FACULTY OF ELECTRICAL ENGINEERING AND COMPUTING TOMISLAV CAPUDER MARKET AND ENVIRONMENT DRIVEN OPTIMIZATION OF FLEXIBLE DISTRIBUTED MULTI-GENERATION DOCTORAL THESIS Zagreb, 2014 FACULTY OF ELECTRICAL ENGINEERING AND COMPUTING TOMISLAV CAPUDER MARKET AND ENVIRONMENT DRIVEN OPTIMIZATION OF FLEXIBLE DISTRIBUTED MULTI-GENERATION DOCTORAL THESIS Advisor: Professor Davor Škrlec, PhD Zagreb, 2014 FAKULTET ELEKTROTEHNIKE I RAČUNARSTVA TOMISLAV CAPUDER TRŽIŠNO I OKOLIŠNO UVJETOVANA OPTIMIZACIJA FLEKSIBILNIH DISTRIBUIRANIH VIŠEGENERACIJSKIH JEDINICA DOKTORSKI RAD Mentor: Prof. dr. sc. Davor Škrlec Zagreb, 2014. Doctoral thesis was defended at the University of Zagreb Faculty of electrical Engineering and Computing, at the Department of Energy and Power Systems. Advisor: Professor Davor Škrlec, PhD Doctoral Thesis has 121 pages. Doctoral thesis number: _______ Advisor’s Biography Davor Škrlec was born in Zagreb on 1st January, 1963. He graduate at the University of Zagreb Electrotechnical Faculty in 1986. in the field of Electrical Power Engineering and in the field of Nuclear Power Engineering. He received M.Sc. and Ph.D. degrees in electrical engineering (mentor prof. Slavko Krajcar) from the University of Zagreb, Faculty of Electrical Engineering and Computing (FER), Zagreb, Croatia, in 1990 and 1996 respectively. From January 1987 he is working at the Department of Energy and Power Systems at FER. From Janury 2012 until July 2012 he was assistant minister in the Ministry of Environmental and Nature Protection. In March 2012 he was promoted to Full Professor with tenure. He participated in 5 scientific projects financed by the Ministry of Science, Education and Sports of the Republic of Croatia , he was project coordinator in one industrial research project and one international project and participated in two bilateral research projects. Currently he is a involved in 2 EU FP7 projects. He published more than 80 papers in journals and conference proceedings in the area of planning and operation of electrical networks, integration of renewable and distributed resources, and application of geoinformation systems in power engineering. Professor Škrlec is a member of IEEE, CIGRE, CIRED and Croatian Nuclear Society. He participated in 5 conference international programs committees, he is member of a journal editorial board and he serves as a technical reviewer for various international journals and conferences. He received silver medal "Josip Lončar" from FER for outstanding Ph.D. theses in 1996. Životopis mentora Davor Škrlec je rođen 1. siječnja 1963. godine u Vinkovcima, Republika Hrvatska. Na Elektrotehničkom fakultetu u Zagrebu diplomirao je 1986. godine na smjeru Energetika, i na smjeru Nuklearna energetika. Magistrirao je i doktorirao u polju elektrotehnike (mentor prof.dr.sc. Slavko Krajcar) na Sveučilištu u Zagrebu Fakultetu elektrotehnike i računarstva, 1990. odnosno 1996. godine. Od siječnja 1987. godine zaposlen je na Zavodu za visoki napon i energetiku FER-a. Od siječnja do srpnja 2012. godine bio je pomoćnik ministra u Ministarstvu zaštite okoliša i prirode. U ožujku 2012. godine izabran je za redovitog profesora u trajnom zvanju. Sudjelovao je na pet znanstvenih projekata Ministarstva znanosti, obrazovanja i sporta Republike Hrvatske, na jednom od njih voditelj, i bio je voditelj domaćeg industrijskog znanstvenog projekta. Bio je voditelj jednog međunarodnog projekta i suradnik na dva međunarodna bilateralna projekta. Trenutačno je suradnik na dva FP7 projekta (Smartgrids ERA-Net i ACROSS). Objavio je više od 80 radova u časopisima i zbornicima konferencija iz područja planiranja i pogona elektroenergetskih mreža, integracije obnovljivih izvora energije i distribuirane proizvodnje u elektroenergetski sustav, te primjenu geoinformacijskih sustava u elektrotehnici i računarstvu. Profesor Škrlec je član je nekoliko stručnih organizacija u kojima obavlja ili je obavljao upravne funkcije: IEEE Hrvatska sekcija, HRO CIGRE, HO CIRED, Hrvatsko nuklearno društvo. Sudjeluje u 5 međunarodnih programskih odbora znanstvenih konferencija, član je uredničkog odbora znanstvenog časopisa te sudjeluje kao recenzent u većem broju inozemnih časopisa i konferencija. Odlukom Fakultetskog vijeća od 18. prosinca 1996. godine dodijeljena mu je srebrna plaketa "Josip Lončar" za posebno istaknutu doktorsku disertaciju. Abstract The share of renewable energy sources in electric power systems around the world is rapidly increasing and this trend is expected to continue in the future. According to "EU Energy and Climate Package" the European Union has set ground for future strategies indicating a goal of 20% share of renewable energy sources in total energy mix by the year 2020, together with 20% more efficient energy use, 20% reduced CO2 emissions and 10% more efficient transport. Several reports and documents indicate that development of Smart Grids and related technologies will be a key component in successful integrations of renewables. However, majority of the current energy system strategies, even in the Smart Grid concept, decouple different energy vectors and propose operational and strategic development schemes independent of each other. This in particular relates to cities as the number of people living in the cities is constantly increasing (today almost 70% of Europe’s population is living in the cities) and are producing around 80% of global carbon emissions. To this, energy is contributing with 75%. In the above mentioned context, modern cities need to be looked at as energy hubs where strategic planning decisions are a multilayer problem describing interactions between different infrastructures and multiple energy vectors. Capturing interactions between different infrastructures and taking into account a number of relevant factors needs to be recognized as a necessity for environmental and economic analyses in sustainable multi-energy system development. Electricity sector decarbonising strategies, supporting integration of renewable energy sources, are followed by the similar actions in heating, displacing carbon emissions usually by electrifying heat. In addition, growing environmental awareness and strong political support have promoted electric vehicles (EV) as an attractive means of transportation. This in turn means that two energy sectors, majorly contributing to overall CO2 emissions are directing their future decarbonising strategies towards electrification. The question is will future heat sector, based on electric heat pumps and electric resistors, and the electrified transport system in form of increasing EV integration, bring additional value in achieving goals of reducing CO2 emissions, or will the new passive electric load just further increase this issue. Opponents of integrating renewable energy sources frequently point out the uncertainty and variability of electricity production from renewable energy sources resources and difficulties related to planning and accurately predicting their output in time. A large share of variable production will inevitably cause changes in the electric power system control and dynamics and if concepts to system operation and planning do not change, electrification actions could have the opposite effect from the desired one. Distributed Generation is seen by many as the electricity production paradigm of the new millennium. In recent years, the Distributed Multi-Generation (DMG) concept has emerged as a concept of operation and planning beyond electricity only approach, whereby DG technologies based on thermal prime movers are capable of increasing the overall generation efficiency by producing manifold forms of energy, such as electricity, heat, cooling. Distributed MultiGeneration has the potential to provide primary energy saving and emission reduction relative to conventional separate generation. The power/energy a single distributed generation unit can provide to the system is rather small, thus there is a need for an aggregated market subject called a Virtual Power Plant (VPP), which is linking-up multiple small distributed power sources like wind turbines, combined heat and power (CHP) units, photovoltaic systems and flexible loads. Centralized control and participation in electricity market as one entity can bring benefits in terms of providing different services and better forecasting due to generation and consumption aggregation. On the above premise, the aim of this thesis is to define a comprehensive and unified technoeconomic and environmental modelling and optimization framework for the operational and planning evaluation of different DMG options for district energy systems. The concept of flexibility, seen here from the twofold point of view of operational flexibility (capability to respond to price signals in close to real time) and planning flexibility (robustness to evolving scenarios and capability to adapt to changing market conditions), will be analyzed in detail for the different options. Keywords: cogeneration, distributed multi-generation, electric heat pumps, flexibility, multienergy systems, virtual power plant, thermal storage Sažetak "Tržišno i okolišno uvjetovana optimizacija fleksibilnih distribuiranih višegeneracijskih jedinica" Sigurnost opskrbe energijom danas još uvijek velikim dijelom ovisi o dostupnosti osnovnih energenata, fosilnih goriva. Istovremeno projekcije potrošnje električne energije predviđaju utrostručenje ukupne potrošnje energije u svijetu do 2050. godine. Upravo iz tih razloga, u dokumentu "EU Energy and Climate Package", razvojna energetska politika Europske unije postavila je ciljeve: 20% udjela obnovljivih izvora energije, 20% povećanu učinkovitost korištenja energije, 20% manje emisije CO2 i 10% veću učinkovitost prometnog sektora do 2020. godine. Danas je udio obnovljivih izvora u ukupnoj proizvodnji oko 3%, no pretpostavlja se da će se taj postotak udvostručavati svake tri godine. Kao jedan od ključnih čimbenika u uspješnoj integraciji visokog udjela obnovljivih izvora energije promovira se implementacija koncepata naprednih energetskih mreža - Smart Grida. Većina energetskih strategija danas, čak i u konceptu Smart Grida, razdvaja planiranja i strategije energetskih sektora, ne prepoznajući važnost i prednosti njihove interakcije. Posebno se to odnosi na gradove, u kojima danas u Europi živi preko 70% populacije, koji proizvode oko 80% globalnih emisija stakleničkih plinova. Stoga moderne gradove treba razmatrati kao energetska čvorišta u kojim se odvijaju interakcije svih energetskih vektora, te njihove strategije planiranja i razvoja moraju usvojiti multidisciplinarni pristup. Jedino obuhvaćanjem velikog broja relevantnih faktora, koji adekvatno opisuju uzročno posljedične povezanosti, moguće je provesti kvalitetnu strategiju održivog razvoja za budućnost. Strategije usmjerene na dekarbonizaciju elektroenergetskog sektora prate slične smjernice u toplinskom sektoru, gdje se koncepti smanjenja CO2 emisija uglavnom usmjeravaju prema elektrifikaciji grijanja. Razvijena ekološka svijest istovremeno utječe na sve veće usmjeravanje prometnog sektora prema električnim vozilima kao učinkovitom, ekološkom i atraktivnom načinu prijevoza u budućnosti. Posljedično, to znači da dva važna sektora, koji doprinose ukupnim CO2 emisijama preko 70%, usmjeravaju svoje strategije prema elektrifikaciji. Postavlja se pitanje hoće li budući toplinski sektor, temeljen na dizalicama topline i električnim grijačima te promet usmjeren električnim vozilima, doprinijeti smanjenju stakleničkih plinova ili će se ponašati kao dodatni pasivni teret i još više produbiti problem. Pitanje je na koji način će se takve promjene reflektirati na budući elektroenergetski sektor. Protivnici integracije obnovljivih izvora energije naglašavaju promjenjivu i nepredvidljivu prirodu proizvodnje kao prepreku dobrom vođenju budućih elektroenergetskih sustava; s razlogom, jer veći broj obnovljivih izvora energije neminovno traži promjenu koncepata vođenja sustava, kako učinak njihove integracije ne bi bio upravo suprotan željenom. Pravo pitanje je koje su to promjene potrebne i na kojim razinama se moraju provesti kako bi se mogli uspješno ostvarili zacrtani ciljevi. Distribuiranu proizvodnju mnogi vide kao paradigmu proizvodnje električne energije u novom tisućljeću. U posljednjih nekoliko godina koncept distribuiranih jedinica nadišao je razinu proizvodnje električne energije, pri čemu su tehnologije distribuirane proizvodnje koje se temelje na unutrašnjem izgaranju sposobne povećati ukupnu učinkovitost proizvodnjom više oblika korisne energije poput električne energije te energije grijanja i hlađenja. Pritom se iskorištava otpadna toplina (na primjer u klasičnim kogeneracijskim postrojenjima) i/ili međusobnim povezivanjem takvih jedinica kao na primjer električne dizalice topline s rashladnim, apsorpcijskim uređajima te toplinskim spremnicima. Višegeneracijske jedinice imaju potencijal uštede primarne energije i smanjenja emisije stakleničkih plinova u odnosu na konvencionalnu, odvojenu proizvodnju korisnih oblika energije. Unatoč tome jedinice distribuirane proizvodnje danas su najčešće spojene na elektroenergetsku mrežu kao pasivni subjekti, njihova proizvodnja određena je ili samo pokrivanjem zahtjeva za toplinskom energijom (u tom slučaju električna energija je nusprodukt koji se predaje u elektroenergetsku mrežu) ili iznosom poticaja koji je moguće dobiti za električnu energiju predanu u mrežu, čime se ubrzava povrat njihove investicije. Ovakav način rada i pristupa rijetko odgovara zahtjevima sustava, a puno češće stvara probleme tehničke prirode. Razlozi ovakvog načina rada su višestruki, od neutvrđenih adekvatnih regulatornih okvira, nepostojanja naprednih upravljačkih algoritama, do nedovoljno razvijene ICT infrastrukture, kojom bi se prikupljali i slali odgovarajući procesni podatci za upravljanje spomenutim jedinicama. Distribuirani energetski sustavi stoga će imati značajnu ulogu u stvaranju održive energetske budućnosti. Višegeneracijske jedinice za kombiniranu proizvodnju različitih energetskih vektora su učinkovito rješenje za povećanje energetske učinkovitosti. Najjednostavniji koncept više energetske proizvodne jedinice je kogeneracijska elektrana koja proizvodi toplinsku i električnu energiju iz istog ulaznog goriva, a njene prednosti u odnosu na odvojenu konvencionalnu proizvodnju dobro su poznate. S druge strane, električne dizalice topline smatraju se učinkovitom i ekonomičnom alternativom postojećim kotlovima, a imaju sposobnost smanjenja emisija stakleničkih plinova u sektoru toplinarstva (samo u slučaju kada i elektroenergetski sektor postaje dekarboniziran). Veća integracija električnih dizalica znatno povećava opterećenja elektroenergetske mreže na koju se priključuju, pa odabir ove tehnologije neminovno zahtijeva daljnja ulaganja u elektroenergetsku infrastrukturu. Standardne kogeneracijske jedinice malih i srednjih instaliranih snaga (do 10 MW) imaju zanemarivu sposobnost u reagiranju na tržišne cijene električne energije i samim time na zahtjeve elektroenergetskog sustava. Da bi mogle reagirati na upravljačke signale, kogeneracijske jedinice trebaju biti fleksibilnije, te je upravo iz ovog razloga prepoznata važnost povezivanja takvih jedinica sa spremnicima topline. I dok su prednosti povezivanja kogeneracijskih jedinica sa spremnicima topline jasne, potencijal spajanja kogeneracijskih jedinica i dizalica topline (uz dodatak toplinskog spremnika), s ciljem povećanja fleksibilnosti u odnosu na zahtjeve sustava, je manje istražen. Ovakav koncept imao bi dodatnu vrijednost u budućim elektroenergetskim sustavima s velikim udjelom obnovljivih izvora energije, kad je moguće višak proizvedene električne energije iskoristiti preusmjeravanjem između energetskih vektora. Aktualna istraživanja sugeriraju da bi upravo kombinacija više tehnologija mogla biti optimalno rješenje u suočavanju s promjenjivošću elektroenergetskog opterećenja, uzrokovanom povećanim udjelom obnovljivih izvora energije, no to pitanje još nije sustavno istraženo. Nadalje, ne postoje praktična iskustva, a vrlo je malo sustavnih modela distribuiranih višeenergetskih jedinica, posebno onih temeljenih na kombinaciji kogeneracije i dizalica topline, te stoga njihova uloga ostaje prilično nejasna. Neizvjestan i vrlo dinamičan kontekst budućeg energetskog sustava otvara put istraživanju novih, složenih i inovativnih mogućnosti, temeljenih na kogeneracijskim jedinicama i dizalicama topline, koje bi mogle biti učinkovito implementirane s ciljem poboljšanja ekonomskih i ekoloških performansi budućih energetskih sustava. Dodatni izazov predstavlja integracija cjelovitog višegeneracijskog sustava, koji obuhvaća cijeli niz tehnologija prilagođenih različitim tipovima potrošača i potrošnji različitih energetskih vektora. Složenost ovog problema povećava se ukoliko takav sustav mora biti u mogućnosti održavati stabilnost i sigurnost opskrbe zasebno od ostatka energetskog sustava. Koncept je posebno zanimljiv u industrijskim postrojenjima, gdje postoji relativno konstantna potrošnja više energetskih vektora te je neprekinutost opskrbe od velike važnosti. Ovakvi integrirani koncepti moraju imati veliku fleksibilnost u radu te biti sposobni odgovoriti na promjene u potražnji ili cijeni energije/energenata. Ta sposobnost se očituje u mogućnosti premještanja proizvodnje s jednog energetskog vektora na drugi kao i u skladištenju određenog energetskog vektora u adekvatnim spremnicima, čime krajnji korisnik/potrošač uvijek dobije željenu energetsku uslugu. Posebno je važno naglasiti da takvi sustavi ostvaruju i značajne uštede emisija CO2, a njihove tehničke karakteristike omogućuju znatno veću integraciju neupravljivih, ali CO2 neutralnih, obnovljivih izvora energije, kao što su solarne i vjetroelektrane. S obzirom na to da su jedinice distribuirane proizvodnje najčešće male snage, do nekoliko MW, nisu u mogućnosti sudjelovati na tržištu električnom energijom. Postoje izuzetci, kao što su tržišta Njemačke i Danske, međutim s obzirom na mali utjecaj, njihovo sudjelovanje ograničeno je na tržište dan unaprijed. Agregiranjem u jedan tržišni subjekt, poznat kao virtualna elektrana, takve jedinice imaju mogućnost boljeg pozicioniranja na tržištu te mogućnost sudjelovanja na više tržišta koja pružaju različite usluge. Iz navedenih pretpostavki postavljen je cilj ovog rada: definirati cjeloviti i jedinstveni tehnoekonomski i okolišni model, te izgraditi optimizacijsku platformu za operativno planiranje različitih višegeneracijskih sustava. Takvi sustavi moraju biti fleksibilni, kako bi mogli odgovarati na signale i zahtjeve sustava. Koncept fleksibilnosti, promatran s dvojakog gledišta operativne fleksibilnosti (sposobnost da reagira na cjenovne signale u stvarnom vremenu), i fleksibilnosti planiranja (robusnost prema razvijenim scenarijima i sposobnost prilagodbe promjenama tržišnih uvjeta), detaljno je analiziran za različite opcije. Kroz analize osjetljivosti za svaku višegeneracijsku jedinicu pokazana je njena fleksibilnost, te izračunate ekonomske i okolišne prednosti koje je moguće postići koordiniranjem i grupiranjem kogeneracijskih jedinica s dizalicama topline i toplinskim spremnicima. U doktorskoj disertaciji bit će prikazana sustavna i sveobuhvatna slika prednosti i nedostataka različitih opcija višegeneracijskih jedinica. Ključne riječi: distribuirane višegeneracijske jedinice, dizalice topline, fleksibilnost, kogeneracija, virtualna elektrana, više energetski sustavi, toplinski spremnici TABLE OF CONTENTS INTRODUCTION ......................................................................................................................................................... 1 A. Thesis outline .................................................................................................................................................... 4 MODELLING AND OPTIMIZATION OF DISTRIBUTED MULTI-GENERATION DISTRICT HEATING OPTIONS....................................................................................................................................................................... 6 A. Multi-energy systems ........................................................................................................................................ 6 B. Techno-economic and environmental modelling and optimization framework for DH DMG options............. 9 C. B.1. Description of DH DMG options ............................................................................................................. 9 B.2. Unified mathematical formulation of the DMG DH modelling and optimization problem ................... 11 B.3. Operational optimization problem formulation ...................................................................................... 13 Environmental models .................................................................................................................................... 17 C.1. Primary energy saving ............................................................................................................................ 17 C.2. CO2 emission reduction .......................................................................................................................... 18 C.3. Local emission reduction ....................................................................................................................... 19 ECONOMIC ANALYSES OF DMG DH OPTIONS .................................................................................................. 20 A. Case study description and equipment sizing ................................................................................................. 20 B. Daily operational analysis ............................................................................................................................... 20 B.1. Winter..................................................................................................................................................... 21 B.2. Spring/Autumn ....................................................................................................................................... 27 B.3. Summer .................................................................................................................................................. 31 C. Annual operational synthesis .......................................................................................................................... 34 D. Sensitivity analysis on base case design parameters ....................................................................................... 37 E. Discussion of the results, planning analysis and robustness test ..................................................................... 40 ENVIRONMENTAL ANALYSES OF DMG DH OPTIONS..................................................................................... 44 A. Primary energy saving assessment .................................................................................................................. 44 B. CO2 emission reduction .................................................................................................................................. 45 C. Local emission reduction ................................................................................................................................ 48 MODELLING APPROXIMATIONS .......................................................................................................................... 50 A. Economic analyses .......................................................................................................................................... 50 B. Environmental analyses .................................................................................................................................. 58 FLEXIBILITY - A KEY ELEMENT IN OPERATION AND PLANNING OF LOW CARBON ENERGY SYSTEMS.................................................................................................................................................................... 61 A. Defining flexibility.......................................................................................................................................... 61 B. Sources of flexibility ....................................................................................................................................... 65 C. B.1. Storage ................................................................................................................................................... 66 B.2. Flexible generation ................................................................................................................................. 68 B.3. Demand response (DR) .......................................................................................................................... 68 B.4. Electric vehicles (EV) ............................................................................................................................. 