "Simulation of transcontinental wind and solar PV generation time series," Renewable Energy, Elsevier, vol. 118(C), pages 425-436.
    15. Bell, William Paul & Wild, Phillip & Foster, John & Hewson, Michael, 2017. "Revitalising the wind power induced merit order effect to reduce wholesale and retail electricity prices in Australia," Energy Economics, Elsevier, vol. 67(C), pages 224-241.
    16. Katarzyna Maciejowska, 2022. "A portfolio management of a small RES utility with a Structural Vector Autoregressive model of German electricity markets," Papers 2205.00975, arXiv.org.
    17. Gianfreda, Angelica & Ravazzolo, Francesco & Rossini, Luca, 2020. "Comparing the forecasting performances of linear models for electricity prices with high RES penetration," International Journal of Forecasting, Elsevier, vol. 36(3), pages 974-986.
    18. Bert Willems & Juulia Zhou, 2020. "The Clean Energy Package and Demand Response: Setting Correct Incentives," Energies, MDPI, vol. 13(21), pages 1-19, October.
    19. Macedo, Daniela Pereira & Marques, António Cardoso & Damette, Olivier, 2020. "The impact of the integration of renewable energy sources in the electricity price formation: is the Merit-Order Effect occurring in Portugal?," Utilities Policy, Elsevier, vol. 66(C).
    20. Mwampashi, Muthe Mathias & Nikitopoulos, Christina Sklibosios & Rai, Alan & Konstandatos, Otto, 2022. "Large-scale and rooftop solar generation in the NEM: A tale of two renewables strategies," Energy Economics, Elsevier, vol. 115(C).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:energy:v:176:y:2019:i:c:p:1-14. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.journals.elsevier.com/energy .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.