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Cost-optimal power system extension under flow-based market coupling

Author

Listed:
  • Hagspiel, S.
  • Jägemann, C.
  • Lindenberger, D.
  • Brown, T.
  • Cherevatskiy, S.
  • Tröster, E.

Abstract

Electricity market models, implemented as dynamic programming problems, have been applied widely to identify possible pathways towards a cost-optimal and low carbon electricity system. However, the joint optimization of generation and transmission remains challenging, mainly due to the fact that commercial trades do not directly translate into power flows on a specific line in meshed networks. Instead, loop flows occur and potentially impact the entire transmission system. This paper presents a methodology that allows optimizing transmission investments under flow-based market coupling and complements established electricity market models implemented in a linear programming environment that are suitable for solving large-scale problems. The algorithm developed is based on a linear ‘DC’ representation of the physical load flow equations, expressed as power transfer distribution factors (PTDFs). It iteratively updates the PTDFs when grid infrastructures are modified due to cost-optimal extension and thus yields an optimal solution with a consistent representation of physical load flows. The method is first demonstrated on a simplified three-node model where it is found to be robust and convergent. It is then applied to the European power system in order to find its cost-optimal development under the prescription of strongly decreasing CO2 emissions until 2050.

Suggested Citation

  • Hagspiel, S. & Jägemann, C. & Lindenberger, D. & Brown, T. & Cherevatskiy, S. & Tröster, E., 2014. "Cost-optimal power system extension under flow-based market coupling," Energy, Elsevier, vol. 66(C), pages 654-666.
    • Handle: RePEc:eee:energy:v:66:y:2014:i:c:p:654-666
    DOI: 10.1016/j.energy.2014.01.025
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    More about this item

    Keywords

    Power system planning; Power generation and transmission; Iterative linear optimization; PTDF; Flow-based market coupling;
    All these keywords.

    JEL classification:

    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
    • Q40 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - General

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