70 Quantifying flexibility .................................................................................................................................... 72 C.1. Operational flexibility ............................................................................................................................ 72 C.2. Planning flexibility ................................................................................................................................. 74 D. Multi-energy system flexibility aspect ............................................................................................................ 76 E. Operational flexibility metric of Distributed Multi-Generation ...................................................................... 80 F. Discussion ....................................................................................................................................................... 89 MULTI-ENERGY VIRTUAL POWER PLANT ........................................................................................................ 90 A. The concept of Virtual Power Plant ................................................................................................................ 90 B. Modelling and economic analysis of Multi-Energy Virtual Power Plant ....................................................... 92 C. Future work ..................................................................................................................................................... 96 CONCLUSION ............................................................................................................................................................ 98 BIBLIOGRAPHY ...................................................................................................................................................... 100 LIST OF FIGURES ................................................................................................................................................... 113 LIST OF TABLES ..................................................................................................................................................... 115 NOMENCLATURE................................................................................................................................................... 116 BIOGRAPHY ............................................................................................................................................................ 119 ŽIVOTOPIS ............................................................................................................................................................... 122 1 INTRODUCTION There are significant efforts worldwide, from research to policy initiatives, to support the integration of renewable energy resources into the power system. These ideas are particularly emphasising the deployment of innovative concepts such as the Smart Grid. However, meeting challenging environmental targets and guaranteeing secure and affordable energy to present and future generations, require clear strategies addressing all energy sectors and not only electricity . Particularly they refer to heating, cooling and transport, as they account for over 70% in total energy consumption, greenhouse gas emissions and pollution. In addition these sectors are, in most cases, based on fossil primary energy and might even be harder to decarbonise than the electricity sector. Traditionally, different energy sectors have been decoupled from both operational and planning viewpoints, although tight interactions have always taken place. For instance, electricity, heat/cooling and gas networks interact in many cases through various distributed technologies such as combined heat and power (CHP), electric heat pumps (EHP), air conditioning devices, trigeneration of electricity heat and cooling , . Similar interactions between electricity and the transport sector are becoming more emphasised by means of electric vehicles (EV) or bio-fuels and hydrogen transport, emphasizing their relevance to future planning and operation, especially since they are becoming more accepted by end users. Although today's energy systems are in fact multi-energy in nature, it is arguable how much efficiency from coupling different energy vectors through known technologies is presently exploited. In particular, there are very few models that are capable of assessing, in a quantitative manner, the benefits that could be derived from different multi-generation options including Combined Heat and Power (CHP) and Electric Heat Pumps (EHP), both considered high efficiency technologies. In addition, particularly when associated to thermal storage, such integrated options can bring significant benefits in terms of operational flexibility to respond to market prices. The goal of this thesis is to develop and present a unified and comprehensive framework and a relevant Mixed Integer Linear Programming (MILP) model suitable for evaluating economic and environmental benefits from different Distributed Multi-Generation (DMG) options for District Heating (DH) applications. Each option’s operational cost and benefit and flexibility to respond to electricity market signals is analysed in detail and assessed against 2 the needed investment costs in different scenarios, with focus on the flexibility gained from equipment integration. Detailed sensitivity analyses of different DMG configurations clearly show what economic and environmental benefits (both at the global and the local level) can be derived from coupling different energy vectors in current and future scenarios. Throughout the thesis several aspects of Multi-Energy systems are researched, analyzed and elaborated. The findings are presented in the following Chapters and the contribution of the thesis can be summarized as: • Proposing a mathematical model for optimal operation of defined district heating schemes. This has been done by: (a) defining seven different district heating types and (b) creating a mathematical formulation that describes each of these types in a unified way. To be more precise: the work recognizes existing district heating schemes and suggests new, more flexible ones. All of the types are already mentioned in the literature but there is no unified mathematical formulation describing optimal operation of all of them nor is there a comparison of their optimal operation and benefits for choosing a certain type. The mathematical model is formulated in such a way that each of the type can with regards to pieces of equipment be considered as a subtype is the most comprehensive one. In spite of its simplicity (which is indeed one of the upside of the formulation), the importance of such a formulation is in its power to model and simulate in a synthetic way each and all district heating type (basically covering all the fundamental schemes with market available equipment) for any application/location. This is done in a way that relevant decision variables are set to zero if equipment operation is not considered in the simulation. Such a synthetic and systematic formulation for DMG system optimization is new in the literature and allows, amongst the others, highlighting synergies (particularly in terms of flexibility features) and differences between CHP and EHP. • Defining, assessing and comparing operational flexibility of different multi-generation options. This is done in economic terms by assessing the operational benefits from running the different types and by highlighting how the introduction of different pieces of equipment (for instance, by coupling thermal energy storage to CHP or EHP, or by cascading EHP to CHP) changes/improves the economic performance of the scheme owing to the changed/improved level of flexibility and subsequent capability to respond to market signals. 3 • Optimal unit sizing for each defined DMG district heating type through sensitivity analyses of both investment cost and operational cost. In particular, it has been shown how different sizes impact the operational cost in different type solutions resulting in determining the optimal unit sizes, taking into account the investment cost in a detailed Net Present Value (NPV) analysis. With increasing flexibility requirements in energy systems, presented studies thus provide key insights on the benefits of integrating different pieces of equipment for both operational and planning perspectives. • Assessment of the global and local environmental benefits (global and local emission reduction and primary energy saving) under different scenarios. The contribution is therefore not limited only to assessment of the economic benefits of different district heating schemes; but it also refers to the appraisal of different environmental impacts. Amongst the others, each DMG type is analyzed for the entire period of 2011 and 2012 in terms of CO2 emission reduction, providing knowledge of the benefits each type can have under current conditions. In addition, different possible future scenarios are also analysed in terms of decarbonisation of both the power grid and the fuel inputs. This enables assessment of future environmental performance and gives insights on the environmental robustness of given schemes under changing energy systems. Local impact analysis is performed to complement the global one, highlighting pros and cons of different schemes in the light of local pollution. Such systematic assessments of DMG schemes under economic and multiple environmental criteria are new in the literature. • Defining flexibility of the future low carbon energy systems. The contribution of this part is twofold: i) giving a comprehensive literature review, defining the concept of flexibility and technical constraints which are limiting or providing additional flexibility in the system; ii) defining operating flexibility metric for distributed multi-generation systems. This metric evaluates additional flexibility that can be gained by shifting energy vector production from one component to the other, depending on the signals and requests from the upstream system. In the context of this metric, evaluation of flexibility for the most comprehensive DMG type is given for typical seasonal days and elaborated in the context of additional service provision. • Defining the concept of aggregated DMG units in Multi-Energy Virtual Power Plant. Presented concept brings a unified framework for assessing the operational benefits as 4 well as benefits of DMG unit aggregation in a form of economic benefit matrix. The presented analyses clearly show additional operational cost reduction from unit aggregation, resulting from the capability to optimally select the lowest marginal cost unit. Over a range of market price scenarios, the concept evaluates benefits of aggregating same type units and compares it to aggregating different types of DMG units. A. Thesis outline First Chapter serves as an introduction to the multi-generation concept and explains the interactions between different energy systems. Through general guidelines the idea of doctoral thesis is explained as well as the main contributions. Second Chapter defines different types of multi-generation units followed by a unified mathematical formulation. The developed model enables detailed financial and environmental analysis of each type including detailed analyses resulting from altering input parameters. Third Chapter presents detailed financial analysis of investment and operation of distributed multi-generation units. Through daily operational analyses, the capabilities of different types to respond to changes in power system are defined with respect to potential savings. Optimal unit size for each type is defined. Results are supported by a detailed investment analysis considering the price changes in electricity, gas and discount rates which demonstrate robustness of the proposed model. Fourth Chapter provides a detailed environmental analysis for each multi-generation unit. All relevant parameters, from global level perspective (CO2 emissions) to local level analyses (primary energy savings and local emissions), are included. Fifth Chapter presents approximations made to the mathematical model presented in previous chapters. It elaborates, and supports this with relevant results, that approximations introduced do not affect the quality and accuracy of the obtained results but highly improve time needed for solving the optimization algorithm. Sixth Chapter provides a detailed overview of flexibility concept highlighting the importance of flexibility in future power systems operation and planning. Multi-generation unit flexibility is defined recognizing the benefits of interaction of multiple energy vectors. The Chapter introduced operational flexibility metric for distributed multi-generation systems at district energy level. 5 Seventh Chapter defines the aggregation concept of multi-generation units through a concept of multi-energy virtual power plant. Financial analyses show that, in addition to reduced costs and emissions savings gained from optimal operation of single units, aggregation brings additional benefits creating a better position for aggregated units at the electrical energy market. Eighth Chapter summarizes presented work, emphasising key conclusions and scientific contributions. It also makes suggestions and guidelines for future work. 6 MODELLING AND OPTIMIZATION OF DISTRIBUTED MULTIGENERATION DISTRICT HEATING OPTIONS A. Multi-energy systems In the light of the increasing interest for multi-energy systems, where multiple energy vectors optimally interact with each other , district energy systems are likely to play a more and more important role in delivering a sustainable energy future, particularly with the projected number of people living in cities constantly increasing. In this outlook, multi-generation options for combined production of different energy vectors , ,  are an effective solution to increase energy efficiency, particularly in urban areas and in district energy systems. The simplest multigeneration concept is combined heat and power (CHP), producing usable heat and electricity from a certain input fuel. Advantages of combined heat and power plants, with respect to the conventional separate production (SP) of electricity and heat, are well known , . In  the author elaborates on basic efficiency concepts determined by the European Directive for the promotion of cogeneration, providing guidelines on defining primary energy savings of CHP units which are eligible for financial benefits. Economic and environmental advantages of CHP units for district heating (DH) systems are analyzed in  and . Electric heat pumps (EHP), also considered as an efficient and economic alternative to existing boilers, have a capability to decarbonise the heating sector but are dependent on concurrent decarbonisation of electricity generation. In addition, large integration of EHP means significant increase of electricity load in the grid. This will eventually require further investments in the electric grid infrastructure . Conventional small to medium scale CHP units are negligibly flexible in responding to electricity market prices as they have a primary task of covering demand (of heat or in limited cases of electricity), and in order to be able to cope with more volatile energy prices they need to be more flexible. This is where the importance of coupling with Thermal Energy Storage (TES) is recognized, most noticeably in Denmark where this strategy was initially supported by three level feed-in-tariff; today even smaller distributed units are allowed to participate in the electricity dayahead market . Several other countries have introduced incentives for wide spread integration of DH CHP systems such as Germany . Sweden has instead decided to focus its heating policy on EHP systems which have already been installed in Stockholm . Despite the primary focus on EHP in Sweden, city of Linköping is also supplied by CHP coupled with TES . The 7 UK is also committed to the decarbonisation of the whole energy sector and heating in particular. In this respect, different strategies have been proposed , , , to follow up on experience and successful implementations of the Danish/Swedish energy policies. Studies researching the optimal size of CHP coupled with TES for the case of DH in the UK are presented in , . Today only 2% of UK consumers are connected to DH systems, but estimates  suggest this technology could have a significant share in heat supply for 40 million forecasted UK consumers in 2030. While benefits enabled by thermal storage are fairly clear, there is less understanding of the potential to couple CHP to EHP (and in case storage too) to gain significant flexibility to respond to system requirements and prices. These systems could have an even greater value in future electricity systems with large share of renewable energy sources when excess electricity can be harvested by shifting between energy vectors , . Some papers indeed conclude that combination of technologies could be the optimal solution in coping with volatility of net electricity load caused by increasing share of renewable energy sources , but this issue has not been explored systematically as yet. In particular, there are neither experiences nor comprehensive modelling framework and systematic studies on Distributed Multi-Generation (DMG) ,  options, particularly the ones based on combination of CHP and EHP and whose role remains relatively unclear. This uncertain but very dynamic context thus paves the way to the opportunity of exploring new alternative and innovative DMG options based on CHP and EHP that could be effectively deployed to increase the economic and environmental performance of future DH systems, particularly in the UK. The potential benefits these systems bring are already recognized in different countries , , , and for different district energy system applications , . The term “equivalent cogeneration plant” is for instance introduced in  exemplifying the benefits of cascading CHP-EHP through energy shifting factors. This concept can provide significant emission reduction  as well as primary energy savings, as also shown in , . The concept is further expanded to capture the flexibility benefits of multi-generation units in , . The idea of CHP-EHP where EHP uses cooled stored air from flue gases of CHP as a “free fuel” is presented in , . These papers can be considered state-of the art in terms of coupling different units and increasing flexibility by operational shifting between different energy 8 vectors. However, there is no comprehensive market and environmental analysis of such DMG options. On the above premises, the aim of this work is to define a comprehensive and unified technoeconomic and environmental modelling and optimization framework for the operational and planning evaluation of different DMG options for DH systems. The concept of flexibility, seen here from the point of view of operational flexibility (capability to respond to price signals in close to real time), is analysed in detail for the different options. In addition, the different DMG options are also assessed from an investment perspective, also considering different price scenarios, as well as from an environmental perspective considering both local (from local pollution) and global impact (primary energy consumption and CO2 emissions) impact and in different scenarios. In this way, a systematic and comprehensive picture of pros and cons of different DMG options in different contexts will be provided. The rest of the Chapter is organized as follows. Section II defines different district heating DMG options and presents a unified MILP market based mathematical model, as well as the relevant and consistent environmental assessment models. Numerical case study examples are elaborated in Section III, exemplifying market driven operation of different options in a realistic UK context. Sensitivity analyses are also run to assess the robustness of the optimal solutions, and investment and environmental analyses further highlight the benefits gained by each DMG option in different conditions. Conclusions and guidelines for future work are presented in Section IV. 9 B. Techno-economic and environmental modelling and optimization framework for DH DMG options B.1. Description of DH DMG options This Section introduces a comprehensive and synthetic modelling framework that, in a unified fashion, can perform description and optimization of all the considered DH DMG options enabling simple simulations of similar studies. For the purpose of systematic techno-economic comparison, this thesis defines seven different DH schemes based on DMG options: • Type 1: A conventional boiler is considered throughout the paper as a reference case for comparing other proposed DH schemes. A centrally connected boiler produces heat and, through a heat network, supplies consumers. Electricity demand is satisfied through electrical network connection and electricity is produced by the incumbent bulk generation system and is assumed to be purchased on the wholesale market. • Type 2: A central EHP system provides heat using electricity from the electricity grid. As in the first case, electricity demand is supplied through the electricity grid. • Type 3: Thermal energy storage (TES) is added here to the scheme proposed in type 2, with the idea of bringing additional flexibility in the heating side. • Type 4: CHP-AB system. This is the prevailing DH concept with CHP units, where an auxiliary boiler (AB) is utilized only for covering peak heat demand or for back-up. Electricity can be bought from or sold to the electrical grid. • Type 5: CHP-AB-TES system. Thermal storage here provides flexibility to the CHP unit, enabling it to decouple its operation from heat demand following. • Type 6: CHP-AB-EHP system. An EHP unit is cascaded to CHP. The inherent flexibility of supplying electricity and heat from different inputs in principle significantly increases responsiveness to price signals and variable demand. • Type 7: CHP-AB-EHP-TES system. This scheme combines the benefits of the previous two types cascading CHP with a TES and EHP, gaining additional flexibility. The relevant energy flow layout of all defined DMG types is presented in Figure 1. 10 Eimp Eimp Eexp EDS EDS ED ED Faux Haux Boiler ηaux C O N S U M E R S ED, HD Echp C O N S U M E R S ED, HD CHP ηe, ηe Hchp Haux Auxiliary boiler ηt d) a) Eimp Eexp Eimp EDS EDS ED ED Ehp Fchp Electric Heat Pump COP C O N S U M E R S ED, HD Hhp CHP ηe, ηe Echp Hchp Faux Auxiliary boiler ηt Haux e) Eimp Eexp b) EDS (1-α)Echp Eimp EDS ED Ehp Electric Heat Pump COP HD TES Hs C O N S U M E R S ED, HD Hhp TES Hs c) HD C O N S U M E R S ED, HD Fchp Ehp αEchp CHP ηe, ηt Hchp Haux Faux Auxiliary boiler ηaux f) Electric Heat Pump COP ED Hhp C O N S U M E R S ED, HD 11 Eimp Eexp (1-α)Echp EDS Fchp ED Ehp αEchp CHP ηe, ηt Electric Heat Pump COP Hhp Hchp TES Hs Haux Faux Auxiliary boiler ηaux C O N S U M E R S ED, HD g) Figure 1 Energy flow layout of a) DMG type 1, b) DMG type 2, c) DMG type 3, d) DMG type 4, e) DMG type 5, f) DMG type 6, g) DMG type 7 B.2. Unified mathematical formulation of the DMG DH modelling and optimization problem Mathematical models describing CHP short term operation go back to Püttgen et al. , . An interesting approach using mixed-integer formulations describing operation of large back steam pressure CHP units with feasible generation region can be found in  and . In  the authors present a conceptual approach to modelling each grid user in a unified way as power nodes, consisting of its belonging efficiencies, losses, demand and generation, covering all electro-chemical conversions. The concept of power nodes is a unified way of presenting a single consumer/producer/storage and its interaction with the grid. However, there is no market-driven or other type of optimization developed in the model. A complete overview on short-term operational modelling of CHP units can be found in  giving an understanding on different operational limits and technical constraints. Recent focus has been turned to smaller distributed generation CHP units as they are becoming a relevant factor in electricity markets; for instance, in  the authors present a mathematical model for µCHP unit coupled with TES, comparing different operating scenarios for fuel cells. In  the authors propose a mathematical model for economic evaluation to supply electricity, heating and cooling load to a food factory by coupling CHP and EHP. Mehleri et al present a mathematical modelling approach to planning the entire district energy system taking into account the investment and the operation cost of different 12 technologies . However, the model relies on fixed grid prices and fixed feed-in tariffs for photovoltaic (PV) and µCHP and thus the operation of each unit (and the entire microgrid) is implicitly led by demand and does not exploit potential flexibility. In  the authors propose a mathematical formulation for a single µCHP unit and a cluster of µCHP units, each with its own thermal storage decoupling demand and production, enabling each unit to be more flexible and have lower operational cost. Further flexibility in the considered microgrid is also provided by a centralized TES unit. However, there is no consideration of EHPs. An interesting approach that synthesizes different pieces of equipment with the goal of finding optimal superstructure of power plant types, auxiliary equipment, and heat networks is described in , . The concept of superstructure is applied for the design of trigeneration system in . The same group of authors previously worked on the optimal trigeneration system design using evolutionary algorithm component based modelling . However, none of these papers elaborates on the operational flexibility which can be gained by adding or replacing a certain piece of equipment. Also, there is a lack of comprehensive investment studies as well as environmental impact studies. From the systematic literature review analysis that was carried out, it emerges that all the models currently available are either case specific or lack methodical assessment of the marginal effect of equipment addition/substitution. Further none can represent comprehensively and consistently different DMG options including CHP, EHP and TES, and their flexibility in terms of operational optimization. Additionally there is no unified approach to operational, investment and environmental assessment. On the contrary, the developed MILP model discussed in the following Section is capable of capturing the optimal operation of all the DMG types presented above, namely types 2-7, and this is done by developing a synthetic problem formulation that entails all the considered options in a unified way. Figure 2 illustrates through a flow chart the idea of how each DMG type can be “created” by combining different pieces of equipment. More specifically, while DMG type 2 and DMG type 4 are a single “generation” unit types, composed only of EHP (type 2) or CHP (type 4), all remaining DMG types are structured as cascades of either or both of these units along with storage. From the figure, it can also be appreciated how DMG type 7 is the most complex one and all other DMG types can be considered as subtypes of type 7. 