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Long-Term Electricity Investments Accounting for Demand and Supply Side Flexibility

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  • Marañón-Ledesma, Hector
  • Tomasgard, Asgeir

Abstract

Short-term Electricity Demand Response (DR) is an emerging technology in Europe's Electricity markets that will introduce a new degree of exibility. The objective of this work is to analyze to what extent the untapped DR potential can facilitate an optimal transition to an European low emission power system. The beneffits of DR consists of a reduction in peak load consumption, which leads to reduction in capacity investments, production and consumption savings, reduced congestion phases, reliable integration of intermittent renewable resources and supply and demand exibility. The capabilities of DR are studied in the European Model for Power Investment with (High Shares of) Renewable Energy (EMPIRE), which is an electricity sector model with a time span of 30 years ending in 2050. The model is two-stage stochastic that includes uncertainty at the operational level and energy economics dynamics at a strategic level. The main contribution of this article is designing the investment-operation DR module within the EMPIRE framework. It models several classes of shiftable and curtailable loads in residential, commercial and industrial sectors, including exibility periods, operational costs and endogenous DR investments, for 31 European countries. The results show that DR capacity substitutes partially exible supply side capacity from peak gas plants and battery storage, in addition to enabling more solar PV production.

Suggested Citation

  • Marañón-Ledesma, Hector & Tomasgard, Asgeir, 2019. "Long-Term Electricity Investments Accounting for Demand and Supply Side Flexibility," MPRA Paper 92957, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:92957
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    File URL: https://mpra.ub.uni-muenchen.de/92957/1/MPRA_paper_92957.pdf
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    References listed on IDEAS

    as
    1. Zerrahn, Alexander & Schill, Wolf-Peter, 2015. "On the representation of demand-side management in power system models," Energy, Elsevier, vol. 84(C), pages 840-845.
    2. repec:eee:appene:v:236:y:2019:i:c:p:401-409 is not listed on IDEAS
    3. Ottesen, Stig Odegaard & Tomasgard, Asgeir, 2015. "A stochastic model for scheduling energy flexibility in buildings," Energy, Elsevier, vol. 88(C), pages 364-376.
    4. repec:eee:appene:v:239:y:2019:i:c:p:836-845 is not listed on IDEAS
    5. Seljom, Pernille & Lindberg, Karen Byskov & Tomasgard, Asgeir & Doorman, Gerard & Sartori, Igor, 2017. "The impact of Zero Energy Buildings on the Scandinavian energy system," Energy, Elsevier, vol. 118(C), pages 284-296.
    6. Torriti, Jacopo & Hassan, Mohamed G. & Leach, Matthew, 2010. "Demand response experience in Europe: Policies, programmes and implementation," Energy, Elsevier, vol. 35(4), pages 1575-1583.
    7. repec:eee:appene:v:216:y:2018:i:c:p:296-310 is not listed on IDEAS
    8. Pfenninger, Stefan & Staffell, Iain, 2016. "Long-term patterns of European PV output using 30 years of validated hourly reanalysis and satellite data," Energy, Elsevier, vol. 114(C), pages 1251-1265.
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    More about this item

    Keywords

    Demand Response; Flexibility; Linear Stochastic Optimization; Demand Side Management; European Power System; Energy Economics;

    JEL classification:

    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • L90 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - General
    • L97 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Utilities: General

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