Economic and investment models for future grids: Final Report Project 3

This final Future Grid Cluster Project 3 report provides the deployment of key modelling results and the identification of strategic priorities for stakeholders. The purpose of the University of Queensland’s project has been to create “Economic and Investment Models for the Future Grid” and the primary objectives are as follows: Provide broad understanding of how the electricity sector will need to change in a carbon constrained world. This transition to a lower emissions intensive technology base will require significant structural and regulatory reform to the energy markets; Development of quantitative methods to analyse how price levels and volatility on the wholesale electricity market are affected by changes to the transmission network structure and technology deployment; Implement modelling platforms which can inform stakeholders in the energy market of how changing network structure and electricity generation technology effects electricity prices; Develop market simulation platforms for natural gas to gain a better understanding of how changing the fuel and technology mixes will affect the power delivery process; Develop a scenario planning tool set for future electricity market modelling. This deliverable 6 reports the final analysis and results for the Future Grid project for the University of Queensland (UQ). It is also intended to highlight the progress made on the following topics: Modelling the National Electricity Market under fuel price uncertainty and the shift from coal to gas as the primary fuel source in the generation fleet.The tools developed to model the east coast gas market are discussed in the previous deliverable report [1]. The planning and scenario development is discussed in brief below (section 2) and in [2-4]; Modelling the rise Renewable Energy with a proactive consumer base (“Prosumer”) and the effects on the electricity market. The details of proactive consumers affect electricity markets and the development of modelling techniques to accommodate this new consumer class are detailed more fully in [5, 2, 6, 4, 7]. This report summarises the work carried out by the Project 3 team and a separate report details the work of Future Grid Cluster and its interconnections and progress by other projects. The work carried out by this team is also summarized by several working papers available on the Energy Economics and Management Group website . Details of how this and other projects within the cluster have co-contributed to addressing the transition to a carbon constrained future is detailed in its final summary document.