13 DMG TYPE 7 CASCADED EHP TES CHP CASCADED CASCADED CASCADED DMG TYPE 2 DMG TYPE 6 DMG TYPE 3 DMG TYPE 5 DMG TYPE 4 Figure 2 DMG types creation flow diagram B.3. Operational optimization problem formulation The general operational optimization problem under analysis here can be stated as minimize OPERATION = T ∑ C ( t ) + C t =1 fuel elec _ buy (t ) − Celec _ sell (t ) (2.1) Equation (2.1) contains the objective function to minimize, that is, the operational cost for each of DMG units taking into account fuel and electricity prices for each components of the specific option (CHP, EHP, boiler, TES). The objective function is oriented towards assessing economic benefits and does not include Operation and Maintenance cost (O&M) in order to better highlight the economic performance of the different options based on energy prices. However, O&M can be easily incorporated in the framework. In terms of problem constraints, starting from the flow chart in Figure 2, in the following all constraint equations for each and all DMG types are formulated in a unified and comprehensive way by making use of a suitable superscript notation. More specifically, a superscript from 2 to 7 14 in each parameter or variable of the relevant constraint equation indicates that the relevant item exists only in that DMG type associated to the specific superscript number. Starting from the modelling of the CHP, in Eqs. (2.2) and (2.3), the CHP electricity output Echp and heat output Hchp are defined at each time step starting from the fuel input Fchp through the relevant electrical efficiency ηe and thermal efficiency ηt, respectively (superscripts in these equations indicate the CHP can be found only in DMG types 4, 5, 6 and 7). Electrical and thermal efficiency of the CHP unit are typically a function of the loading level. However, for the sake of simplicity, an approximation is made in the formulation and it is assumed that efficiencies are constant with the loading level, as for instance done in ,  and : Echp ( t ) 4,5,6,7 H chp ( t ) = Fchp ( t ) 4,5,6,7 4,5,6,7 = Fchp ( t ) *ηe ( t ) 4,5,6,7 4,5,6,7 *ηt ( t ) 4,5,6,7 (2.2) (2.3) The CHP electricity output is limited by its upper limit Echp_max (maximum power) and by its lower limit Echp_min (also called Minimum Stable Generation – MSG). If we indicate with Ichp a binary decision variable that takes the value of 1 when the CHP unit is on and 0 when the CHP unit is off, the CHP electricity production constraints can therefore be expressed as: I chp (t ) 4,5,6,7 * Echp _ min ≤ Echp ( t ) 4,5,6,7 ≤ I chp (t ) 4,5,6,7 * Echp _ max (2.4) Since thermal power plants typically exhibit specific power variation limits (indicated here as ramp), the power output increase or decrease between two successive time periods are subject to the following constraint: −ramp ≤ Echp (t ) 4,5,6,7 − Echp (t − 1) 4,5,6,7 ≤ ramp (2.5) The electric heat pump is present in the DMG types 2, 3, 6 and 7, in the latter two cases being cascaded to the CHP unit. At each time step, Eq. (2.6) describes the relationship between heat output Hhp and electricity input Ehp through the relevant Coefficient of Performance (COP) value, while Eq. (2.7) indicates the relevant heat production constraints between the upper limit Hhp_max and the lower limit considered here equal to zero: 15 H hp ( t ) 2,3,6,7 = Ehp ( t ) 0 ≤ H hp ( t ) 2,3,6,7 2,3,6,7 * COP ( t ) 2,3,6,7 ≤ H hp _ max (2.6) (2.7) The electricity Ehp used for running the EHP is generally composed of two components, namely, an electricity flow coming from the electrical grid (Ehp_g) and, only in those cases when the EHP is coupled to the CHP unit (that is, DMG type 6 and 7), an electricity flow coming from the CHP (Ehp_chp). This electricity balance at the EHP input can therefore be written as: = Ehp ( t ) Ehp _ chp ( t ) 2,3,6,7 6,7 + Ehp _ g ( t ) 2,3,6,7 (2.8) Superscripts in (2.8) denote how the grid is a source of electricity for the EHP in all four types 2, 3, 6 and 7 and also how in types 6 and 7 the CHP represents a further EHP electricity source. Hence, in DMG types 6 and 7 the amount of EHP electricity input coming respectively from the grid and the CHP unit is a result of the optimisation problem. This is highlighted by introducing what can be called shifting factor α(t)  which describes the per unit fraction of electricity produced by the CHP unit going to supply the EHP. Graphically this input-output electricity relationship between CHP and EHP is shown in Figure 1 e) and mathematically it is formulated as: Ehp _ chp ( t ) 6,7 = Echp ( t ) 6,7 * α ( t ) 6,7 (2.9) The general overall electricity balance is shown in Eq. (2.10), which can be viewed as the Kirchhoff nodal law: the sum of all electricity produced locally, consumed locally, and exchanged with the grid needs to be zero: ED ( t ) 2 ,3 ,4 ,5 ,6 ,7 ( = 1 − α (t ) 6 ,7 )* E chp (t ) 4 ,5 ,6 ,7 + Eimp ( t ) 2 ,3 ,4 ,5 ,6 ,7 − Eexp ( t ) 4 ,5 ,6 ,7 − Ehp _ g ( t ) 2 ,3,6 ,7 ( 2.10 ) In particular, from (2.10) it is clear how in the DMG cases 6 and 7, when the EHP is cascaded to CHP, the fraction of electricity produced by the CHP that does not supply the EHP, namely, (1- 16 α(t)) Echp, is either consumed locally as ED or is sold to the market as Eexp. The potential electricity amounts Eimp and Ehp_g bought from the market make up the final balance. The electricity balance for cases 2-5 can be explained similarly. It is interesting to point out how, similarly to the other relationships discussed in this problem formulation but even more evidently, Eq. (2.10) actually turns into a different equation for each different DMG type, as each of the seven types has different “consumers” (EHP and local demand) and “producers” (CHP and the grid) of electricity. With Figure 2 in mind, this is once again shown by superscripts 2-7: only when a superscript is associated with an existing component for the specific DMG type under consideration can the relevant decision variable take values different from 0. With respect to provision of sufficient thermal energy to the customer, in each DMG type an auxiliary boiler exists as backup and to cover peak heat demand, also providing additional operational flexibility in the different cases. The auxiliary boiler’s operation is described by Eqs. (2.11) and (2.12), showing the relationship between the boiler heat output Haux and the relevant fuel thermal energy input Faux through the boiler efficiency ηaux, as well as the operational constraints between 0 (assumed here to be the lower limit) and the boiler capacity Haux_max, respectively: H aux ( t ) 2,3,4,5,6,7 = η aux ( t ) 0 ≤ H aux ( t ) 2,3,4,5,6,7 2,3,4,5,6,7 * Faux ( t ) ≤ H aux _ max 2,3,4,5,6,7 (2.11) (2.12) Eq. (2.13) expresses the nodal heat balance in a similar way to the electrical balance in (2.10), also capturing the inter-temporal operational characteristics of thermal storage. The total thermal energy Hs available in the storage at each time step is in fact equal to the stored thermal energy in the previous step plus the net heat input in the observed time step. This net input to the storage system is represented by the sum of the heat production from CHP (Hchp), auxiliary boiler (Haux), and heat pump (Hhp), minus the heat demand HD. For the sake of simplicity, storage losses are neglected here (they would be very small considering the size of the system), although again they could be easily incorporated in the model. 17 H s (t ) 3,4,7 = H s ( t − 1) 3,4,7 + H chp ( t ) 4,5,6,7 + H aux ( t ) 2,3,4,5,6,7 + H hp ( t ) 2,3,6,7 − H D (t ) 2,3,4,5,6,7 (2.13) The thermal storage capacity is defined with its hot water temperature Ts as a control variable, with operational constraints in the storage tank between Ts_min=50°C and Ts_max=90°C. This is described by (2.14): Ts _ min ≤ Ts ( t ) 3,4,7 ≤ Ts _ max (2.14) The output water temperature of the electric heat pump could in principle be lower than the one from the CHP and additional heating could be needed to reach the output temperature of the CHP; however, here it is assumed that CO2 based EHP are used, whose output temperatures are consistent with the CHP ones. 1 Once again, it is worth highlighting how the problem equations were all synthetically written according to the superscript-based notation that was mentioned above, whereby specific equations for each specific DMG type are selected from the general constraint “set” by considering the relevant superscript. By doing so, all proposed DMG options (that encompass all the possible CHP/EHP/TES schemes) have been presented under a unified and comprehensive formulation. C. Environmental models C.1. Primary energy saving Combined heat and power generation can bring substantial primary energy and environmental savings compared to separate production , . More generally, the multi-generation energy efficiency in terms of primary energy saving can be evaluated through static indicators comparing the energy produced by DMG units to that produced by SP , . If expressed with reference to the fuel thermal input for SP, the energy efficiency indicator for CHP systems is the wellknown Primary Energy Saving or Fuel Energy Savings Ratio . For a generic multi-generation system this factor is defined as Poly-Generation Primary Energy Savings (PPES) : 1 Research on CO2 heat pump heat systems suggest that the outlet temperature could have above 85°C making additional heating unnecessary . 18 PPES = F SP − F DMG = 1− F SP ∑ F DMG X DMG ( X , x )∈D (2.15) η x SP D is a set of different demand vectors (electricity and heat, in this case), FSP is the fuel consumed in the separate production needed to comply with the same energy demand as in the multigeneration system. FDMG is the primary energy input to a specific multi-generation option (in these studies all types except type one that is the reference case), including fuel for CHP and boilers; XDMG represents the output value of each energy vector (electricity or heat). The coefficients ηxSP represent efficiency of separate production for each energy vector. These values are taken as reference to evaluate the primary energy necessary to produce the same amount of energy as in a DMG plant through conventional SP means, as exemplified in Section III.F. C.2. CO2 emission reduction Similarly to primary energy saving, multi-energy systems have the potential to bring CO2 emission reduction with respect to the SP means. However, this crucially depends on the overall system carbon emissions. This issue is even more emphasised in highly fossil fuel based system such as the current UK one. In the environmental assessment of different DMG options conducted here, the electricity produced in a DMG unit (locally consumed or exported) is treated as displacing electricity production from centralized power generation. The input values needed to evaluate the CO2 emissions from each of the DMG option are the DMG fuel (gas) emission intensity, the emission factor of the heat SP, and the Average Emission Factor (AEF) of the electricity grid for each period of unit operation. In particular, a PCO2ER indicator can be defined consistently with the PPES indicator as : PCO 2 ER = F SP F DMG F DMG − (mCO (mCO ( µCO * F DMG 2) 2) 2) = − 1 F SP (mCO ∑ ( X , x )∈D ( µCOX 2 ) SP * X DMG 2) (2.16) x x Where mCO 2 is the mass of CO2 emitted to produce the useful energy output X and µCO 2 is the emission factor associated to the production of X, expressed in (g/kWh) . A detailed CO2 emission saving analysis, together with the explanations and values used for the different emission factors, are elaborated in Section III G. 19 C.3. Local emission reduction While energy efficient technologies may have a lower global environmental impact in terms of primary energy and CO2 emissions with respect to SP, local air quality could be worsened due to the emissions of polluting by-products from burning fossil fuels in distributed cogeneration. Typical primary pollutants that are considered in the studies are nitrogen oxides (NOx), carbon monoxide (CO), and volatile organic compounds (VOCs – unburned, non-methane hydrocarbons). Other pollutants, such as oxides of sulphur (SOx) and particulate matter (PM) are mostly dependent on the fuel used and negligible if considering natural gas . This issue will be additionally emphasised in urban areas since these are typically characterized by high concentrations of such pollutants due to traffic pollution. The local air quality regulation could thus often be quite stringent, leading to limited acceptance of DMG systems within densely populated areas. A systematic analysis of these issues for CHP systems have been performed in ,  and it is generalised here to the different DMG options. The local emission values (focusing on NOx and CO for the sake of simplicity) are calculated using (2.17): DMG H , SP E ,CHP F , SP F ,CHP mNOx ,CO = mNOx ,CO + mNOx ,CO = µ NOx ,CO * FAB *η AB + µ NOx ,CO * Fchp *η e (2.17) This model is relevant to the local emission balance approach discussed in , where the emission impact from central generation electricity (both consumed and displaced) is not accounted for since it is considered “far enough” from where the receptors in urban areas are. 20 ECONOMIC ANALYSES OF DMG DH OPTIONS A. Case study description and equipment sizing Case study applications have been performed to illustrate and test the model developed and to compare the different options. For the sake of example, unit sizes are optimized to supply about 1000 consumers of different consumption profiles , although the model is general so as to cover any application. Equipment sizing is a result of sensitivity analyses performed for each type and will be discussed below. However, the results for the base case are already presented in Table 1 for easier understanding of the following discussions. For the EHP, a CO2-based ground-source or water-source heat pump is taken as a reference for centralised applications , while for the CHP system a conventional gas-fired internal combustion engine is used. Although even for a same technology different size CHPs could have different performance, same efficiencies have been assumed here for the different systems in order to focus on the comparison in terms of sizing and flexibility for the various options. For all DMG types, the presence of a 6 MW backup boiler is assumed but it is not considered in the comparison. For the investment and operation analyses CHP sizes of up to about 5 MWt were considered. The same scale was used for EHP. Table 1 Optimal sizes and relevant efficiencies of units for different DMG DG schemes CHP (kWe) TYPE 1 TYPE 2 TYPE 3 TYPE 4 TYPE 5 TYPE 6 TYPE 7 - - - 4000 3000 2500 2000 Electrical efficiency 0.35 0.35 0.35 0.35 Thermal efficiency 0.45 0.45 0.45 0.45 Boiler (kWt) 6000 6000 6000 6000 6000 6000 6000 Boiler efficiency 0.85 0.85 0.85 0.85 0.85 0.85 0.85 TES (m3) - - 200 - 200 - 200 EHP (kWt) - 5000 3000 - - 2000 2000 COP - 3.0 3.0 - - 3.0 3.0 B. Daily operational analysis Operational simulations for each DMG option have been conducted for typical winter, spring, summer, and autumn days to describe representative performance throughout the year. Operation is optimized based on available day-ahead market hourly electricity prices and for given fuel prices (natural gas is assumed here to be input fuel for CHP units). The electricity prices are 21 taken from  and electricity and heat profiles from . Gas prices are an average of recent gas prices for power producers in UK taken from . In this paper, for the sake of simplicity perfect forecast of loads and knowledge of energy prices are assumed. B.1. Winter In Figure 3 electricity and heat profiles for a winter day are shown together with the 7000 0,12 6000 0,10 0,08 4000 0,06 3000 0,04 2000 1000 0,02 0 0,00 0:00 1:00 2:00 3:00 4:00 5:00 6:00 7:00 8:00 9:00 10:00 11:00 12:00 13:00 14:00 15:00 16:00 17:00 18:00 19:00 20:00 21:00 22:00 23:00 Energy Demand (kW) 5000 Electricity prices (€/kWh) corresponding electricity prices. ED HD Buy EE price Figure 3 Demand profiles and electricity prices for a specific winter day Figure 4. shows the operation of the CHP-AB (DMG type 4) option. The auxiliary boiler is sized so as to cover 20% of annual heat consumption as suggested in , . It should be noticed that these numbers come from practical experiences from installing DH systems. When compared to ,  it can be noticed that some previous research did not rely on these experiences which sometimes resulted in oversizing units. These CHP schemes have very limited flexibility as already reported in ; they behave as large boilers following heat demand and selling excess electricity (as a “by-product”) to the grid. 22 4500 4000 Electricity (kW) 3500 3000 2500 2000 1500 1000 500 0:00 1:00 2:00 3:00 4:00 5:00 6:00 7:00 8:00 9:00 10:00 11:00 12:00 13:00 14:00 15:00 16:00 17:00 18:00 19:00 20:00 21:00 22:00 23:00 0 Time(h) Eimp (kW) Eexp (kW) Echp (kW) ED (kW) 7000 6000 Heat (kW) 5000 4000 3000 2000 1000 -1000 0:00 1:00 2:00 3:00 4:00 5:00 6:00 7:00 8:00 9:00 10:00 11:00 12:00 13:00 14:00 15:00 16:00 17:00 18:00 19:00 20:00 21:00 22:00 23:00 0 Time (h) Haux (kW) Hchp (kW) HD (kW) Figure 4 Daily operation of DMG type 4 for a typical winter day – electricity and heat Coupling thermal storage to CHP and AB units creates flexibility (DMG type 5). In this case, the CHP unit is not solely driven by the consumers’ heat demand, as it is able to store excess heat during high electricity prices and thus sell electricity at favourable market prices. On the other 23 hand, during periods of low electricity prices the CHP can be offline and the heat demand can be covered by the AB and TES. Coupling cogeneration and thermal storage has therefore the potential to provide demand response since flexibility arises from shifting between different energy vectors responding to real-time prices without reducing consumers’ comfort . Figure 5 presents the daily operation of this scheme for a typical winter day. The mentioned flexibility can be seen in the early morning hours (3:00-5:00) where the spark spread between electricity and gas (whose working definition will be here the difference between the electricity price and the gas price adjusted by the electrical efficiency) is unfavourable for CHP to be operational. 2500 1500 1000 500 0 -500 0:00 1:00 2:00 3:00 4:00 5:00 6:00 7:00 8:00 9:00 10:00 11:00 12:00 13:00 14:00 15:00 16:00 17:00 18:00 19:00 20:00 21:00 22:00 23:00 Electricity (kW) 2000 Time (h) Eimp (kW) Eexp (kW) Echp (kW) ED (kW) 24 6000 5000 4000 Heat (kW) 3000 2000 1000 -1000 0:00 1:00 2:00 3:00 4:00 5:00 6:00 7:00 8:00 9:00 10:00 11:00 12:00 13:00 14:00 15:00 16:00 17:00 18:00 19:00 20:00 21:00 22:00 23:00 0 -2000 -3000 Time (h) STOR (charge/discharge) Hchp (kW) Haux (kW) HD Figure 5 Daily operation of DMG type 5 for a typical winter day – electricity and heat In this period, the entire heat demand is covered by discharging the thermal storage, while electricity is bought from the market. On the other hand, in the periods 12:00-13:00 when electricity prices are high, the CHP operates at its maximum storing excess heat in the TES. Cascading CHP and EHP creates virtual competition between these two units based on the hourly spark spread. The heat pump can be supplied either from the CHP or from the grid, while CHP production is not strictly dictated by heat demand, thus leading to more profit-oriented operation. This competition can be clearly seen during the early morning periods, between 1:00-5:00, in Figure 6 In these periods the heat pump uses electricity produced by CHP instead of grid electricity minimizing the overall operational cost. An interesting sag in the exported (sold) electricity can be noticed at the period 8:00-9:00 when, despite high electricity price on the market, the heat peak demand drives the utilization of the heat pump. In general, in fact, high market prices of import electricity mean it is more feasible for the EHP to use electricity produced by CHP to cover the consumers’ heat demand. However, although the flexibility in this DMG configuration is increased relative to previous cases, during peak heat demand the DMG system still tends to be driven by demand rather than by market price signals. This suggests that electricity-heat coupling is only partially buffered in this scheme (at least at peak consumption times). 25 3500 Electricity (kW) 3000 2500 2000 1500 1000 500 0:00 1:00 2:00 3:00 4:00 5:00 6:00 7:00 8:00 9:00 10:00 11:00 12:00 13:00 14:00 15:00 16:00 17:00 18:00 19:00 20:00 21:00 22:00 23:00 0 Time (h) Eimp (kW) Eexp (kW) Echp (kW) ED (kW) 7000 6000 Heat (kW) 5000 4000 3000 2000 1000 -1000 0:00 1:00 2:00 3:00 4:00 5:00 6:00 7:00 8:00 9:00 10:00 11:00 12:00 13:00 14:00 15:00 16:00 17:00 18:00 19:00 20:00 21:00 22:00 23:00 0 Time (h) Hhp (kW) Haux (kW) Hchp (kW) HD (kW) Figure 6 Daily operation of DMG type 6 for a typical winter day – electricity and heat Following up on the conclusions of the previous paragraph, it can be appreciated that addition of thermal storage to the CHP-EHP cascade creates a more flexible DMG unit primarily driven by market signals (DMG type 7). Now both units optimize their operation based on the electricity prices but also based on the state of charge of TES. This can be seen during the periods 7:00 – 26 10:00 in Figure 7. High electricity prices push the CHP to operate at its maximum. However, the heat produced by CHP is not sufficient to cover the entire heat demand. Comparing the same periods for operations of DMG type 6 and 7 it can be noticed that in the mentioned period the EHP is used to cover the remaining heat demand. Since the price of electricity is high during this period, in DMG type 7 the TES is instead discharged and thus lower overall operational costs are achieved. Comparing the periods between 11:30 and 12.30 for DMG type 6 and DMG type 7, the benefits from adding TES become apparent. Addition of thermal storage enables the CHP system to produce maximum output exploiting the benefits of high market prices, since the TES enables it to store excess produce heat. In contrast, in DMG 6 (without TES) CHP and EHP are following the heat demand having the EHP being utilized almost at its maximum. The flexibility benefits obtained in these periods reflect in operational savings of the last DMG option. 