ENSYMORA Energy systems modelling, research and analysis

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Scientific summary


Energy markets are facing three challenges:

  • Internationalisation with more cross-border trade, especially of electricity,

  • Integration of large amounts of variable, only partly predictable renewable energy with low marginal costs

  • Investors are confronted with higher risk and uncertainty, partly as a consequence of market liberalisation and partly because of the two above mentioned issues.

Moreover, the Danish Government has a long-term target of abandoning the use of fossil fuels. Altogether, these issues point to a future energy system that will be significantly different from the present. Over the next 10-20 years, Danish investments in new technologies and systems will amount to billions of kroner, and wrong decisions may be fatal for companies and society.

Therefore, to perform proper analyses and give sound recommendations, methods and models describing energy systems need development and improvement. This project focuses on methods and models related to electricity demand and supply. However, as electricity is part of the total energy system, models, methods and analyses need to integrate other parts of the energy system. Further, analyses include incentives and policy related issues.

By means of statistical analyses and econometrics, hourly electricity demand and production such as wind power production are analysed and modelled. Along the same lines, possibilities for hourly demand response are identified and wind power forecasts are improved. Using stochastically varying forecasts for demand and wind power production as input, models for both operation and investment under uncertainty are developed. The methodology relies on stochastic programming modelling and real options analysis. Analysis of incentives and policy instruments are based on economic theory. Finally, overall energy systems and markets are analysed using scenario-analyses.

Objectives


The objective is to develop and improve methods and models used for energy systems analysis and planning to better reflect the large changes in future energy systems and to use the models to analyse technical options, economic incentives, and policies related to both demand and supply of electricity. In particular, the models are used to address the challenges of a fossil free energy system.

The main results of the project


For society

  • Development of decision support tools for operation scheduling and investment planning under uncertainty.

  • Assessments of interactions between uncertainty in electricity demand and renewable power production and electricity system flexibility.

  • Policy recommendations for an efficient future electricity system design.

Scientific

  • Models and analyses of hourly demand for electricity.

  • Improved representation of stochastic variations of wind power production in energy system models.

  • Stochastic programming and real options models for operation scheduling and investment planning under uncertainty.

  • Analyses of incentives and policies for deployment of renewable energy.

  • Economic and system evaluation of alternative power market designs.

Dissemination

  • At least 20 articles published in international peer-reviewed journals.

  • Three go-home meetings, a seminar, and at least 10 presentations at inter-national conferences.

Education

  • Supervision and completion of 4 PhDís and training of two post docs during the project.

Innovative value, impact and relevance of the project


With increases in deployment of renewable energy, extended electricity system flexibility, additions to international transmission capacity and power market expansions, the future electricity system will differ significantly from the current. To cope with the differences, it is necessary to extend existing and develop new models, firstly for prediction of electricity demand and renewable power production, and, secondly for decision support in operation scheduling and investment planning. These models are suitable for analysis of incentives, policies and market design and for developing scenarios for future electricity systems. New contributions include electricity demand forecasts with an hourly resolution, stochastic variations in both demand and supply forecasts, the development of short-term and long-term stochastic decision support tools that take into account uncertainty, demand flexibility, flexible production technologies, timing of investments and finally the analysis of market design under such conditions. The aim is an ability to assist in real-life operation and planning and to have a proper basis for technology and policy recommendations. The target group is the Danish Energy Authority, the Danish TSO, and power producers participating in the power market. 

The projectís methodology and results


The project is divided into six scientific work packages (WP's) shown in the following figure:

WP1 seeks to model electricity demand with an hourly resolution. This is required for analyses of demand flexibility and has become possible with the introduction of hourly metering. WP2 aims to forecast stochastic variations in both demand and renewable supply. WP3 and WP4 consider short-term and long-term challenges regarding operation and investment within a future energy system taking into account uncertainties and stochastic variations in demand and supply and taking both a social and a company perspective. WP5 analyses incentives, markets, and policy instruments for consumers, investors, and producers of electricity. Finally, WP6 links the electricity system and other parts of the energy system in overall scenario-analyses.