2500 1500 1000 500 0 0:00 1:00 2:00 3:00 4:00 5:00 6:00 7:00 8:00 9:00 10:00 11:00 12:00 13:00 14:00 15:00 16:00 17:00 18:00 19:00 20:00 21:00 22:00 23:00 Heat (kW) 2000 -500 Time (h9 Eimp (kW) Eexp (kW) Echp (kW) ED (kW) 27 6000 5000 4000 2000 1000 0 -1000 0:00 1:00 2:00 3:00 4:00 5:00 6:00 7:00 8:00 9:00 10:00 11:00 12:00 13:00 14:00 15:00 16:00 17:00 18:00 19:00 20:00 21:00 22:00 23:00 Heat (kW) 3000 -2000 -3000 -4000 Stor. (charge/disch) Time (h) Hchp (kW) Haux (kW) Hhp (kW) HD Figure 7 Daily operation of DMG type 7 for a typical winter day – electricity and heat B.2. Spring/Autumn Spring and autumn periods are characterized by lower ratio of heat and electricity demand. This is shown in Figure 8. Some behaviour patterns in terms of consumption can be still readily recognized (morning and evening peak demands, in particular). DMG types 4 and 5 show a very similar behaviour as for the winter day. DMG type 4 still operates with negligible flexibility, similar as a boiler covering heat demand. Adding TES improves the flexibility as the operation of the DMG type 5 is not constrained only by heat demand. Thermal storage enables storing excess heat in times of high electricity prices and also lowering CHP production during periods of low electricity prices. As the contribution of this work is primarily in showing flexibility benefits from coupling units, the focus will be on DMG 28 types 6 and 7. Hence, the behaviour of DMG type 6 for the specific spring/autumn day is shown 3500 3000 Heat (kW) 2500 2000 1500 1000 500 -500 0:00 1:00 2:00 3:00 4:00 5:00 6:00 7:00 8:00 9:00 10:00 11:00 12:00 13:00 14:00 15:00 16:00 17:00 18:00 19:00 20:00 21:00 22:00 23:00 0 Time (h) Hchp (kW) in Haux (kW) Hhp (kW) HD (kW) 0,14 3000 0,12 2500 0,10 2000 0,08 1500 0,06 1000 0,04 500 0,02 0 0,00 ED HD Buy EE price Figure 8 Demand profiles and electricity prices for a specific spring/autumn day Electricity price (€/kWh) 3500 0:00 1:00 2:00 3:00 4:00 5:00 6:00 7:00 8:00 9:00 10:00 11:00 12:00 13:00 14:00 15:00 16:00 17:00 18:00 19:00 20:00 21:00 22:00 23:00 Energy demand (kW) Figure 9. 29 3000 Electricity (kW) 2500 2000 1500 1000 500 -500 0:00 1:00 2:00 3:00 4:00 5:00 6:00 7:00 8:00 9:00 10:00 11:00 12:00 13:00 14:00 15:00 16:00 17:00 18:00 19:00 20:00 21:00 22:00 23:00 0 Time (h) Echp (kW) Eexp (kW) Eimp (kW) ED (kW) 3500 3000 Heat (kW) 2500 2000 1500 1000 500 -500 0:00 1:00 2:00 3:00 4:00 5:00 6:00 7:00 8:00 9:00 10:00 11:00 12:00 13:00 14:00 15:00 16:00 17:00 18:00 19:00 20:00 21:00 22:00 23:00 0 Time (h) Hchp (kW) Haux (kW) Hhp (kW) HD (kW) Figure 9 Daily operation of DMG type 6 for a typical sprig/autumn day – electricity and heat For the considered day the heat demand is, for the most part, covered by the CHP unit with the exception of morning hours. Again the virtual competition between CHP and EHP, observed in the simulations for the winter period, can be observed during periods of large difference between sell and buy electricity prices (periods between 12:00-13:00 and 21:00-22:00). During morning 30 peak demand, namely, 6:00-7:00, the cooperation of these two units is manifested through using the electricity produced in the CHP for running the EHP. Operational behaviour for DMG type 7 is shown in Figure 10. At the beginning of the simulation period, 0:00-1:00, the difference between sell and buy price is negligible and it is feasible to cover the heat demand from the EHP. Same behaviour can also be observed during hours 4:005:00. Between those two periods the electricity price difference is high while the heat demand is quite low; this favours storage discharging as it is not feasible to start the operation of the CHP and producing heat from the EHP is too expensive. During the observed period (1:00-4:00), CHP would be operating only in heat following mode selling produced electricity into the grid at, very likely, unfavourable prices. In periods of peak demand (8:00-10:00), the heat demand is covered by the CHP. In case there is excess demand of heat, this is covered by discharging the thermal storage (period 8:00-9:00). Hence, the advantage of adopting DMG type 7 can be seen with respect to not only the spark spread arbitrage of gas and electricity prices as with type 6, but also through the capability to respond to the difference between sell and buy electricity prices by exploiting storage charge/discharge as this difference increases. 2500 1500 1000 500 0 0:00 1:00 2:00 3:00 4:00 5:00 6:00 7:00 8:00 9:00 10:00 11:00 12:00 13:00 14:00 15:00 16:00 17:00 18:00 19:00 20:00 21:00 22:00 23:00 Electricity (kW) 2000 -500 Time (h) Echp (kW) Eexp (kW) Eimp (kW) ED (kW) 31 3500 3000 2500 Heat (kW) 2000 1500 1000 500 -500 0:00 1:00 2:00 3:00 4:00 5:00 6:00 7:00 8:00 9:00 10:00 11:00 12:00 13:00 14:00 15:00 16:00 17:00 18:00 19:00 20:00 21:00 22:00 23:00 0 -1000 -1500 -2000 Time (h) Hs (kW) Hchp (kW) Haux (kW) Hhp (kW) HD (kW) Figure 10 Daily operation of DMG type 7 for a typical sprig/autumn day – electricity and heat B.3. Summer During summer the ratio between peak electricity and heat consumption is reduced to around 1:1.4. Figure 11 shows electricity prices and electricity and heat demand for the considered 1400 0,16 1200 0,14 0,10 800 0,08 600 0,06 400 0,04 200 0,02 0 0,00 ED HD Buy EE Price Electricity prices (€/kWh) 0,12 1000 0:00 1:00 2:00 3:00 4:00 5:00 6:00 7:00 8:00 9:00 10:00 11:00 12:00 13:00 14:00 15:00 16:00 17:00 18:00 19:00 20:00 21:00 22:00 23:00 Energy demand (kW) summer day. 32 Figure 11 Demand profiles and electricity prices for a specific summer day The results for DMG type 4 and type 5 are again not shown and can, for the most part, be understood from simulations shown for a typical winter day. More specifically, for the summer day operation of DMG type 4 the entire heat demand is covered by the AB since the trade-off between producing in CHP and selling excess electricity to the grid is less favourable than running the boiler and purchasing electricity from the market. Figure 12 shows the operation of the CHP coupled with EHP (DMG unit 6). 1200 800 600 400 200 0 -200 0:00 1:00 2:00 3:00 4:00 5:00 6:00 7:00 8:00 9:00 10:00 11:00 12:00 13:00 14:00 15:00 16:00 17:00 18:00 19:00 20:00 21:00 22:00 23:00 Electricity (kW) 1000 Time (h) Echp (kW) Eexp (kW) Eimp (kW) ED (kW) 33 1400 1200 Heat (kW) 1000 800 600 400 200 -200 0:00 1:00 2:00 3:00 4:00 5:00 6:00 7:00 8:00 9:00 10:00 11:00 12:00 13:00 14:00 15:00 16:00 17:00 18:00 19:00 20:00 21:00 22:00 23:00 0 Time (h) Hchp (kW) Haux (kW) Hhp (kW) HD (kW) Figure 12 Daily operation of DMG type 6 for a typical summer day – electricity and heat Unlike in the spring and winter cases, during summer most of the heat demand is supplied from EHP which is driven by electricity from the grid. This can be explained with the minimal stable generation (MSG) constraint of the CHP. For the larger period of the day, starting the CHP would mean excess heat production which cannot be stored. Adding TES, in DMG type 7, thus enables more flexible CHP operation, especially during peak electricity prices. This is shown in Figure 13 (periods 9:00-11:00 and 18:00-19:00). 34 2500 Electricity (kW) 2000 1500 1000 500 0:00 1:00 2:00 3:00 4:00 5:00 6:00 7:00 8:00 9:00 10:00 11:00 12:00 13:00 14:00 15:00 16:00 17:00 18:00 19:00 20:00 21:00 22:00 23:00 0 -500 Time (h) Echp (kW) Eexp (kW) Eimp (kW) ED (kW) 2500 2000 Heat (kW) 1500 1000 500 -500 0:00 1:00 2:00 3:00 4:00 5:00 6:00 7:00 8:00 9:00 10:00 11:00 12:00 13:00 14:00 15:00 16:00 17:00 18:00 19:00 20:00 21:00 22:00 23:00 0 -1000 -1500 Hs (kW) Time (h) Hchp (kW) Haux (kW) Hhp (kW) HD (kW) Figure 13 Daily operation of DMG type 7 for a typical summer day – electricity and heat C. Annual operational synthesis Analyzing daily operation profiles provides insight into understanding market behaviour of each DMG type and, for the presented studies, interactions between different units and the arising flexibility. Market conditions and load demand correlations change throughout the year so the 35 real value of flexible systems needs to be obtained by performing annual DMG type operation analysis. This optimal operation simulates the behaviour of each DMG type for different demand profiles, different market prices, and therefore different operational aspects of each unit type. Hence, the same simulations as for daily operation are conducted taking the day-ahead UK electricity market prices for the whole 2011. The flexibility of different DMG types, demonstrated in the previous section, is supported by annual operational cost savings achieved by unit coupling. Table 2 provides an incremental market analysis of the benefits of the different DMG-based district heating options. Table 2 Annual operational costs of different DMG types UNIT TYPE OPERATIONAL COST (€/a) Δ TO REFERENCE CASE (%) TYPE 1 625,440 - TYPE 2 479,599 -23.3 TYPE 3 445,660 -28.7 TYPE 4 462,691 -26.0 TYPE 5 422,436 -32.5 TYPE 6 342,684 -45.2 TYPE 7 312,198 -50.1 As said earlier, boilers have no flexibility and there is no room for operational optimization. The heat is produced when needed and electricity purchased to cover electricity demand. The annual operational cost of this unit is taken as a reference value when determining flexibility and operational savings that can be achieved from alternative options. As also mentioned above, large and decentralized electric heat pumps are becoming a more interesting option as they have a significant potential to manage variability in renewable energy sources, especially wind, production . Coupling EHP with thermal storage unit creates flexibility in terms of delaying or pushing operation of EHP not strictly related to heat consumption. Comparing these two options (types 2 and 3) to the reference case annual operation savings of 23.3% and 28.7% can be achieved. While CHP systems may be very efficient, the flexibility of schemes based on gas turbines or combustion engines are limited, given the sole role of covering either heat or electricity demand. Adding storage to such units provides them with flexibility to respond to favourable electricity market prices. The results presented confirm this option has significant advantage compared to the base boiler case, as it achieves 32.5% annual operation cost reduction. The possibility of 36 optimizing both sale and purchase of electricity also bring benefits compared to the EHP only options. Techno-economic evaluation of a CHP-EHP cascade has gained little attention in the past, despite of the potential energy advantages this approach could bring. In fact, the annual operation analysis of such a concept supports the conclusions based on daily simulations as cost savings compared to the reference case are 45.2% (no storage) and 50% (with storage). If DMG options 6 and 7 are compared to CHP-AB or CHP-AB-TES units, the savings are somewhat lower although substantial, namely, 25.9% and 32.5% respectively compared to CHP-AB and 18.9% and 26.1% respectively when compared to CHP-AB-TES. The additional benefits from CHP-EHP coupling are thus very significant in general. In addition, each unit option has been assessed according to a day-ahead market analysis only. However, high flexibility, as the one shown for DMGs type 6 and 7, suggests these plants could increase their revenue even further by entering multiple markets, e.g. intraday balancing markets and ancillary services (reserve) markets, which is object of ongoing research. 37 D. Sensitivity analysis on base case design parameters As already mentioned in Section II, sizing of the units is a result of sensitivity analyses conducted for different unit sizes and DMG market driven operation though the whole year. As DMG types 1-4 are more or less heat demand led, unit sizing in those types is essentially dictated by peak heat demand and there is little flexibility for optimal sizing. DMG unit types where EHP and/or TES are coupled to CHP have instead been analyzed in detail. The investment cost for units are taken from , . Investment lifetime of 15 years and discount rate of 5% were initially considered. The costs and factors taken for the investment analyses are shown in Table 3. Table 3 Input data for the investment analyses CHP (€/kWe) 600 EHP (€/kWt) 240 3 840 TES (€/m ) Discount rate (%) 5 Investment period (years) 15 The results of investment analyses are presented in Figures 14-16. 430000 Operational cost (€/a) 425000 420000 415000 410000 405000 150 200 250 TES size (m3) 300 350 400 38 160000 140000 120000 80000 60000 40000 20000 0 150 200 250 300 350 400 TES SIZE (m3) Figure 14 Results for sensitivity analyses for DMG type 5 380000 Operational cost (€/a) NPV (€) 100000 370000 360000 350000 340000 330000 320000 310000 300000 290000 2500 3000 3500 1000 1500 4000 2000 EHP size (kWt) 2500 CHP size (kWe) 39 NPV (€) 1000000 900000 800000 700000 600000 500000 400000 300000 200000 100000 0 -100000 2500 3000 3500 1000 1500 CHP size(kWe) 4000 2000 2500 EHP size (kWt) Figure 15 Results for sensitivity analyses for DMG type 6 Operational cost (€/a) 360000 350000 340000 330000 320000 310000 300000 300 250 290000 280000 200 270000 1000 1500 EHP size (kWt) 150 2000 2500 TES size (m3) 40 1600000 1400000 NPV (€) 1200000 1000000 800000 600000 400000 300 200000 250 200 0 1000 1500 150 2000 TES size (m3) 2500 EHP size (kWt) Figure 16 Results for sensitivity analyses for DMG type 7 E. Discussion of the results, planning analysis and robustness test Investment analyses support the results shown for daily and annual unit operation. For DMG type 5, the flexibility of the unit is dictated by the size of TES coupled to CHP. On the other hand, larger TES means higher investment cost, which is not paid back by benefits compared to the base case of boiler-produced heat. Therefore optimal size of the TES is a trade-off between benefits and investment cost. For DMG types 6 and 7, the electrical size ratio of CHP and EHP, in terms of heat size of the EHP given the efficiency assumptions, has higher impact on operational cost than the size of TES. The net present value (NPV) analyses confirm the operational cost result; the thermal ratio of CHP to EHP size close to 1 is the optimal unit selection. The NPV studies are based on cash flow analyses assuming steady state prices over the plant lifetime. This assumption is neglecting investment factors such as price changes and regulatory factors, but the results are nevertheless an extremely valuable indicator of benefits that can be gained through different investment decisions. In addition, in order to further strengthen the investment analysis results, a robustness test was performed. There are multiple techniques to 41 cope with long term uncertainties that effect investment decisions, such as multi stage uncertainty analysis , , which are outside the scope of this paper, the discount rate value was initially modified in order to show how investments depend on initial assumptions . In Figure 17 sensitivity analysis with respect to different discount rate, namely, 3%, 5%, 7% and 10%, is thus shown. 2500000 2000000 NPV (€) 1500000 1000000 500000 0 3% 5% 7% 10% -500000 Discount rate -1000000 TYPE 5 TYPE 6 TYPE 7 Figure 17 NPV dependency on discount rate for different DMG types It can be easily noticed that DMG types 6 and 7 have a positive NPV value even with higher discount rate values (when benefits gained from operational savings are somehow weighted less relative to higher initial costs), confirming that the intrinsic flexibility to respond to price signals also brings longer term benefits in terms of investment planning even for demanding investment return requirements. As a further proof of planning option robustness, sensitivity analyses with variation of gas and electricity prices have been conducted. Input for these analyses were the optimal unit sizes calculated in the previous section and this was taken as the base scenario (Scenario 1). Gas and electricity prices were then varied ±50% over 8 scenarios. The scenarios presented in Figure 18 are as follows: 1) Scenario 1: Gas and electricity prices are the same as today and these results have already been presented in Table II; 41 42 2) Scenario 2: Gas prices are increased by 50% compared to Scenario 1; electricity prices are the same as in Scenario 1; 3) Scenario 3: Electricity prices are increased by 50% compared to Scenario 1; gas prices are the same as in Scenario 1; 4) Scenario 4: Both electricity and gas prices are increased by 50% compared to Scenario 1; 5) Scenario 5: Gas prices are decreased by 50% compared to Scenario 1; electricity prices are the same as in Scenario 1; 6) Scenario 6: Electricity prices are decreased by 50% compared to Scenario 1; gas prices are the same as in Scenario 1; 7) Scenario 7: Both electricity and gas prices are decreased by 50% compared to Scenario 1; 8) Scenario 8: Electricity prices are increased by 50% compared to Scenario 1; gas prices are decreased by 50% compared to Scenario 1; 9) Scenario 9: Gas prices are increased by 50% compared to Scenario 1; electricity prices are decreased by 50% compared to Scenario 1; 160% 140% 120% 100% 80% 60% 40% 20% DMG 5 savings DMG 6 savings Scenario 9 Scenario 8 Scenario 7 Scenario 6 Scenario 5 Scenario 4 Scenario 3 -40% Scenario 2 -20% Scenario 1 0% DMG 7 savings Figure 18 Sensitivity analyses for DMG types 5, 6 and 7 The results presented in Figure 18 show the dependency of the compared results on the unit sizing that was performed for base case (in Section III D). This particularly refers to the size of the CHP as this is relevant to the electricity that can be produced by the CHP and sold back to the market. DMG type 5 CHP coupled with TES shows stronger dependence on gas and electricity 42 43 price ratio than other two types. Larger optimal size of the CHP unit results in the operation that is highly oriented towards selling excess electricity in order to reduce operational cost. For this reason, scenarios where price difference of electricity to gas increases in favour of electricity (Scenario 5 and Scenario 8), results in higher operational savings for DMG type 5. For different gas and electricity prices market driven analyses of DMG types 6 and 7 the results shown in Figure 18 support the conclusions from the previous Section. In fact, they even suggest that current gas and electricity price spark spread is one of the least favourable in supporting the economic benefits from these flexible units. In scenario 8, where gas prices are increased by 50% and electricity prices are reduced by 50%, district systems based on boiler are even economically favourable to this DMG option. This sensitivity to prices of DMG type 5 as well as different CHP size compared to DMG type 7 is also shown when comparing these two types. 43 44 ENVIRONMENTAL ANALYSES OF DMG DH OPTIONS A. Primary energy saving assessment For each of the DMG options that have been analysed, the PPES indicator has been used to assess the relevant primary energy saving with respect to type one (heat produced in a district heating boiler and electricity produced in centralized generation) which is considered the SP reference (and is assigned a PPES value 0.0). Primary energy saving is by definition independent of the fuel (see for instance references , , where a comprehensive analysis of the differences between primary energy and emissions and of their relation with fuels is given). However, the reference efficiencies could be selected according to different arguments, for instance by considering only those power plants with the same type of fuel as the considered DMG system as opposed to the whole power system. Both types of studies were therefore run. More specifically, in order to compare the different DMG options considered here with the overall power system, the average power system efficiency of the UK in 2012 was considered, estimated to be around 0.38 , also taking into account transmission and distribution losses in the order of 7%. Reference boiler efficiency equal to 0.85 was also assumed. In addition, the PPES indicator was also calculated with respect to state of the art gas combined Cycle Gas Turbines (CCGT) with 55% efficiency and gas boilers with 95% efficiencies. The relevant results are shown in Table 4. The results clearly show that the highest primary energy savings are achieved in DMG type 7, where a PPES in the order of 40% can be achieved with respect to the average power systems production. In addition, while the PPES is lower when considering only gas CCGT units in the comparison, still DMG options provide substantial energy saving of up to 31% for DMG type 7. It is also very interesting to highlight how, from the comparison between CHP-EHP mixed schemes (type 6 and 7) and CHP only (types 4 and 5), the higher flexibility DH schemes 6 and 7 bring substantial benefits with respect to “conventional” simultaneous production of energy vectors in CHP. Furthermore, moving from type 5 to type 7, the additional energy savings are much more substantial when CCGT plants are used as the reference case (with benefits that pass from 6.5% to 31%) than when the average power system is considered. This is because the combination of CHP and EHP allows an optimal use of local resources and at higher efficiency than with CHP or EHP only. This also implies that 44 45 less electricity is exchanged externally, which is particularly beneficial when the reference system becomes more efficient as in the case of CCGT plants. Table 4 Multi-generation primary energy savings for different DMG options PPES (UK avg. 2012) PPES (CCGT) DMG TYPE 1 0.000 0.000 DMG TYPE 2 0.181 0.309 DMG TYPE 3 0.183 0.318 DMG TYPE 4 0.268 0.065 DMG TYPE 5 0.286 0.079 DMG TYPE 6 0.386 0.284 DMG TYPE 7 0.403 0.310 B. CO2 emission reduction Regarding the CO2 emission reduction assessment of the different DMG options, a gas emission factor value of 0.19 kg CO2/kWh was used for the CHP units and the boiler, as shown in . Emission rate for electricity values are reconstructed as in  using the electricity generation mix for the entire 2011 and 2012  and the standard emission rates for each fuel type . A transmission and distribution loss factor of 1.1 (that is, 10% losses) was taken into account too. The resulting grid half-hourly AEF for the years 2011 and 2012 are shown in Figure 19. 45 46 800 700 CO2 emission (kg/MWh) 600 500 400 300 200 100 0 1 1441 2881 4321 5761 7201 8641 10081 11521 12961 14401 15841 17281 Settlement period 2011 2012 CASE A (2011 reduced 20%) CASE B (2011 reduced 30%) Figure 19 Half hourly Average Emission Factor for UK in 2011 and 2012 For a comprehensive environmental analysis of the different options, several case studies were defined: 1) Case 2011: AEF as in 2011 for each half hour period as shown in Figure 18, gas emission factor of 0.19 kg CO2/kWh; 2) Case 2012: AEF as in 2012 for each half hour period as shown in Figure 18, gas emission factor of 0.19 kg CO2/kWh; 3) Case A: AEF reduced by 20% compared to the one in 2011, gas emission factor of 0.19 kg CO2/kWh; 4) Case B: AEF reduced by 30% compared to the one in 2011, gas emission factor of 0.19 kg CO2/kWh; 5) Case A1: AEF reduced by 20% compared to the one in 2011, gas emission factor of 0.17 kg CO2/kWh; 6) Case B1: AEF reduced by 30% compared to the one in 2011, gas emission factor of 0.17 kg CO2/kWh. 46 47 Case A and Case B, corresponding to reduced grid intensity scenarios, represent potential emission reduction that can be achieved at the system level by for instance integrating Carbon Capture Storage to coal/gas fired power plants and by increasing penetration of wind. An approximation has been made assuming that system dynamics and flexibility as well as emission profile would not change dramatically. More correct values could be gained by simulating future power generation mix and its operation according to forecasted fuel and electricity prices, but this is out of the scope of this paper. The approximations made should be viewed in the light of bringing a high level view on the DMG environmental impact in future less carbon intensive power systems and as such the studies are valuable in terms of strategic understanding. Case A1 and Case B1 are based on the ongoing research, conducted mostly by the gas companies, on mixing biogas or bio methane (or other types of low-carbon gas such as hydrogen produced through renewables) with natural gas , . In this respect National Grid published a research report on energy and economic potential of renewable gas , while the Department of Energy and Climate Change issued a guide for producers to connect to the existing gas grid . Bio-methane producers in UK are even, under Renewable Heat Incentive, eligible for an incentive for each kWh of bio methane injected into the gas grid . The presented cases assume for illustrative and exemplificative purposes that injecting low-carbon gas into the gas grid will reduce the overall gas emission factor by 10%. The results of the six scenario studies are presented in Figure 20. 5000000 CO2 emissions (kg/a) 4500000 4000000 3500000 3000000 2500000 2000000 1500000 1000000 500000 0 DMG TYPE 1 DMG TYPE 2 DMG TYPE 3 DMG TYPE 4 DMG TYPE 5 DMG TYPE 6 DMG TYPE 7 2011 2012 CASE A CASE B CASE A1 CASE B1 Figure 20 DMG options carbon footprint 47 48 The results presented in Figure 20 confirm the previous findings: CO2 emissions of specific DMG unit are highly dependent on the system level emissions. As the UK electricity production is based on fossil fuels, and thus has high average CO2 system emission rate, DMG types 2 and 3 based on EHP result in highest annual emissions. Still, these two options are environmentally more favourable than boiler based DH options. Emissions are further reduced for DMG types based on CHP; in some cases over 50% reduction can be achieved. Scenario emissions for 2011 and 2012 suggest that DMG types 4 and 5 are environmentally friendlier than more flexible DMG units type 6 and 7. As the latter two (type 6 and 7) are smaller in size, by 33%, they produce less electricity and therefore displace less electricity that would need to be produced in highly polluting central power plants, in line with the above discussions on the primary energy saving. This can be easily seen by comparing scenarios for 2011 and 2012; DMG types 4 and 5 are the only ones with lower CO2 emissions in the more carbon intensive 2012. Analyses for cases with lower system CO2 emissions (Cases A, B, A1, B1) suggest that even just 10% decrease in gas carbon intensity could retain substantial environmental benefits for gas based DMG technologies. These results are relevant to ongoing discussion on the role that gas could play in the next years, as mentioned above. All these options could be readily evaluated under the presented unified modelling framework. In addition, although not captured in the studies performed here, flexible DMG options can also bring benefits in terms of capability to balance intermittent renewable resources in close to real time and then integrate additional renewable at a system level. These further benefits are being analysed systematically by the authors in ongoing research. C. Local emission reduction For the local emission assessment, NOx and CO emissions have been considered here as they are the biggest concern from a regulatory point of view. The results for the different DMG options are reported in Table 5. For this purpose, the following emission factors have been used: µ𝑊 𝑁𝑂𝑥 = 𝐻,𝑆𝑃 𝐻,𝑆𝑃 700 mg/kWhe and µ𝑊 𝐶𝑂 = 400 mg/kWhe for CHP units  and µ𝑁𝑂𝑥 = 200 mg/kWht and µ𝐶𝑂 = 40 mg/kWht. for boilers . 48 49 Table 5 Local emissions assessments for different DMG options DMG type 1 DMG type 2 DMG type 3 DMG type 4 DMG type 5 DMG type 6 DMG type 7 NOx (t/a) 3.151 0.196 0.117 6.932 7.555 3.34 3.150 CO (t/a) 0.630 0.039 0.023 3.607 4.097 1.86 1.791 District heating units based on EHP emit the smallest amount of local emissions as they only use fossil fuels to run auxiliary boiler for backup when the price spark spread between bought electricity and gas is in favour of gas. These results were expected and the idea of this analysis was to evaluate the best option from the CHP based ones (DMG types 4, 5, 6 and 7) and to compare them with base case of boiler DH units. The results support the results from the studies performed above; besides being the best option economically, DMG type 7 has the lowest environmental impact. When comparing this option to the reference one, where electricity is produced in conventional power plants and local emissions are thus displaced, DMG type 7 and boiler based DH options have the same emissions in terms of NOx. As the impact of these pollutants is relatively limited to in the order of tens of kilometres, these analyses are valuable when deciding on future investments, especially in high populated areas where recipients are close to the pollutant emitters. 49 50 MODELLING APPROXIMATIONS As mentioned earlier, efficiencies have been modelled as constant values; this is common approximation of the real values made to speed up the calculations. As the results might be influenced by these approximations, this section extends the mathematical formulation in order to capture the non linear behaviour of the efficiencies with respect to the operations points of the output vectors, heat and electricity. Equations (5.1) and (5.2) have been changed to: = Echp ( t ) Fchp (t ) 4,5,6,7 *ηe1 (t ) 4,5,6,7 + I chp (t ) 4,5,6,7 *ηe 2 (t ) 4,5,6,7 (5.1) = H chp ( t ) Fchp (t ) 4,5,6,7 *ηt1 (t ) 4,5,6,7 + I chp (t ) 4,5,6,7 *ηt 2 (t ) 4,5,6,7 (5.2) 4,5,6,7 4,5,6,7 Efficiencies ηe and ηt are modelled as piece-wise linear functions which enabled maintaining the linearity of the entire optimization problem. Although CHP units of different sizes could have different nominal performance, same full-load efficiencies have been assumed here for different sizes in order to focus on the comparison in terms of sizing and flexibility for the various DMG options. On the other hand, in order to preserve the same CHP efficiency curve shape with respect to part-load operation between full capacity and MSG, the coefficients ηe2 and ηth2 are different for different CHP sizes, as can be appreciated from Table 7. A. Economic analyses The changes in modelling have resulted in changes of operational costs as well as investment analyses. These changes can be summarized as in Table 6. Results in Table 6 suggest that changing the formulation resulted in reducing of operational cost, especially the one of DMG type 5, CHP and TES. The model of CHP production, defined by (2.2) and (2.3), sets that the CHP efficiencies decrease when the unit operates in the region bellow maximum rated power. On the other hand, the objective function "pushes" the CHP to operate as close as possible to the most efficient point in order to lower the operational cost. Therefore, for DMG type 4 the operational cost will increase slightly as there is no TES and/or EHP to provide flexibility to CHP operation. Lack of flexibility means the CHP will operate in less efficient operating point, consuming more gas than in the previous studies. 50 51 Table 6 Annual operational costs of different dmg types UNIT TYPE OPERATIONAL COST (€/a) Δ TO REFERENCE CASE (%) TYPE 1 625,440 - TYPE 2 479,599 -23.3 TYPE 3 445,660 -28.7 TYPE 4 465,130 -25.6 TYPE 5 396,155 -36.6 TYPE 6 339,052 -45.8 TYPE 7 304,217 -51.4 UNIT TYPE Δ Linear efficiency modelling (€/a) TYPE 1 0 Δ Linear efficiency modelling (%) 0 TYPE 2 0 0 TYPE 3 0 0 TYPE 4 -2,439 -0.54 TYPE 5 53,281 12.61 TYPE 6 3,632 1.06 TYPE 7 7,981 2.56 Results in Table 6 suggest that changing the formulation resulted in reducing of operational cost, especially the one of DMG type 5, CHP and TES. For types where additional units are coupled with CHP, these units provide flexibility and enable CHP not to operate in low efficiency areas thus reducing operational cost. This can particularly be seen for DMG type 5, where adding TES reduces operational cost by 11% compared to CHP unit only. It should be noted that the optimal size of the DMG type 5 changed with the change of the formulation, optimizing TES size to 250 m3 instead of previous 200 m3. This can be seen in Table 7 where new optimal sizes are shown. If the same size of storage was kept as in the previous simulations, the operational savings would be only 5%. 51 52 Table 7 Optimal sizes and relevant efficiencies of units for different DMG DH schemes TYPE 1 TYPE 2 TYPE 3 TYPE 4 TYPE 5 TYPE 6 TYPE 7 - - - 4000 3000 2500 2000 Electrical efficiency (full capacity) 0.37 0.37 0.37 0.37 Coefficient ηe1 0.4073 0.4073 0.4073 0.4073 Coefficient ηe2 -315.412 -236.559 -197.133 -157.706 Thermal efficiency (full capacity) 0.47 0.47 0.47 0.47 Coefficient ηth1 0.515 0.515 0.515 0.515 Coefficient ηth2 -399.891 -310.067 -249.594 -197.417 CHP (kWe) Boiler (kWt) 6000 6000 6000 6000 6000 6000 6000 Boiler efficiency 0.85 0.85 0.85 0.85 0.85 0.85 0.85 TES (m3) - - 200 - 250 - 200 EHP (kWt) - 5000 3000 - - 2000 2000 COP - 3.0 3.0 - - 3.0 3.0 Optimal size of each DMG is a result of investment analyses and is shown in Figure 21, Figure 22 and Figure 23. 410000 Operational cost (€/a) 405000 400000 395000 390000 385000 380000 375000 150 200 250 300 350 400 TES size (m3) 52 53 380000 370000 NPV (€) 360000 350000 340000 330000 320000 310000 150 200 250 300 350 400 TES SIZE (m3) Figure 21 Results for sensitivity analyses for DMG type 5 Operational cost (€/a) 380000 370000 360000 350000 340000 330000 320000 2500 3000 310000 3500 300000 1000 1500 4000 CHP size (kWe) 2000 2500 EHP size (kWt) 53 54 1000000,0 NPV (€) 800000,0 600000,0 400000,0 2500 3000 200000,0 3500 ,0 1000 -200000,0 1500 4000 2000 CHP siza (kWe) 2500 EHP size (kWt) Figure 22 Results for sensitivity analyses for DMG type 6 Operational cost (€/a) 350000 340000 330000 320000 310000 300000 290000 300 250 280000 270000 200 260000 1000 1500 150 2000 TES size (m3) 2500 EHP size (kWt) 54 55 1550000 1500000 NPV (€) 1450000 1400000 1350000 1300000 1250000 300 250 1200000 200 1150000 1000 1500 150 2000 TES size (m3) 2500 EHP size (kWt) Figure 23 Results for sensitivity analyses for DMG type 7 For better understanding, Figure 24, Figure 25 and Figure 26 represent the NPV difference resulting from different modelling of the electrical and thermal CHP efficiencies. The graphical values on y axis are expressed as the difference between NPV value calculated with (non)linear efficiencies and approximations using constant efficiencies (percentage). NPV modelling difference 90,0% 80,0% 70,0% 60,0% 50,0% 40,0% 30,0% 20,0% 10,0% 0,0% 150 200 250 300 350 400 TES size (m3) Figure 24 NPV difference in sensitivity analyses for DMG type 5 55 56 NPV modelling difference 80,0% 60,0% 40,0% 4000 3500 3000 2500 CHP size (KWt) 20,0% 0,0% -20,0% 1000 1500 -40,0% 2000 2500 -60,0% -80,0% EHP size (kWt) Figure 25 NPV difference in sensitivity analyses for DMG type 6 NPV modelling difference 10,0% 9,0% 8,0% 7,0% 6,0% 5,0% 4,0% 3,0% 2,0% 1,0% 0,0% 1000 1500 150 200 2000 EHP size (kWt) 2500 250 300 TES size (m3) Figure 26 NPV difference in sensitivity analyses for DMG type 7 From the results of NPV sensitivity analyses it can be noticed that linear representation of efficiency varying with the load results in additional benefits, and therefore NPV in overall, for all DMG types. While this change is relatively small for DMG type 6 (around 2%) and around 7% for DMG 57 type 7, the benefits are significantly higher for DMG type 5. This is a result of better utilization of TES in that particular type. Since the previous approximation of efficiency did not penalize CHP operation part load, TES was used for storing excess heat only in periods of high electricity prices. In addition, when efficiency modelling penalizes CHP operation at part load in terms of lower efficiency and thus higher operating cost, TES is utilized to enable the CHP to operate longer hours at maximum power. On the other hand, in periods of low electricity prices, CHP can be switched off and heat demand supplied from TES only. This results in lower operational cost, as shown in Figure 24, and higher NPV values for the DMG type 5. However this has little effect on the NPV sensitivity analyses varying the discount rate. DMG type 6 and 7 remain more favourable choice of investment changing the discount rate from 3, 5, 7 and 10%. 2500000 2000000 NPV value (€) 1500000 1000000 500000 0 3,00% 5,00% 7,00% 10,00% -500000 TYPE 5 TYPE 6 TYPE 7 Figure 27 NPV dependency on discount rate for different DMG types Figure 27 compares operational cost difference with regards to efficiency modelling. It can be seen that for most of the scenarios operational cost differences are below 5%. The exceptions are scenarios 6 and 9, scenarios where electricity is reduced by 50% compared to the present state. 58 160% 140% 120% Savings (%) 100% 80% 60% 40% 20% DMG type 5 savings DMG type 6 savings Scenario 9 Scenario 8 Scenario 7 Scenario 6 Scenario 5 Scenario 4 -40% Scenario 3 -20% Scenario 2 Scenario 1 0% DMG type 7 savings Figure 28 Sensitivity analyses for DMG types 5, 6 and 7 35,00% 30,00% Difference (%) 25,00% 20,00% 15,00% 10,00% 5,00% DMG 5 difference DMG 6 difference Scenario 9 Scenario 8 Scenario 7 Scenario 6 Scenario 5 Scenario 4 Scenario 3 Scenario 2 -5,00% Scenario 1 0,00% DMG 7 difference Figure 29 Modelling difference sensitivity analyses for DMG types 5, 6 and 7 B. Environmental analyses With the change of the operational point of the CHP unit, the CO2 emissions from DMG types 4, 5, 6 and 7 will inevitable change as well. From Figure 30 it can be seen that DMG option 4, CHP unit only, exhibits higher overall CO2 emissions than in the case where constant efficiency approximation was used for modelling. This can be explained by a lack of flexibility in DMG 59 type 4 operation; CHP unit operates in points with lower efficiency thus using more gas to produce the same heat and electricity output. This reflects in higher emissions as they are proportional to the fuel used for CHP operation. 5000000 4500000 CO2 emissions (kg/a) 4000000 3500000 3000000 2500000 2000000 1500000 1000000 500000 0 DMG TYPE 1 DMG TYPE 2 DMG TYPE 3 DMG TYPE 4 DMG TYPE 5 DMG TYPE 6 DMG TYPE 7 2011 2012 CASE A CASE B CASE A1 CASE B1 Figure 30 DMG options carbon footprint 30,00% 20,00% Difference (%) 10,00% 0,00% DMG TYPE 4 DMG TYPE 5 DMG TYPE 6 DMG TYPE 7 -10,00% -20,00% -30,00% -40,00% 2011 2012 CASE A CASE B CASE A1 CASE B1 Figure 31 DMG options carbon footprint modelling differences In DMG types 5, 6 and 7, where other units provide flexibility in the operation, the emissions are additionally reduced. This in particular can be noticed for DMG type 5. As explained in the previous Section, CHP unit is operated only is maximum efficiency points or offline, reducing 60 the operational cost, fuel consumption as well as overall emissions. Adding a TES to the unit has significant benefits to both minimizing cost and emissions. With regards to Primary Energy Savings Table 8 shows that changes are insignificant, being slightly higher for DMG types 6 and 7 (around 2%). Table 8 Modelling differences in primary energy savings for different DMG options PPES (UK avg. 2012) PPES (CCGT) DMG TYPE 1 0.000 0.000 DMG TYPE 2 0.181 0.309 DMG TYPE 3 0.183 0.318 DMG TYPE 4 0.268 0.065 DMG TYPE 5 0.286 0.079 DMG TYPE 6 0.394 0.289 DMG TYPE 7 0.417 0.317 The final comparison is made for CO and NOx emissions and shown in Table 9. Table 9 Local emissions assessments for different DMG options DMG type 1 DMG type 2 DMG type 3 DMG type 4 DMG type 5 DMG type 6 DMG type 7 NOx (t/a) 3.151 0.196 0.117 6.933 7.555 3.394 3.218 CO (t/a) 0.630 0.039 0.023 3.607 4.097 1.887 1.891 The values are slightly higher than in the reference case, where efficiencies are modelled as constant values, especially for DMG type 6 and DMG type 7. However, the differences are below 2%. The research and the results shown and elaborated in this and previous Chapter have been published in . 61 FLEXIBILITY - A KEY ELEMENT IN OPERATION AND PLANNING OF LOW CARBON ENERGY SYSTEMS Basic operational principle of each energy sector is stable and secure supply of specific energy vector (electricity, heat, gas etc) procured through various market services delivered at different time horizons. In order to provide these services, energy systems need to be flexible in order to maintain supply-demand equivalency, responding to uncertainties and variability in both production and consumption. The increasing share of renewable energy sources (RES) in the generation mix redefines requirements on the flexibility of the energy systems. The number of methods and metrics proposed in the existing literature do not uniquely capture the sources that can provide flexibility or to what extent do these changes reflect on the operation and planning of each energy system. The following Chapter presents a comprehensive overview of the operation and planning flexibility issues, discusses different methodologies proposed for flexibility quantification. In addition it examines how the increasing need for flexibility in the electricity sector reflects on interconnected energy sectors, heat and gas, recognizing the value of multi energy flexibility. A. Defining flexibility Goals of reducing global and local greenhouse gas emissions reflect through planning and operational changes in all energy sectors, in particular electricity, heat and gas. These changes are mostly due to integration of renewable energy technologies, characterized by their stochastic nature of production. Although the uncertainty and variability has always been present in these systems, the integration of RES has increased them, setting new technical and economical requirements. The share of RES in most countries of the world is still relatively small and the systems have sufficient flexibility to cope with them; however several systems have already experienced problems with large share of RES in overall electricity production . These problems resulted in increased awareness for necessity of advanced planning, tools and strategies to avoid potential problems. The flexibility in power systems, and similar is valid for all energy systems, is defined as the capability to maintain constant supply-demand balance due to uncertainty and variability of those two elements. In addition, flexibility is defined as the capability of a unit or a cluster of units to respond to system changes over a specific time horizon 62 as each unit is constrained by its technical capabilities. The definition of flexibility should also include where and how electricity is produced, how it is transported, how and when it is traded and when it is consumed . System flexibility is of high value to the system operators as they have a task of maintaining system stability; on the other hand it has little to no importance to power suppliers whose main interest is making profit. This creates a challenge when it comes to incentives for operational flexibility providers (e.g. for units to ramp up or down due to variability in RES production) and defining benefits of investing in new flexible technologies. There are significant efforts to research the capability of the existing power systems to deal with increasing share of wind and solar generation and to define and evaluate the flexibility to smoothen the uncertainty and variability these sources bring to the usual operation practices. Figure 32 visualizes how the need for flexibility increases with integration of RES in the system. The arrows in Figure 1 point to the most obvious timeframes when there is a potential lack of flexibility in the system: large changes in net load often referred to as ramping, and excess wind production requiring operational changes of slow, inflexible generation such as nuclear. During those periods it is often infeasible to shut down inflexible generation and the operators rather chose curtailing wind energy (in cases when exporting excess electricity to neighbouring balancing area is not possible). To address the challenge of significant wind integration new concepts for electricity generation dispatch through different unit commitment (UC) problems modelling are being developed, recognizing benefits of stochastic and rolling UC approaches, emphasising the value of load and RES forecasting . A group of authors from National Renewable Energy Laboratory presented a detailed analysis of connecting balancing areas (BA) in the US, researching ramping capabilities in time horizons specific for those BA . The authors elaborate on a unified standard set by North American Electric Reliability Corporation (NERC), defining Area Control Error (ACE) as frequency deviation from set value and introducing minute values and monthly average for statistical evaluation of ACE; called Control Performance Standard (CPS1 is defined on a minute resolution and CPS2 as monthly average). 63 2500 Electricity (kW) 2000 1500 1000 500 16:00 0:00 8:00 16:00 0:00 8:00 16:00 0:00 8:00 0:00 16:00 0 Time (h) Nuclear Coal Gas Hydro Load Increased flexibility needs 3000 Electricity (kW) 2500 2000 1500 1000 500 16:00 0:00 8:00 16:00 0:00 8:00 16:00 0:00 8:00 16:00 0:00 0 Time (h) Nuclear Coal Gas Hydro Wind NetLoad Figure 32 Flexibility requirements change with increasing share of RES In  the same authors discuss how the ramping requirements and wind integration cost are reduced if BAs cooperate in balancing electricity deviations. The report elaborates that, when comparing ramping requirements before and after wind integration, the benefits of coordinating several BAs are more emphasised after wind integration. With no wind, morning and evening requirements for ramping up and/or down coincide and these benefits are less pronounced. The analyses were conducted on a 5-minute scale and to demonstrate these benefits the report introduced several metrics for each system. a) dominant ramp; defined as the maximum up and down ramp requirement at a given hour, 64 b) secondary ramp; every ramp requirement of opposite direction to dominant ramp at a given hour, c) ramp penalty; the difference between the dominant ramps required by separate systems operation and combined operation. Ramping requirements are defined separately for each of the 4 BA-s separately and resulting in the definition of the metrics for BAs separate operation. Ramping penalty is used as a metric demonstrating how these requirements reduce when BAs operate in a coordinate fashion. It should be noticed these metrics are hourly average values and do not accurately present the need for flexibility, however they provide a good insight into benefits on interconnections and joined BA operation. The authors use a rather simple approach; they extract the ramping capability of each thermal unit based on the available past operation of the units. While the results suggest that presently ramp down capability is more significant than the ramp up as most units operate close to the maximal point, this will change with higher penetration of RES as the units will not operate so close to the maximum due to increased reserve requirements. In addition they conclude that balancing areas where sub-hourly markets exist pay little or nothing for ramping capability of the generators (the little or nothing refers to average cost of energy). If the generation units have sufficient physical capability to ramp up or down and there is an adequate sub-hourly energy market structure the generators are incentivized to respond to net load changes. System operators, particularly in the US, report on the annual insufficient capability to provide ancillary services as scarcity events  and put particular emphasis on insufficient ramping capabilities of the system to respond to an unpredicted event. A methodology for reducing these events and ensuring that additional ramping capability is available is elaborated in , proposing a more robust market dispatch model. The proposed concept results in slightly higher prices at the real-time market (in the presented case real-time market is settled 5 minutes before event); however is also eliminates scarcity events. Overall, the authors of the paper claim their approach will in long term result in lower cost as it will eliminate ramping price spikes. In the presence of high wind production, utilities face a problem of system minimum generation requirements, mostly expected during overnight hours. As mentioned previously and shown in Figure 32, in those the operators usually decide to curtail wind production. This has already been observed in Denmark as a consequence of its reliance on combined heat and power electricity plants for district heating and minimum generation constraints of those units . The issue of 65 minimum generation constraints will require different approaches to operation practices in the future high RES power systems, including market changes or modifying technical characteristics of the generator in order to cycle bellow current minimum stable generation points . A single change will probably not suffice as several markets have already observed cases where energy prices have dropped below the fuel cost of producing electricity, resulting in negative energy prices and high positive regulation prices . This has shown that power plants choose to lose money paying to sell energy rather than to further reduce their output and shut down as such actions would reflect in very high losses (in case where they would have to reduce their output bellow Minimum Stable Generation - MSG). This suggests that flexibility of the systems will also depend on the power plants ability to quickly shut down and start up again. B. Sources of flexibility Available literature categorizes sources of flexibility differently, but the most common is the one found in  which defines generation flexibility, imported flexibility and demand side flexibility. Similar to the mentioned report the following section elaborates on research areas for each of the defined flexibility sources and capacities. Figure 33 conceptually presents these flexibility sources. 