 WP1: Modelling hourly electricity demand

This WP is based on Adam/Emma and data for hourly consumptions by categories of consumers. Emma is an econometric state-of-the-art model linked to the macro-economic model Adam and is used by the Danish Energy Authority and Energinet.dk for projections and energy planning. Emma gives annual forecasts of energy consumption by categories of consumers and types of energy.

From hourly meters, the Danish Energy Association collects data for hourly electricity consumption by categories of consumers. By using these data the project will develop hourly consumption profiles, quantiles and peak demand and use econometrics to analyse consecutive hourly demands by categories of consumers. Finally, demand from neighbouring countries will be analysed using hourly data from the Nord Pool and German power exchanges.

WP2: Stochastic variation in wind, solar production and power loads

Today several methods for reliable and accurate forecasts of the wind and solar power exist. Existing methods focus on the point forecast, and the performance is typically measured using normalized root mean square errors. This is contradictory to the fact that a reliable knowledge of the forecast uncertainty is of similar value as the value of a state-of-the-art system for point forecasting.

In order to provide optimal methods for scenario analysis in both operation and investment, the methods should focus on a full description of the stochastic variation of the forecast and the correlation in time of the forecast errors. The correlation in time of the forecast errors is important for systems with start/stop costs, heat storage, and/or 'implicit' storage that arise by allowing the hydropower production to be exchanged with wind power production.

This WP considers methods for forecasting of wind power, solar power, power load, district heating load and natural gas load with a focus on modelling the full stochastic variations of forecasts and forecast errors.

WP3: Electricity system operation and investment under uncertainty

WP3 addresses short-term operation scheduling and long-term investment planning under uncertainty and from a system perspective.

WP4: Operation and investment of independent power producers under uncertainty

In continuation of WP3, the focus of WP4 is operation scheduling and investment planning under uncertainty and from the perspective of a single agent.

WP5: Incentives and markets

Radical new energy systems will require development of new markets structures and new national incentives, perhaps even internationally harmonized incentive schemes.

WP6: Scenario-analyses

WP6 has the role of gathering results from other WPs and testing the modelling approach. Furthermore, a number of future scenarios will be developed taking into account already existing scenarios, e.g. from the DSF-project CEESA and the Danish Commission on Climate Change.

The projectís international dimension


The changes towards integration of renewable power production, increases in demand flexibility, grid expansions and international exchange are objectives of utmost importance all over Europe. Moreover, policy instruments are usually either international or at least internationally coordinated. Clearly, it is of both national and international interest to understand how energy systems and markets as well as independent power producers and investors are affected by the changes. For this reason, the methodology of the project will be generally applicable to various energy systems and markets in spite of individual opportunities for integration of renewable energy, varying potentials for flexible demand and different possibilities for grid expansion.

The international experts involved in the project are highly recognized in each of their research fields and bring valuable knowledge regarding national priorities and frontiers in international research into the project. The international experts will co-supervise and host PhD students for 3-6 months and possibilities for exchanging PhD students and guest researchers will be explored.

Publication and promotional strategy and exploitation of results


Publication and exploitation of results include the following initiatives:

  • A public homepage describing the project and presenting methods, models and results developed.

  • Articles in international peer reviewed journals. The project is expected to generate more that 20 submitted articles during the project period.

  • Presentations at international conferences in order to get feedback from the international research community. Examples of relevant conferences are the International Association for Energy Economics (IAEE) conferences, the IEEE Power and Energy society general meetings, the International conferences on Probabilistic Methods Applied to Power Systems (PMAPS) and the European Wind Energy conference (EWEC).

  • Dissemination towards the Danish Energy sector will be organized as annual seminars or go home meetings organized in cooperation with Energinet.dk and the Danish Energy Association.

  • A user group of institutions interested in the methods, models, and analyses developed in the project will be established and invited to comment on project priorities, progress and exploitation of results.