66 LOW FLEXIBLE AND INFLEXIBLE GENERATION • • NUCLEAR COAL INFLEXIBLE CONSUMPTION FLEXIBLE GENERATION UNITS • • • • GAS HYDRO CCGT CHP MARKET SERVICES FLEXIBLE CONSUMPTION IMPORTED FLEXIBILITY • • • • • EV STORAGE DR AC LINES HVDC Figure 33 Flexible and inflexible sources B.1. Storage In the context of storage, latest research focuses on "storing" electricity in battery storages. For this reason the paper makes a distinction between battery storages and thermal or hydro pumped storage and elaborates only on battery storage in this section and refers them as storage. Different technologies are suggested to have the potential for providing uncertainty and variability balancing in high RES power systems. However, services these units can provide are limited due to the technical constraints: energy (time for service provision) and power . In  the role and potential services energy storage could provide are elaborated emphasizing the economy behind those services. In the context of the report, energy storage is observed as an alternative to wind curtailment since energy storage has the capability to reduce the overall system minimum generation (MSG) constraints. In  a metric to evaluate the perspective of the energy storage is introduced, called Flexibility Factor (FF), defined as a ratio of annual peak and the systems minimum generation point. For most systems system level MSG is usually around 30-40% which corresponds to FF of 60-70%. As the share of RES increases minimum generation point will have to be lower in order not to curtail wind; these benefits create, among 67 others, a business case for energy storage. In addition, with respect to percentage of RES integration, the authors distinguish two types of flexibility: a) ramping flexibility: needed at lower levels of RES (following net load variations); b) energy flexibility: needed for higher RES share, and expressing it as the ability to increase the coincidence of RES generation and electricity demand. A more detailed elaboration of this can be found in . In case of Europe, several studies give very similar answers to the role of energy storage in the high RES power system, however this is highly dependent on the systems energy mix of a specific country , , . A general conclusion shown also in  is that energy storage can alleviate the problems of the uncertainty and variability of renewable energy sources. With the present cost of energy storage, these units will have to provide several services to increase the overall benefits justifying their investment . For some of those services, such as frequency control, temporal arbitrage, provision of reserve, the location of the storage does not significantly affect the value that it provides. On the other hand, transmission or distribution congestion services highly depend on the position as well as sizing of the units and respectively feasibility of a specific storage unit. Since they are distributed, these storage devices can perform a spatiotemporal arbitrage preventing network congestion and curtailment of RES which results in reducing the cost of producing energy from conventional generating units. In  the authors extensively elaborate on storage capability to provide a specific service. They define 9 characteristics constraining the storage capability to provide a specific service, additionally dividing them into 6 physical characteristics and 3 scenario dependant characteristics. The paper argues storage can provide a number of services to different power system stakeholders, dividing those services according to the speed and frequency those services are required as well as by the system subject potentially requiring a specific service. It is interesting to notice that while a number of papers elaborate on storage capability to provide one or more services to a single stakeholder , , , , there is a limited number of those recognizing that additional value of storage lies in providing multiple services to multiple market/system subjects. An unique approach is presented in  where storage units offer services to multiple system players over different scheduling periods. Storage is modelled as a provider of flexibility through various market services procured in consecutive tenders, setting storage energy equilibrium constraints over a period of time for each service offered. This ensures the process can be repeated for each service during the following settlement period. The longest duration settlement period is cleared first and 68 the decisions are passed on to the next settlement period as constraints. It should be mentioned the entire analysis is based for a very large storage (size being 25% of the peak power of the analyzed system) B.2. Flexible generation Conventional generation units designed to have more flexible characteristics like higher ramp rate (MW/min), larger operating range (Pmax/Pmin), smaller start-up/shut-down times and minimum up and down times are usually considered as the low cost sources of providing flexibility. A very useful overview of the technical characteristics of existing conventional generation units in context of their ability to provide flexibility is given in . In  flexibility of single units, and correspondingly the entire system, is defined by 4 parameters: i) Magnitude - defined as the size and the direction of change, taking into account MSG; ii) Ramp response - defined as the rate of change; iii) Frequency - defined as the number of events; iv) Available Flexible Resources - defined as the ability to change between resources. In the operating timeframe, two defined metrics for flexible resources are operating reserve (usually divided into two or more categories based on speed of response) and system regulation (automatic generation control). With respect to that, the report creates mapping of various events, going from large magnitude events with a high ramp requirement to high frequency and ramp response but with low magnitude . The proposal in  suggests that a concept based on multiple smaller units with coordinated operation, at a single location, have the capacity to provide fast response, capacity and energy to the operator. Several examples already exist worldwide. The idea is similar to a known concept as Virtual Power Plant . B.3. Demand response (DR) Renewable energy integration and increasing variability and uncertainty in the power system imply that fewer subjects in the system will stay passive; in particular this relates to the consumers. Traditionally, consumers do not change their behaviour or consumption with respect to system or market signals, although their active participation is an attractive topic for over two decades . Responsive consumers are recognized as a potentially valuable source in providing various system services, going from frequency response , reducing wind forecast 69 errors  or joint energy and reserve services . Such active participation responding to system signals creates another valuable source of flexibility in the future power system. In  the authors discuss potential barriers for active participation of aggregated flexible demand in Nordic markets. The authors make a very relevant statement in terms of flexibility; spot market prices cannot be price signals regulating flexible consumption, as often suggested in the literature, due to the limitations in metering and communication infrastructure. However, aggregated consumers can offer balancing regulation based on intra-day prices. Consumers aggregated in such way are seen by Transmission System Operator (TSO) as a single market Balancing Responsible Party (BRP) and often referred in the literature as a Virtual Power Plant (VPP) . Aggregating consumers in a single stakeholder, VPP, creates a market entity capable of quickly reacting to system demands. However, such entity has high power capacity to provide services in the ancillary services market, such as primary and secondary reserve, but significantly lower energy capacity. Authors in  address this issues, focusing on the capability to provide primary and secondary reserve service. The flexibility area is defined as a difference between baseline consumption and the total flexible demand consumption taking into account forecasting error for the baseline prediction. The authors propose a simple formulation: ∂E (t ) = P cons (t ) − P base (t ) ∂t (6.1) Where energy derivation presents the energy available from flexible demand, Pbase is the baseline consumption presenting the inflexible consumption and each deviation expressed as Pcons is the provision of ancillary services from the VPP. The consumption profile is defined by its maximum and minimum from where the capacity for service provision can be extracted: P cap = min( P max − max( P base (t )), min( P base (t )) − P min ) t∈T t∈T (6.2) In  responsive consumption is divided into sheddable, controllable and acceptable load as means to quantify the capability of a specific consumer to participate in DR services and to define how much flexibility can a specific consumer provide. Using this methodology the authors 70 define the total flexibility metric for DR as a product of sheddable load and minimum between acceptable and controllable load, as these two are in fact coincident. These three metrics are expressed as percentages of load profile in each observed time step. The results show that DR has a significant capability (participates with over 90%) to provide reserve regulation for studied cases. In addition to the literature referenced above, in  it is recognized that in cases where there is a need for a larger response, in terms of power relative to energy of the load, it might impact the functionality these devices offer to the end users (for example the state-ofcharge of the EV battery). Discussing different strategies for control and different aspects of providing demand flexibility, the authors conclude hierarchical model of control is the most promising one. Again the conclusions are similar to the conclusions made on the aggregating and control of distributed resources in the context of VPP; the concept of such control is demonstrated in Figure 34. B.4. Electric vehicles (EV) Today’s transport system is responsible for 13.5% of greenhouse emissions worldwide, and personal road vehicles account for 44.5% of that share ; it is easy to conclude that only personal vehicles are responsible for at least 6% of greenhouse gas emissions worldwide. One of the solutions is substituting the internal combustion engine with an electrical one. This makes sense to a certain extent as the electricity sector is strategically oriented towards renewable energy sources, thus the negative ecological impact of electric vehicles (EV) that would use electricity produced by renewable sources, would be insignificant. Having a fleet of flexibly chargeable EV can be regarded as aggregated flexible demand and as such the benefits of EV flexibility are often discussed in the context with other demand responsive units such as electric heat pumps ; both considered to have a high potential to create new load peaks at the domestic level. 71 SYSTEM CONTROL VPP 1 DG aggregator Load aggregator n Load aggregator 1 VPP 2 DG aggregator Load aggregator 2 VPP n DG aggregator Load group Load group DG group DG group DG group Load group POWER SYSTEM Figure 34 Hierarchical control of DR and VPP A major difference from what is considered classical flexible demand, usually thermal load devices, is that EV have much higher flexibility in terms of temporal scheduling as their charging can be postponed for several hours without significant impact on the service to the user. In addition, under the concept of Vehicle-to-Grid (V2G) EV would be capable of injecting electricity back into the system and providing a number of ancillary services such as primary frequency response , spinning reserve , load and voltage management  and even be able to provide both energy and ancillary services maintaining preferable operation point (POP) within satisfactory boundaries . As flexible loads, EV are scheduled at the energy market to increase the net load (demand reduced by the produced RES electricity) of the system, often referred as valley-filling, with the goal of minimizing part load operation or expensive shut down/start up of the generators. Following on this, the authors in  research the impact EV will have on future energy generation mix. New unit commitment algorithm considers retirement of specific power plants in predetermined schedule and analyzes multiple scenarios to define the optimal investment into future generation mix. Although the conclusion made is that higher EV integration will stimulate investments into more flexible, but also for the system more expensive, power plants the authors also argue the conclusion cannot be generalized. Consumption seasonality and CO2 emission pricing will have a high impact on EV pricing and charging and thus future generation portfolio investments. 72 Dual energy and ancillary service approach is presented in  where EV are presented twofold: as V2G and as flexible demand only. In both cases they can provide ancillary services as gradual or as interruptible charge/discharge units. This research seems to be the only paper focusing on the possibility of EV to provide tertiary reserve, or flexibility in terms of energy, to the system. Single aggregator is considered as a coordinator of EV fleet, however the probable concept for control and flexibility provision of EV would resemble to the concept shown in Figure 34. C. Quantifying flexibility In addition to modelling system operation, several papers have recognized value in defining an "offline" metric in order to define the capability of the system to adapt to changes and evaluate the flexibility of the power system. Very roughly these can be categorized as operational and planning metrics , however the following Section will elaborate further on time frame categorizations, specifically in terms of operational flexibility. C.1. Operational flexibility In case of a disturbance in the system, resulting in deviation of the frequency from its nominal value, the generating units immediately respond in order to maintain the balance - this is called primary frequency response. Traditionally this is a feature of conventional generators. Although this response is automatically provided by the units, some recent research showed a decline in the frequency response capability of the units. There are several reasons for this, starting from poor incentives as the market for this service practically does not exist to reserving the capacity for other, more market subsidized services such as secondary or tertiary reserve. In addition, governor ramp constraints are often not included in the unit commitment dispatch neglecting units' capability to adequately respond to primary frequency. While in  the authors demonstrate s simple way to include this into generation dispatch, a comprehensive approach to system unit commitment modelling including primary, secondary and tertiary response service is in detailed elaborated in , . The authors recognize that such a systematic evaluation of the flexibility for larger systems is computationally too extensive and requires a large amount of often unknown data on all units in the system. 73 How specific market operates and in what time frame the generators are dispatched has a high impact on regulation and the flexibility of the system . In California several scheduling time frames (day ahead (DA), hour ahead, real-time market) with load and variable generation forecasting data, define the needed regulation as a difference between scheduled and actual generation/load over those time frames. The authors define the needed flexibility as a triad of i) power capacity (MW), ii) ramping capability (MW/min) and iii) energy (MWh) . Taking into account forecasting error, a method of "flying brick" is used to evaluate the available balancing reserve of the generators on a DA and hour-ahead basis, defining periods when additional generators need to be committed or decommitted. In  the same authors propose a methodology for recognizing harmers and helpers to system imbalances and a methodology to assign the cost of balancing to each unit. The methodology is based on metrics defined by NERC, namely Control performance standard (CPS) and balancing area control error (ACE) . The methodology only considers energy, not the technical capabilities of each unit, thus not providing a metric for evaluation of flexibility but rather a post event evaluation of units that contribute to balancing the system or cause deviation from scheduled operation. CPS performance is analyzed in , evaluating impact of large wind integration on the performance standards and proposing solutions in terms of increased forecast accuracy, combining control areas and increasing frequency response reserves. Furthermore, in  needed improvements are evaluated based on the estimated variability each new non-controllable unit, meaning wind in the mentioned work, contributed to the existing generation fleet. Effective Load Carrying Capability (ELCC) index is defined in  as a measure of individual new generators contribution to the overall system level of reliability, calculating the later one as the reliability for the system in the previous year. This metric serves as an indicator, value, of the load that can be served at the same level of reliability as before integrating variable RES into the system. In essence it tells if the net load can still be served after adding a new RES unit. This metric is recognized by the Working Group on Variable Generation Capacity Value as a very promising one . Loss of Load Expectation (LOLE) is a known methodology for system reliability evaluation which authors in  use to create a flexibility metric called Insufficient Ramping Resources Expectation (IREE). This metric is later expanded  and shown in (6.3) and (6.4): 74 = FLEX t ,i ,r Online Onlinet ,r * min( RRr * i, RatedCapacityr − Pr oductiont ,r ) FLEX t ,i ,r Offline = min( RRr *(i − StartTimer ), RatedCapacityr *(1 − Onlinet ,r )) (6.3) (6.4) From the flexibility metrics expressed as in (6.3) and (6.4) the IREE is calculated with the goal of evaluating flexibility of each unit based on its ramping capability (RRr) and minimum stable generation constraints, taking into account if the unit is online, over a period of time i. The IRRE value is the expected number of times a system will not be able to meet net load change during a defined time horizon. The metric also eliminates all the cases where the available flexibility is on the upper required limit by reducing it by 1MW. The conclusion made is that positive IRRE maximum values coincide with the start up times of flexible resources while negative are driven by net load change magnitude. Since the metric requires operational points of each unit, the same group of authors suggests a simplified approach, where these operation points are based on merit order . The concept is further simplified by introducing flexibility metric of online available units and flexibility metric detecting offline units which can be started in a needed time frame. These values can then be used to calculate the flexibility deficit. An interesting approach borrowed from the control theory is presented in . The flexibility index is expressed as ratio between cut and uncut polyhedron where the uncut polyhedron presents the entire operating region while the cut polyhedron presents the feasible area of operation defined by the technical constraints. The methodology is rather complex and not elaborated in enough details to determine the potential for practical application. C.2. Planning flexibility Although it is difficult to draw a strict line and decouple operational and planning flexibility (as they are tightly related), the following subsection elaborates on models and metrics examining the flexibility, and sources to provide this flexibility, in future scenarios usually targeting a specific energy mix goal. In  the authors propose an offline metric to evaluate the flexibility of each unit in order to optimally plan a future flexible system defining the entire system flexibility as a sum of each unit's flexibility share. This metric is shown by (6.5) and (6.6): 75 1 1 [ Pmax (i) − Pmin (i)] + [ Ramp(i) * ∆t ] 2 flex(i ) = 2 Pmax (i ) Pmax (i ) FLEX A = ∑ * flex(i ) i∈ A ∑ Pmax (i ) i∈A (6.5) (6.6) This metric enables evaluation of unit's flexibility without the need for knowing the operational point of it; it is based on the range between maximum power (Pmax) and MSG (Pmin) and ramp rate of the unit (Ramp(i)). To evaluate the investments into new flexible generation unit, a new Unit Construction and Commitment (UCC) algorithm is developed as an extension of the one presented in . Decisions on the new generation investment are based on profitability, and therefore flexibility, of unit's participation in the day ahead and real-time balancing market, enabling generators to sell both energy and reserve (receive an option fee for reserve but, if deployed, also exercise price based on real-time balancing market). The UCC performs a rolling scheduling to update the generation dispatch every 6 hours with new load and wind forecasts for three different sets of generation mix. The paper also introduces normalized profit metric in order to determine the profit each generation unit can gain by deploying flexibility services (in realtime balancing market). Similar model is presented in , however with a lot less details in terms of modelling constraints or quantifying flexibility through a specific metric. The paper evaluates feasibility of installing Compressed Air Energy Storage (CAES) systems in the area of Bretagne in France in order to balance wind fluctuations for two scenarios in year 2030. Although this research can be considered as case based due to specifics of the French power system (inflexible nuclear with high minimum stable generation and significant share of variable and uncertain wind generation) the paper is interesting from the perspective that placement of CAES is considered taking into account geographical features as well as economy and system needs. Concept proposed in  takes into account adaptive cost as well as the operational flexibility by an adjusted unit commitment model. The authors argue that the solution for future generation mix, subject to high levels of uncertainties, has to be able to adjust to all possible future scenarios and that the obtained solution has to have minimum cost if adjustments are 76 needed due to imperfect scenario knowledge. With this in mind, the multi-stage model proposed defines a flexible system taking into account global and local uncertainties. An relocation coefficient Rc is introduced in , further elaborated in , and defined as a statistical correlation between net electricity exchange between unit and the system and the net electricity demand of the system. The term is introduced to demonstrate how a combination of CHP and heat pump (EHP) (or any selected) can be more beneficial to the system with high share of wind compared to CHP only units. It is not entirely clear how the values for assessing Rc are obtained but they present an average annual value. The metric is shown in equation (6.7): Rc = ∑ (e − e )(d − d ) ∑ (e − e ) ∑ ( d − d m 2 m m 2 m) (6.7) In the equation above, e values present the exchange between a generation unit and the system, while d is the net load demand. The same factor is mentioned in , called marginal "goodness" of a plant and further defines that a total system has a value of 1.0 while a RES unit would have a negative value. The concept is called intermittency friendliness and compares different options with respect to mentioned factor. It should be noted that the metric is a statistical annual average and does not reflect flexibility of the system, as it does not capture intra-hour changes in the system. However, the authors suggest that it shows how flexible the unit is in responding to system requirements. If the unit has an Rc of 1.0 it can operate in a standalone regime. D. Multi-energy system flexibility aspect Despite the above mentioned work, there is still a lack of a comprehensive methodology to evaluate the flexibility of the future high RES power system and how increasing this flexibility will reflect on other, interconnected, energy systems such as gas or heat. Interactions between energy vectors occur on multiple levels and in the system. An example of such coupling are Combined Heat and Power (CHP) plants which can be regarded as energy hubs coupling three vectors; gas, heat and electricity . Gas fuelled power plants are commonly used to balance the variations in RES production meaning that increased share of RES in the system will reflect the gas system economics and imbalance costs , . However CHP units rarely decouple their operation from demand of one vector. For example, CHP will usually follow heat demand, 77 using gas when needed and producing electricity as a by-product. Adding thermal energy storage (TES), in cascade with CHP, means that heat production will not anymore be driven only by demand. In that case TES has a role of buffer and CHP can react according to market signals and act, at a household level, as an demand response unit . Adding TES to CHP creates a flexible unit, capable of reacting to power system demands and delivering the needed heat demand to the final consumer. In  the authors try to quantify the amount of flexibility that can be gained from coupling CHP and TES. The concept is based on the capability to push the CHP to operate at its maximum when there is a need for upward reserve in the system, and to keep the CHP offline when there is a need for downward reserve in the system. However the metric used to quantify this flexibility is expressed as time the unit can be pushed to operate in the extreme conditions, partially ignoring technical constraints of the CHP unit such as ramp rate, MSG of minimum up/down time. The planning concept of all energy vectors simultaneously has gained a lot of attention of the past year, see for example , , however the interactions in terms of operation and flexibility have not been addressed properly. The concept of Multi-Energy systems  suggests there is high value in creating an integrated energy system where interaction of different energy vectors can bring additional value in terms of economic and environmental benefits . General concept of Multi-energy systems interactions are presented in Figure 35. 78 ITL BSS EHP ∑ TS IEL ∑ SOLAR WIND FTL CHP AB FEL PHEV/EV BSS à EHP à CHP à FTL à ITT à AB à FEL à IEL à PHEV/EVà TS ∑ Battery Storage System Electric Heat Pump Cogeneration unit Flexible thermal load Inflexible thermal load Boiler Flexible electric load Inflexible electric load „Plug-in” hybrid electric vehicle/Electric vehicle Thermal storage à Heat Gas/Fossil fuel Electricity Energy flow Figure 35 Flexibility from energy vector interaction The sum boxes present the controllers which would, interacting with different units, be able to provide flexibility from multiple energy vectors. In  the authors present the concept of energy shifting, elaborating that each energy vector can be provided from multiple sources in flexible multi-generation unit, for example heat can be delivered from CHP, boiler or electric heat pump. By intelligently responding to system demand the unit can shift the operation of each component in the multi-generation unit and produce the desired energy vector. The concept is further developed and has shown to be effective as a flexible demand response on small scale level  and as a provider of ancillary services . A general concept where different energy vectors interact in order to provide flexibility is shown in Figure 36. 79 Current Energy Systems Hydro Power plant Demand Thermal Power plant Nuclear Power plant Electricity Combined Heat and Power Renawable Energy Sources Heat Boilers Fossil Fuels Transport system Future Flexible Energy Systems Flexible demand Hydro Power plant Thermal Power plant Nuclear Power plant Flexible T&D system Electricity Battery Storage Thermal Storage Combined Heat and Power Electric heating Renawable Energy Sources Heat Boilers Fossil Fuels Plug in Hybrid Electric Vehicles Transport system Figure 36 Current and future flexible energy systems 80 E. Operational flexibility metric of Distributed Multi-Generation The only known concepts capturing interactions between multiple energy vectors are described in in  and . Through a defined concept of shifting factors, these papers proposed that flexibility can be gained from shifting to another energy vector. To be more precise; the alternative for delivering the desired output to the end consumer can be achieved by choosing an alternative component, from DMG unit to produce this. The newly selected component uses different input energy vector but produces the same output vector. The concept will be elaborated further by Figure 37. Eimp Eexp (1-α)Echp EDS Fchp ED Ehp αEchp CHP ηe, ηt Electric Heat Pump COP Hchp TES Hs Haux Faux Hhp Auxiliary boiler ηaux a) C O N S U M E R S ED, HD 81 Eimp Eexp (1-α)Echp EDS Fchp ED Ehp αEchp CHP ηe, ηt Electric Heat Pump COP C O N S U M E R S ED, HD Hhp Hchp TES Hs Haux Faux Auxiliary boiler ηaux b) Eimp Eexp (1-α)Echp EDS Fchp ED Ehp αEchp CHP ηe, ηt Electric Heat Pump COP Hchp TES Hs Haux Faux Hhp Auxiliary boiler ηaux C O N S U M E R S ED, HD c) Figure 37 Flexibility provision a) optimal operation points, b) upward flexibility requirement, c) downward flexibility requirement In Figure 37 a) the optimal operation point flow diagram of DMG type 7 is shown. A similar can be presented for each type; however type 7 is chosen as it is the most comprehensive one. In previous chapters it was elaborated that the optimal operation points are calculated day ahead, defining the behaviour of the each unit over a 24 hour horizon resulting in the minimal operation cost. In cases when there is a need for additional flexibility, DMG units can provide this in a 82 unique way without affecting neither the contracted electricity exchange from the day ahead market or final consumer demand. The second issue is related to the idea of demand response; however it should be noticed that, unlike classical concept for DR provision, DMG units can respond to system requirements without affecting the quality or quantity of service for the customer, in any way. In Figure 37 b) the concept for upward reserve flexibility is demonstrated. Darker colours, in comparison to Figure a), are depicting additional production of the components final energy vector, while lighter colours show the opposite. The upward flexibility for DMG type 7 is provided by: • CHP unit production additional electricity. As a consequence, more electricity is exported to the system, but also more heat is produced which needs to be stored in TES. This means TES is, alongside CHP maximal capacity, additional limiting factor is such flexibility provision. In case TES is the limiting factor, the heat production of boiler (if possible) should be reduced. • EHP unit reduces its operation. The EHP acts as electrical demand and by reducing its production it directly impacts the amount of electricity exchanged with the system. The limiting factors in this case are the difference from the operational point of EHP and shutting down the unit, and the amount of heat not produced by EHP that can be replaced by producing it in the boiler discharging it from TES. The above described behaviour or regulating the operation of EHP can be described with the following equations (6.8) and (6.9): = H EHP DOWN (t ) min( H EHP (t ), H AUX _ MAX − H AUX (t ) + H s (t ) − H S _ MIN ) EEHP DOWN (t ) = H EHP DOWN (t ) COP(t ) (6.8) (6.9) The H EHP DOWN (t ) is the maximum amount of heat that will be shifted by reducing the operation of EHP. This heat needs to be replaced by producing it from another source. The available sources for production are TES and boiler. The basic idea would be to substitute the heat from 83 EHP by discharging TES. Only if this is not sufficient, boiler should be additionally started to cover the difference. In case when EHP is the limiting factor, minimum of the two values in equation (6.8), TES will discharge the amount of heat equal to HEHP, to substitute for EHP production. In case this is not sufficient, the boiler will substitute for the rest. The new set point of TES needs to be calculated as in (6.10): H = max( H S (t ) − H EHP (t ), H S _ MIN ) S _ NEW (t ) (6.10) Defining the storage set point is relevant as this is the limiting factor in pushing the upward operation of CHP unit. This is then described by (6.11) and (6.12): H CHPUP (t ) =min( H CHP _ MAX − H CHP (t ), H S _ MAX − H S _ NEW (t )) ECHPUP (t ) = H CHPUP (t ) * ηe (t ) ηt (t ) (6.11) (6.12) H CHPUP (t ) is the maximal additional heat that will be produced by pushing upward operation of the CHP unit, as heat is produced together with additional electricity needed by the system. Total available upward flexibility is defined by equation (6.13): UP = FLEX (t ) ECHPUP (t ) + EEHP DOWN (t ) (6.13) In Figure 37 c) the concept for downward reserve flexibility is demonstrated. Darker colours, in comparison to Figure a), are depicting additional production of the components final energy vector, while lighter colours show the opposite. The downward flexibility for DMG type 7 is provided by: • CHP unit reduces its electricity output. This results in less electricity exported to the system and less heat produced. Limiting factor is providing downward flexibility from CHP is the MSG of CHP unit. The amount of heat not produced needs to be recovered 84 from storage; in cases this is not possible, the operation of the boiler will be increased in order to substitute for the missing heat. • EHP unit increases its operation and thus increases electrical demand; this will impact the amount of electricity exchanged with the system, increasing the import from the system. The limiting factor in this case is the difference from the operational point of EHP and maximum installed thermal power of the EHP unit. The amount of additional heat from EHP needs to be stored in TES. If this capacity of TES is lower than the difference between EHP operating point and installed EHP capacity, production from boiler will be decreased. The above described behaviour or regulating the operation of EHP can be described with equations (6.14) and (6.15): UP H EHP= (t ) min( H EHP _ MAX − H EHP (t ), H AUX (t ) + H S _ MAX − H s (t )) EEHPUP (t ) = H EHPUP (t ) COP(t ) (6.14) (6.15) In case when EHP is the limiting factor, minimum of the two values in equation (6.14), TES will be additionally charged with the amount of heat equal to HEHP. In case the capacity of storage is not sufficient, the boiler will reduce its output for the required difference. The new set point of TES needs to be calculated as in (6.16): H= min( H S (t ) + H EHP (t ), H S _ MAX ) S _ NEW (t ) (6.16) Additional downward flexibility is achieved by reducing the output from CHP. Limiting factors in this case are CHP MSG level and the amount of heat in TES. Additionally heat can be replaced from boiler. This can be described by equations (6.17) and (6.18): DOWN H CHP = (t ) min( I CHP (t )*( H CHP (t ) − H CHP _ MIN ), H S _ NEW (t ) + H AUX _ MAX − H AUX (t )) (6.17) 85 ECHP DOWN (t ) = H CHP DOWN (t ) * ηe (t ) ηt (t ) (6.18) The H CHP DOWN (t ) is the maximum amount of heat that will be shifted by reducing the operation of CHP unit. Total downward flexibility available by DMG unit is described by (6.19): DOWN FLEX = (t ) ECHP DOWN (t ) + EEHPUP (t ) (6.19) The above elaborated concept of flexibility is presented in Figure 38-Figure 40 for DMG type 7 for specific days of the year, winter, spring/autumn and summer. The flexibility values for each day are calculated based on optimal values obtained in simulations in Chapter 4. Flexibility metrics can be, among others, used to evaluated potential additional services DMG units can provide. While majority of system services such as ancillary services highly depend on the time when their utilization is negotiated, an interesting aspect to observe is the capability of DMG units to independently operate from the grid. For this reason figures compare the calculated flexibility from shifting with imported electricity (if it is upward flexibility) and exported electricity (if it is downward flexibility). As it can be seen from Figure 38, during all periods of a winter day DMG unit has sufficient flexibility to substitute for the electricity exchanged with the grid. In theory this means that at any moment of the winter day, the DMG unit can work as an independent microgrid system, being completely separated from the system. Additional dynamic simulations could be conducted to find if the system can provide a valuable system service such as sheddable load in demand response programs, assisting the power system in critical moments. 86 DMG TYPE 7 - FLEXUP Electricity (kW) 3000 2500 2000 1500 1000 500 0:00 1:00 2:00 3:00 4:00 5:00 6:00 7:00 8:00 9:00 10:00 11:00 12:00 13:00 14:00 15:00 16:00 17:00 18:00 19:00 20:00 21:00 22:00 23:00 0 Time (h) FLEXUP (kW) Imported electricity DMG TYPE 7 - FLEXDOWN Electricity (kW) 2500 2000 1500 1000 500 23:00 22:00 21:00 20:00 19:00 18:00 17:00 16:00 15:00 14:00 13:00 12:00 11:00 10:00 9:00 8:00 7:00 6:00 5:00 4:00 3:00 2:00 1:00 0:00 0 Time (h) FLEXDOWN (kW) Exported electricity Figure 38 DMG type 7 additional operational flexibility for a winter day a) upward, b) downward Similar findings as for the winter day can be made for spring/autumn day as shown in Figure 39. 87 DMG TYPE 7 - FLEXUP Electricity (kW) 3000 2500 2000 1500 1000 500 0:00 1:00 2:00 3:00 4:00 5:00 6:00 7:00 8:00 9:00 10:00 11:00 12:00 13:00 14:00 15:00 16:00 17:00 18:00 19:00 20:00 21:00 22:00 23:00 0 Time (h) FLEXUP (kW) Imported Electricity (kW) DMG TYPE 7 - FLEXDOWN 2500 Electricity (kW) 2000 1500 1000 500 0:00 1:00 2:00 3:00 4:00 5:00 6:00 7:00 8:00 9:00 10:00 11:00 12:00 13:00 14:00 15:00 16:00 17:00 18:00 19:00 20:00 21:00 22:00 23:00 0 Time (h) FLEXDOWN (kW) exported electricity (kW) Figure 39 DMG type 7 additional operational flexibility for a spring/autumn day a) upward, b) downward 88 DMG TYPE 7 - FLEXUP 4000 Electricity (kW) 3500 3000 2500 2000 1500 1000 500 0:00 1:00 2:00 3:00 4:00 5:00 6:00 7:00 8:00 9:00 10:00 11:00 12:00 13:00 14:00 15:00 16:00 17:00 18:00 19:00 20:00 21:00 22:00 23:00 0 Time (kW) FLEXUP (kW) imported electricity (kW) 2000 1800 1600 1400 1200 1000 800 600 400 200 0 0:00 1:00 2:00 3:00 4:00 5:00 6:00 7:00 8:00 9:00 10:00 11:00 12:00 13:00 14:00 15:00 16:00 17:00 18:00 19:00 20:00 21:00 22:00 23:00 Electricity (kW) DMG TYPE 7 - FLEXDOWN Time (h) FLEXDOWN (kW) exported electricity (kW) Figure 40 DMG type 7 additional operational flexibility for a summer day a) upward, b) downward Unlike for spring and winter day, during summer day there is a lack of flexibility for the DMG unit to be able to work as an isolated system. This can be noticed in Figure 40 in the evening periods for both directions of flexibility. There are several possibilities to improve this: a) Instead of single CHP unit several smaller ones could be considered. This in terms would reduce the MSG of the CHP components of DMG unit. b) Increasing TES size, providing more flexibility upward and downward. 89 c) Increasing EHP size. Detailed analysis of off-grid operation of DMG units as well as defining the flexibility role of multi-generation systems is an interesting field for future research work. F. Discussion Decarbonisation of all energy sectors is being steered towards integration of renewable energy sources characterized by uncertainty and variability in production. If the integration of these technologies is to have a positive impact on the environment and keep the system operational cost as low as possible, new sources and concepts for provision of flexibility are needed to maintaining the equilibrium of demand and generation. In this Chapter an extensive overview of the flexibility issues is given, clearly recognizing existing and potential sources of flexibility as well as their technical capabilities and their constraints to respond to system requirements. Existing research attempts to capture and define this flexibility either by simulating different operation scenarios or by, in addition, defining an offline metric evaluating the flexibility of the existing or planned energy mix. However, rarely are those metrics properly capturing relevant technical characteristics, and never are they able to capture interactions and benefits of coupling different energy vectors. Through this review relevant parameters for defining flexibility are extrapolated, elaborated and assigned to flexibility sources according to their technical characteristics and constraints. In addition, the work recognizes the potential value that interconnecting energy vectors can have on planning and operation of future sustainable energy system, making a clear distinction from capturing decarbonisation issues from electricity only point of view. 90 MULTI-ENERGY VIRTUAL POWER PLANT A. The concept of Virtual Power Plant Increasing concerns over environmental impact of the conventional fossil fuelled power plants resulted in constant growth of renewable energy sources (RES) during the last couple of decades. However, RES cannot yet provide levels of return on investment like fossil fuels  and for this reason various incentive schemes supporting electricity produced from RES have been introduced. In 2012 the worldwide wind power capacity reached 282 GW, having 44.6 GW of new wind power plants installed. That is an annual growth rate of 19% . At the same time 2013 was a record year for newly installed photovoltaic (PV) capacity reaching 139 GW, installing around 39 GW in 2013 only . Nevertheless, the government incentives have a time limit after which RESs will have find a business case making the profit in the electricity market. Exposing RES to the rigorous market environment poses a serious challenge for RES owners, the main reason being the uncertainty of forecasted power output of RES. For instance, wind power plants (WPPs) are inherently intermittent due to stochastic nature of wind, and PV power plants’ output depends on solar irradiation and clouds. Thus, the risk of not meeting longterm and mid-term electricity delivery contracts is imminent. A number of concepts and proposals, especially for wind producer bidding strategies, are reported in the literature. In  a stochastic model, which minimizes the imbalance costs, is developed to generate the optimal wind power producer bids in a short-term market. A technique which results in best offering strategy of a wind power producer at different trading stages is presented in . A suitable trading option for wind power, based on wind power impact on market clearing prices, is proposed in . Offering strategies of interest to wind power producers are examined in . The aforementioned papers do not include any kind of support technology that could improve the wind power plant revenue. In  a combined strategy for bidding and operating in a power exchange is presented. This strategy considers the combination of a wind-generation company and a hydro-generation company. Although hydro-wind optimization is the most common concept to cope with the uncertainty and variability of RES production , , having very low marginal generation cost at the same time and ensuring favourable position in the market, similar concepts are proposed with storage and flexible demand , . 91 Majority of above mentioned research deals with participation of large scale RES units in the market, while in the context of distributed generation units (smaller units) a concept of virtual power plant (VPP) is suggested, combining different types of renewable and non-renewable generators with storage devices into a single market entity capable of controlling its power output. From the point of view of any other market agent, a VPP is a unique entity, although in reality it represents a mixture of multiple distributed energy resources (DERs) and conventional power plants . First concept of virtual power plant was described in , as a mix of different generator technologies. Incorporating distributed power plants into a single legal subject, with substantially higher installed capacity than single units have, suggests the VPP owner is connecting its power plant to the transmission instead of the distribution grid meaning that, from the point of view of the Transmission System Operator (TSO), a VPP is connected to the transmission network as a single generation/consumption node using unique electricity meter. Therefore, the VPP internal dispatch between generators inside VPP is the problem the aggregator, and crucial in order to achieve optimal results in the both directly contracted electricity delivery and electricity market. Economical, technical and communication issues have been a topic of several doctoral theses , , . Also through several relevant European Commission (EC) funded projects , ,  basic concepts and advantages of aggregating distributed generation have been defined. Project FENIX , considered as the most relevant project researching this concept, defines technical  and economic Virtual Power Plant, making a distinction between goals that could drive the behaviour of distributed units. Due to insufficient signals that would drive the operation of a technical VPP, the second type, economic signal driven operation VPP, is a more common approach. In this context the project recognizes two types of VPP according to the geographical characteristics and energy needs of countries where these concepts could be implemented. The first scenario, focusing on the example of Spain, is aimed at integrating small scale RES, usually PV and wind installed at domestic level, and is called Southern scenario. The second VPP scenario is specific for middle and northern Europe where CHP units are dominant due to relatively high heat demand. Similar concept as in the specific scenario will be further elaborated in this Chapter, specifically focusing on Multi-Energy Virtual Power Plant (MEVPP) flexibility in providing different services. Unlike the Northern scenario in project FENIX, which brings a conclusion that VPP composed of CHP 92 units only will not gain additional profit by participating in ancillary service market, this Chapter elaborates how and to what extent can additional flexibility be gained from MEVPP. Each electricity market subject in the liberalized market can participate and offer their services in different markets. For example, in case of a voluntary pool, generating companies have both open market and bilateral contracts at their disposal. Bilateral contracts are usually concluded in the long-term. Major reasons for bilateral contracting are price volatility and possible TSO constraints. Each generating company decides how much of its capacity will be contracted bilaterally in advance, and how much will be offered in the market. On the other hand, market trading may have various time effects, ranging from the day-ahead  to the balancing realtime market . Several papers propose simultaneous energy and market participation of VPP using genetic algorithms ,  and linear programming techniques , . In this Chapter only day-ahead market participation of the VPP will be considered. B. Modelling and economic analysis of Multi-Energy Virtual Power Plant The concept of MEVPP is envisioned as a single aggregator controlling and optimizing a number of DMG units. Although the concept of generation unit/demand aggregation is shown in the previous Chapter, the proposed MEVPP has its own specifics and is shown in Figure 41. ELECTRICITY MARKET VIRTUAL POWER PLANT Eexp Eexp Eimp Eexp Eimp Eimp Eimp Eexp EDS EDS Echp Fchp Faux CHP ηe, ηe Auxiliary boiler ηt Hchp Haux UNIT 1 Fchp EDS Ehp αEchp CHP ηe, ηt Electric Heat Pump COP Hchp Haux Faux Auxiliary boiler ηaux UNIT 2 ED Hhp C O N S U M E R S ED, HD (1-α)Echp ED C O N S U M E R S ED, HD (1-α)Echp Faux Fchp EDS ED Ehp αEchp CHP ηe, ηt Hchp Electric Heat Pump COP Hhp TES Hs Haux Faux Auxiliary boiler ηaux UNIT 3 C O N S U M E R S ED, HD ED Fchp … … ... CHP ηe, ηe Echp Hchp TES Hs Faux Auxiliary boiler ηt Haux UNIT N Figure 41 MEVPP concept of aggregating DMG units with local heat demand and MEVPP level electricity demand HD C O N S U M E R S ED, HD 93 The mathematical formulation of the problem is similar to those of a single unit only aggregating them into a portfolio of units; however small modifications are needed due to locality of heat demand and aggregated electricity demand. For this reason only equations showing equilibrium of production and consumption will be shown again in (7.1) and (7.2): H s (t − 1, b) + H chp (t , b) + H aux (t , b) + H ehp (t , b) − H s (t , b) = H D (t , b) ∑ (E chp b∈B E D (t ) (t , b) − Eexp (t , b) + Eimp (t , b) − Eehp (t , b)) = (7.1) (7.2) The formulation of the problem is similar to a single unit problem aggregating single units of different types, denoted with b in equations. It is clear that the MEVPP concept can be designed of different unit types in a large range of options. For the purpose of analyses, 7 MEVPP types are defined each composed of 60 units. For easier understanding these 7 types are shown in Table 10, each type defined by a number of different units. Table 10 Different concepts of aggregating DMG into MEVPP DMG TYPE 2 DMG TYPE 3 DMG TYPE 4 DMG TYPE 5 DMG TYPE 6 MEVPP 1 30 30 - - - DMG TYPE 7 - MEVPP 2 - - 30 30 - - MEVPP 3 - - - - 30 30 MEVPP 4 20 20 5 5 5 5 MEVPP 5 5 5 20 20 5 5 MEVPP 6 5 5 5 5 20 20 MEVPP 7 10 10 10 10 10 10 For each of the defined MEVPP a detailed sensitivity analysis is conduced, varying gas and electricity prices ±25% and ±50% from current prices in all possible combinations. These results are presented in Figure 42, a concept of operation costs and aggregation benefits matrix of MEVPP. The X axis of the Figure 42 contains electricity prices varying from -50% to +50% of todays prices, while Y axis presents the same variation of gas prices. Each (x,y) point on Figure 42 contains a graph of operational prices of each defined MEVPP. In addition each graph presents 94 benefits of aggregating units expressed as additional operational cost savings comparing it to uncoordinated DMG units. From the operational cost and aggregation benefits matrix several relevant conclusions can be drawn: • For low electricity prices (-50% of the current electricity price) MEVPP 1, which is composed of EHP units only, has the lowest operational cost. However, MEVPP 3 composed only of DMG type 6 and DMG type 7 units shows similar operational cost and, in addition, it becomes the most favourable in cases with low electricity and low gas prices (both -50% of the current prices). This again demonstrates high flexibility of DMG 6 and DMG 7 to varying market prices. • For high electricity prices (+50% of current electricity prices) MEVPP 1 is the least favourable. If the gas price increases as well (both prices are +50% of todays prices) this levels up and all MEVPP have similar operational costs. In cases when gas price is reduced (the extreme case when electricity is 50% higher than today and gas 50% lower than today) the lowest operational cost, as expected, have MEVPP based on CHP units MEVPP 2 and MEVPP 3. • In scenarios where electricity prices remain at the same level as today, it can be seen (varying prices of gas) MEVPP 3 is the most favourable concept for all changes. Similar can be applied to scenarios when gas prices remain as today and electricity prices are changed in the interval [-50%, +50%]. 95 MEVPP 1 operational cost MEVPP 2 operational cost MEVPP 3 operational cost MEVPP 4 operational cost MEVPP 5 operational cost Benefits of aggregations Figure 42 Operation costs and aggregation benefits matrix of MEVPP MEVPP 6 operational cost MEVPP 7 operational cost 96 • In terms of aggregation benefits, for almost all cases, spikes for MEVPP 2 and MEVPP 4 can be noticed. For MEVPP 2 spikes can be easily explained with flexibility gain from coupling non-flexible DMG4 and flexible DMG 5. DMG 4, when operating as a single unit, is driven only with heat demand. When coupled with DMG 5 the excess electricity that it produces is used to cover the electricity demand (of all units). Flexible DMG 5 in those cases covers local heat from the storage, and CHP unit is not operating, thus saving fuel and reducing the operational cost. In case of MEVPP 4 benefits of combining EHP and CHP based types can be seen the best. Coordinated operation enables EHP to use excess electricity from CHP types to produce local heat demand. The concept is in fact, only on a larger scale, similar to DMG type 7. • For current electricity prices, changing only gas prices, benefits of aggregation are ranging from 3-8% for MEVPP composed of same type units and between 8 and 15% for MEVPP combined of different unit types. • For current gas prices, changing only electricity prices, benefits of aggregation are in range of 2-8% from MEVPP composed of same type units, 7-18% for MEVPP combined of different unit types. • Extreme cases from both operational cost and aggregation benefits can be noticed during low gas prices and high electricity prices. MEVPP composed of units based on CHP have negative operational costs and thus high aggregation benefits. C. Future work Presented analyses of Multi-Energy Virtual Power Plant economics are based on the assumption that MEVPP is not a significant player in the system, meaning that the share of DMG is insufficient for them to have an impact on creating market prices. Thus, MEVPP is a price taker. In case MEVPP becomes a significant component of future low carbon system, there is a need for a different approach in assessing the benefits of MEVPP. To properly define the impact MEVPP would have on the system, an entire system model is required treating MEVPP as a price making component. Such a comprehensive analysis would in a synthetic way define the benefits of the DMG on a system scale. This approach is a logical direction for future research. A simplified 97 concept presenting MEVPP as a price making subject in the electricity market is shown in Figure 43. ENERGY NUCLEAR PP PRICES ENERGY WIND PP PRICES PRICES ENERGY HYDRO PP ENERGY ENERGY COAL PP PRICES GAS PP PRICES PRICES ENERGY ELECTRICITY MARKET MEVPP DEMAND HEATING SYSTEM Figure 43 Simplified model of price maker concept of MEVPP 98 CONCLUSION While a great number of studies are focusing on the emerging concept of an electrical Smart Grid, there is yet relatively little attention paid to the techno-economic and environmental benefits that smart integration of multiple energy vectors could bring. Most analyses still consider decoupled energy vectors and propose operational and strategic development schemes, particularly for DH systems, independent of each other. In addition, there is no systematic comparison of the benefits that alternative energy system options could bring. The presented thesis introduces a unified and comprehensive techno-economic and environmental framework, supported by a mathematical optimization model based on MILP, to compare high efficiency and high flexibility DMG options for district energy system applications. Economic benefits on a daily and annual operational basis have been analysed and discussed, supported by an investment analysis for planning purposes which was tested for robustness through various sensitivity analyses. A comprehensive environmental assessment through global (primary energy and CO2 emission reduction) and local (NOx and CO pollutants) emission analysis has also been performed for different options. The results highlight how flexible integrated schemes with CHP and EHP, in case supported by TES, bring cost savings as high as 50% compared to the reference case of DH boiler. Owing to their intrinsic flexibility to respond to external conditions, such schemes also prove extremely robust to substantial changes in energy prices and perform well even with demanding rates of return. In addition, the environmental benefits from advanced DMG options can also be significant, and the thesis highlights how decarbonisation of the gas sector by just 10% could allow substantial environmental benefits for such DMG systems even with electrical grid decarbonisation. Further benefits from flexible utilization of integrated DMG schemes could accrue by playing in intraday balancing and ancillary services markets. The presented research on economic and environmental benefits of flexible DMG has been published in  and . In addition, the thesis introduces the concept of aggregated DMG units called Multi-Energy Virtual Power Plant. Single units cannot participate in the market or, in rare cases when they can, their participation is limited due to small power. A concept of aggregated participation, in order to improve market position of DMG, is presented through detailed economic analyses for a range of possible aggregation mixes and varying prices of both gas and electricity. The results are presented in an operational cost and aggregation benefits matrix concept, a novel approach for 99 assessing DMG benefits. While aggregation benefits vary depending on the market conditions, the concept clearly shows the benefits of aggregating different types of DMG units as they demonstrate high flexibility regardless of the market price scenarios. The flexibility of DMG units primarily comes from their possibility to shift from one energy vector to another and, by doing so, to always select the optimal input vector for provision of the desired output. This concept is additionally emphasised by introducing multi-energy operational flexibility metric. Alongside defining the mathematical concept for it, the metric has been tested against the most comprehensive DMG type. The additional flexibility that can be gained is dependent on the operational points, meaning that by providing this additional flexibility, the unit maintains the desired outputs to the final consumer but also fulfils the contracted obligations with the energy market. Capability of DMG units to provide additional flexibility by shifting between different components brings benefits in terms of further reducing operational cost by providing systems ancillary services. Parts of this work have been submitted for publication . 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Takemura, Performance analysis of a CO2 heat pump water heating system under a daily change in a standardized demand, Energy. 35 (2010) 718–728. 113 LIST OF FIGURES Figure 1 Energy flow layout of a) DMG type 1, b) DMG type 2, c) DMG type 3, d) DMG type 4, e) DMG type 5, f) DMG type 6, g) DMG type 7 ....................................................................................................................................... 11 Figure 2 DMG types creation flow diagram ................................................................................................................ 13 Figure 3 Demand profiles and electricity prices for a specific winter day ................................................................... 21 Figure 4 Daily operation of DMG type 4 for a typical winter day – electricity and heat ............................................. 22 Figure 5 Daily operation of DMG type 5 for a typical winter day – electricity and heat ............................................. 24 Figure 6 Daily operation of DMG type 6 for a typical winter day – electricity and heat ............................................. 25 Figure 7 Daily operation of DMG type 7 for a typical winter day – electricity and heat ............................................. 27 Figure 8 Demand profiles and electricity prices for a specific spring/autumn day ...................................................... 28 Figure 9 Daily operation of DMG type 6 for a typical sprig/autumn day – electricity and heat .................................. 29 Figure 10 Daily operation of DMG type 7 for a typical sprig/autumn day – electricity and heat ................................ 31 Figure 11 Demand profiles and electricity prices for a specific summer day .............................................................. 32 Figure 12 Daily operation of DMG type 6 for a typical summer day – electricity and heat ........................................ 33 Figure 13 Daily operation of DMG type 7 for a typical summer day – electricity and heat ........................................ 34 Figure 14 Results for sensitivity analyses for DMG type 5 ......................................................................................... 38 Figure 15 Results for sensitivity analyses for DMG type 6 ......................................................................................... 39 Figure 16 Results for sensitivity analyses for DMG type 7 ......................................................................................... 40 Figure 17 NPV dependency on discount rate for different DMG types ....................................................................... 41 Figure 18 Sensitivity analyses for DMG types 5, 6 and 7 ............................................................................................ 42 Figure 19 Half hourly Average Emission Factor for UK in 2011 and 2012 ................................................................ 46 Figure 20 DMG options carbon footprint .................................................................................................................... 47 Figure 21 Results for sensitivity analyses for DMG type 5 ......................................................................................... 53 Figure 22 Results for sensitivity analyses for DMG type 6 ......................................................................................... 54 Figure 23 Results for sensitivity analyses for DMG type 7 ......................................................................................... 55 Figure 24 NPV difference in sensitivity analyses for DMG type 5.............................................................................. 55 Figure 25 NPV difference in sensitivity analyses for DMG type 6.............................................................................. 56 Figure 26 NPV difference in sensitivity analyses for DMG type 7.............................................................................. 56 Figure 27 NPV dependency on discount rate for different DMG types ....................................................................... 57 Figure 28 Sensitivity analyses for DMG types 5, 6 and 7 ............................................................................................ 58 Figure 29 Modelling difference sensitivity analyses for DMG types 5, 6 and 7 .......................................................... 58 Figure 30 DMG options carbon footprint .................................................................................................................... 59 Figure 31 DMG options carbon footprint modelling differences ................................................................................. 59 Figure 32 Flexibility requirements change with increasing share of RES ................................................................... 63 Figure 33 Flexible and inflexible sources .................................................................................................................... 66 114 Figure 34 Hierarchical control of DR and VPP ........................................................................................................... 71 Figure 35 Flexibility from energy vector interaction ................................................................................................... 78 Figure 36 Current and future flexible energy systems ................................................................................................. 79 Figure 37 Flexibility provision a) optimal operation points, b) upward flexibility requirement, c) downward flexibility requirement.................................................................................................................................................. 81 Figure 38 DMG type 7 additional operational flexibility for a winter day a) upward, b) downward .......................... 86 Figure 39 DMG type 7 additional operational flexibility for a spring/autumn day a) upward, b) downward .............. 87 Figure 40 DMG type 7 additional operational flexibility for a summer day a) upward, b) downward ........................ 88 Figure 41 MEVPP concept of aggregating DMG units with local heat demand and MEVPP level electricity demand ..................................................................................................................................................................................... 92 Figure 42 Operation costs and aggregation benefits matrix of MEVPP ...................................................................... 95 Figure 43 Simplified model of price maker concept of MEVPP ................................................................................. 97 115 LIST OF TABLES Table 1 Optimal sizes and relevant efficiencies of units for different DMG DG schemes .......................................... 20 Table 2 Annual operational costs of different DMG types .......................................................................................... 35 Table 3 Input data for the investment analyses ............................................................................................................ 37 Table 4 Multi-generation primary energy savings for different DMG options ............................................................ 45 Table 5 Local emissions assessments for different DMG options ............................................................................... 49 Table 6 Annual operational costs of different dmg types............................................................................................. 51 Table 7 Optimal sizes and relevant efficiencies of units for different DMG DH schemes .......................................... 52 Table 8 Modelling differences in primary energy savings for different DMG options ................................................ 60 Table 9 Local emissions assessments for different DMG options ............................................................................... 60 Table 10 Different concepts of aggregating DMG into MEVPP ................................................................................. 93 116 NOMENCLATURE Acronyms and Indices ACE Area Control Errors AEF Average Emission Factor BA Balancing Area BRP Balancing Responsible Party CAES Compressed Air Energy Storage CHP Combined Heat and Power CO Carbon Oxide CO2 Carbon Dioxide CPS1, CPS2 Control Performance Standard DA Day Ahead (Market) DH District Heating DMG Distributed Multi-Generation DR Demand Response EHP Electric Heat Pump ELCC Effective Load Carrying Capability EV Electric Vehicle FF Flexibility Factor IREE Insufficient Ramping Resource Expectation LOLE Loss od Load Expectation LSP Local Separate Production MEVPP Multi-Energy Virtual Power Plant MILP Mixed Integer Linear Programming MSG Minimum Stable Generation NERC North American Electric Reliability Corporation NOx Nitrogen Oxides POP Preferable Point of Operation PPES Poligeneration Primary Energy Saving 117 PCO2ER Poligeneration CO2 Emission Reduction RES Renewable Energy Sources SP Separate Production TSO Transmission System Operator UC Unit Commitment V2G Vehicle-to-Grid VPP Virtual Power Plant D Demand e Electricity th Thermal aux Auxiliary s Thermal energy storage 1,2,3,4,5,6,7 Type of Distributed Multi-Generation option Input values ŋe Electric efficiency of a CHP unit ŋth Thermal efficiency of a CHP unit α Shifting factor COP Coefficient of performance ED Electricity demand HD Heat demand Echp_min Minimum stable generation of CHP unit ramp Ramp rate value of the CHP unit Decision variables Echp Electricity produced by CHP unit Hchp Heat produced by a CHP unit Ichp Binary variable indicating if the CHP unit is on/off Ion, Ioff Binary variables indicating turning on or off of the CHP unit Hs State of charge of thermal energy storage Haux Heat produced by auxiliary boiler 118 Hhp Heat produced by EHP Ehp Electricity needed by EHP for heat production Ehp_chp Electricity produced by CHP and used by EHP for heat production Ehp_g Electricity from the electric grid and used by EHP for heat production 119 BIOGRAPHY Tomislav Capuder was born in 1983 in Zagreb. In 2008 he graduated from the Faculty of Electrical Engineering and Computing, Department of Energy and Power Systems, obtaining the title of Master of Electrical Engineering. In 2014 he received doctoral degree from the same University. In 2012 and 2013 he was a visiting researcher at the University of Manchester with Dr. Pierluigi Mancarella working on Multi Energy Systems planning and modelling. His areas of expertise include: Energy Systems Planning and Modelling, Integrated infrastructures, Distributed Energy Systems, Energy markets, Environmental Protection in Power System. Tomislav Capuder has published 6 journal papers and 16 international conference papers. He participated in over 50 industry sponsored projects related to various topics of power system planning and operation. Published papers: • Capuder, Tomislav; Mancarella, Pierluigi. Techno-economic and Environmental Modelling and Optimization of Flexible Distributed Multi-Generation Options, Energy (Oxford). 71 (2014); 516-533 • Capuder, Tomislav; Mancarella, Pierluigi. Modelling and Assessment of the Technoeconomic and Environmental Performance of Flexible Multi-Generation Systems, 18th Power Systems Computation Conference, Wroclaw, Poland, Aug. 18-22 2014. • Kuzle, Igor; Havelka, Juraj; Pandžić, Hrvoje; Capuder, Tomislav. Hands-on Laboratory Course for Future Power System Experts, IEEE Transactions on Power Systems, 29 (2014) , 4; 1963-1971. • Pandžić, Hrvoje; Kuzle, Igor; Capuder, Tomislav. Virtual power plant mid-term dispatch optimization, Applied Energy, vol. 101, no. 1, Jan. 2013, pp. 134-141. • Capuder, Tomislav; Pandžić, Hrvoje; Kuzle, Igor; Škrlec, Davor. Specifics of integration of wind power plants into the Croatian transmission network, Applied Energy, vol. 101, no. 1, Jan. 2013, pp. 142-150. • Sučić, Stjepan; Dragičević, Tomislav; Capuder, Tomislav; Delimar, Marko. Economic dispatch of virtual power plants in an event-driven service-oriented framework using standards-based communications, Electric power systems research, vol. 81, no. 12, Dec. 2011, pp. 2108-2119, 120 • Tomislav Capuder, Matija Zidar, Davor Škrlec. Evolutionary algorithm with fuzzy numbers for planning active distribution network, Electrical engineering, vol. 94, no. 3, pp. 135-145, Sep. 2012. • Kuzle, Igor; Holjevac, Ninoslav; Capuder, Tomislav. Model Predictive Control for Scheduling of Flexible Microgrid Systems // Conference on Sustainable Development of Energy, Water and Environment Systems, Venice-Istanbul, 2014 • Zidar, Matija; Capuder, Tomislav; Georgilakis, Pavlos; Škrlec, Davor. Convex AC Optimal Power Flow Method for Definition of Size and Location of Battery Storage Systems in the Distribution Grid // Conference on Sustainable Development of Energy, Water and Environment Systems, Venice-Istanbul, 2014 • Capuder, Tomislav; Pandžić, Hrvoje; Bošnjak, Darjan; Kuzle, Igor; Škrlec, Davor. Specifics of Integration of Wind Power Plants into the Croatian Transmission Network// Conference on Sustainable Development of Energy, Water and Environment Systems, Dubrovnik, Croatia, 2011 • Capuder, Tomislav; Periša, Ivan; Hrkec, Dinko; Zidar, Matija; Tomiša, Tomislav; Škrlec, Davor. Integration of Power Quality Monitoring System in Croatian Distribution Network // 21st International Conference on Electricity Distribution (CIRED), Frankfurt, Germany, 2011 • Dragičević, Tomislav; Capuder, Tomislav; Jelavić, Mate; Škrlec, Davor. Modeling and Simulation of Isolated DC Microgrids Supplied by Renewable Energy Resources // Conference on Sustainable Development of Energy, Water and Environment Systems, Dubrovnik, Croatia, 2011 • Zidar, Matija; Capuder, Tomislav; Dragičević, Tomislav; Škrlec, Davor. Planning of the Distribution Network Ogulin Using Optimization Tool CADDiN // CIRED 21st International Conference on Electricity Distribution, Frankfurt, Germany, 2011 • Capuder, Tomislav; Pandžić, Hrvoje; Bošnjak, Darjan; Kuzle, Igor; Škrlec, Dubravka. Analysis of Incentives Approach to Renewable Sources and Cogeneration // Proceedings of the 2010 7th International Conference on the European Energy Market, Madrid, Spain 2010 121 • Capuder, Tomislav; Periša, Ivan; Škrlec, Davor. Timeframe for strategy of modernizing Croatian distribution network SCADA // IEEE Power&Energy Society General Meeting Proceedings. Minneapolis, Minnesota, USA, 2010 • Capuder, Tomislav; Periša, Ivan; Škrlec, Davor. Smart Vision of the Croatian Distribution System // Smart Grids and E-Mobility, Brussels, Belgium, 2010 • Capuder, Tomislav; Zidar, Matija; Škrlec, Davor. Distributed Generation Integration Using Evolutionary Algorithm with Fuzzy Numbers // Proceedings of 3rd Power Optimization and Control Conference, Gold Coast, Australia, 2010 • Carević, Sanela; Capuder, Tomislav; Delimar, Marko. Applications of Clustering Algorithms in Long-term Load Forecasting // Proceedings of 1st IEEE Energycon Conference, Manama, Bahrain, 2010 • Grganić, Hrvoje; Capuder, Tomislav; Delimar, Marko. Croatian Electric Power System Modeling for Stability Analysis // Proceedings of 1st IEEE Energycon Conference, Manama, Bahrain, 2010 • Škrlec, Davor; Kuzle, Igor; Delimar, Marko; Bošnjak, Darjan; Capuder, Tomislav; Pandžić, Hrvoje. Large Scale Wind Power Plants Integration into the Croatian Power System // Proceedings of EPE PEMC. Ohrid, Macedonia, 2010 • Capuder, Tomislav; Lugarić, Luka; Brekalo-Štrbić, Jurica; Krajcar, Slavko. Optimizing the tramway power system in Zagreb // 5th IEEE Vehicle Power and Propulsion Conference Proceedings. Dearborn, Michigan, USA 2009 • Kuzle, Igor; Škrlec, Davor; Bošnjak, Darjan; Capuder, Tomislav; Pandžić Hrvoje. Connection of a DFIG-based Wind Farm to the Transmission Network // Ee 2009. Novi Sad, Serbia, 2009 122 ŽIVOTOPIS Tomislav Capuder rođen je u Zagrebu 1983. Diplomirao je na Fakultetu elektrotehnike i računarstva, Sveučilišta u Zagrebu, 2008. godine na smjeru elektroenergetika. Doktorirao je 2014 na Fakultetu elektrotehnike i računarstva, Sveučilišta u Zagrebu. U 2012. i 2013. boravio je na stručnom usavršavanju na Sveučilištu u Manchesteru gdje je sa Dr. Pierluigijem Mancarellom radio na temi modeliranja, upravljanja i planiranja višegeneracijskih sustava. Tomislav Capuder objavio je 6 radova u međunarodnim časopisima A kategorije te 16 radova na međunarodnim konferencijama, te je urednik dva zbornika radova. Sudjelovao je kao suradnik na više od 50 projekata i studija sa industrijom i to iz raznih područja planiranja i vođenja elektroenergetskog sustava.
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