• Energy Research

Renewable & sustainable energy reviews 159, 112163 (2022). doi:10.1016/j.rser.2022.112163 special issue: "MODEX: energy system model comparisons through harmonized applications / Edited by Hans-Christian Gils, Christoph Weber, Dominik Möst, Jochen Linßen" Published by Elsevier Science, Amsterdam [u.a.]

Renewable & sustainable energy reviews 159, 112163 (2022). doi:10.1016/j.rser.2022.112163 special issue: "MODEX: energy system model comparisons through harmonized applications / Edited by Hans-Christian Gils, Christoph Weber, Dominik Möst, Jochen Linßen" Published by Elsevier Science, Amsterdam [u.a.]

Abstract The European Union Emission Trading System (EU ETS) constitutes the core instrument of the European Union climate protection policy. It limits greenhouse gas emissions of its member states and aims at facilitating an efficient allocation of emission reduction across national borders. Accompanying this policy at the European level, individual member states have introduced national mitigation policies, including renewable energy (RES) expansion measures or coal phase-outs. This study examines to what extent national policies affect the effectiveness of the EU ETS and to what degree the impact is reflected in prices for European Union Allowances (EUA). To investigate this question, a fundamental optimization model of the European electricity markets is deployed and model endogenous EUA prices are derived with a set of future market scenarios. Overall findings indicate that fundamental market forces strongly affect EUA prices. Furthermore, national policies play a critical role: The expansion of RES does not affect the capacity of the EU ETS to provide sufficient price signals for the desired level of decarbonization but a coal phase-out has a strong price-suppressing effect. A withdrawal of certificates can re-establish the effectiveness of the EU ETS but prices can rise drastically when overestimating the necessary amount.

Abstract The European Union Emission Trading System (EU ETS) constitutes the core instrument of the European Union climate protection policy. It limits greenhouse gas emissions of its member states and aims at facilitating an efficient allocation of emission reduction across national borders. Accompanying this policy at the European level, individual member states have introduced national mitigation policies, including renewable energy (RES) expansion measures or coal phase-outs. This study examines to what extent national policies affect the effectiveness of the EU ETS and to what degree the impact is reflected in prices for European Union Allowances (EUA). To investigate this question, a fundamental optimization model of the European electricity markets is deployed and model endogenous EUA prices are derived with a set of future market scenarios. Overall findings indicate that fundamental market forces strongly affect EUA prices. Furthermore, national policies play a critical role: The expansion of RES does not affect the capacity of the EU ETS to provide sufficient price signals for the desired level of decarbonization but a coal phase-out has a strong price-suppressing effect. A withdrawal of certificates can re-establish the effectiveness of the EU ETS but prices can rise drastically when overestimating the necessary amount.

Abstract Wind power generation and its impacts on electricity prices has strongly increased in the EU. Therefore, appropriate mark-to-market evaluation of new investments in wind power and energy storage plants should consider the fluctuant generation of wind power and uncertain electricity prices, which are affected by wind power feed-in (WPF). To gain the input data for WPF and electricity prices, simulation models, such as econometric models, can serve as a data basis. This paper describes a combined modeling approach for the simulation of WPF series and electricity prices considering the impacts of WPF on prices based on an autoregressive approach. Thereby WPF series are firstly simulated for each hour of the year and integrated in the electricity price model to generate an hourly resolved price series for a year. The model results demonstrate that the WPF model delivers satisfying WPF series and that the extended electricity price model considering WPF leads to a significant improvement of the electricity price simulation compared to a model version without WPF effects. As the simulated series of WPF and electricity prices also contain the correlation between both series, market evaluation of wind power technologies can be accurately done based on these series.

Abstract Wind power generation and its impacts on electricity prices has strongly increased in the EU. Therefore, appropriate mark-to-market evaluation of new investments in wind power and energy storage plants should consider the fluctuant generation of wind power and uncertain electricity prices, which are affected by wind power feed-in (WPF). To gain the input data for WPF and electricity prices, simulation models, such as econometric models, can serve as a data basis. This paper describes a combined modeling approach for the simulation of WPF series and electricity prices considering the impacts of WPF on prices based on an autoregressive approach. Thereby WPF series are firstly simulated for each hour of the year and integrated in the electricity price model to generate an hourly resolved price series for a year. The model results demonstrate that the WPF model delivers satisfying WPF series and that the extended electricity price model considering WPF leads to a significant improvement of the electricity price simulation compared to a model version without WPF effects. As the simulated series of WPF and electricity prices also contain the correlation between both series, market evaluation of wind power technologies can be accurately done based on these series.

As the costs for the new planned underground high-voltage direct current (HVDC) line between Spain and France exceed the ones of alternating current (AC) overhead line alternatives it raises the question if the high costs can be justified by adequate benefits for society like increased security of supply. For this reason, the economic effects of the planned HVDC underground transmission line are evaluated through a cost-benefit analysis and the results are compared to an alternative new AC overhead line along the same route as well as an upgrade of a nearby AC overhead line. For an evaluation of the economic welfare effects, investment and operating costs as well as benefits from increased security of supply are quantified using the electricity network model ELMOD. All considered line options result in overall positive discounted net welfare gains for society with the new AC line option showing the highest ones. However, it is stressed that the HVDC solution holds certain advantages over the AC technology that cannot be explicitly quantified in a line assessment.

As the costs for the new planned underground high-voltage direct current (HVDC) line between Spain and France exceed the ones of alternating current (AC) overhead line alternatives it raises the question if the high costs can be justified by adequate benefits for society like increased security of supply. For this reason, the economic effects of the planned HVDC underground transmission line are evaluated through a cost-benefit analysis and the results are compared to an alternative new AC overhead line along the same route as well as an upgrade of a nearby AC overhead line. For an evaluation of the economic welfare effects, investment and operating costs as well as benefits from increased security of supply are quantified using the electricity network model ELMOD. All considered line options result in overall positive discounted net welfare gains for society with the new AC line option showing the highest ones. However, it is stressed that the HVDC solution holds certain advantages over the AC technology that cannot be explicitly quantified in a line assessment.

Abstract Linear energy system models are a crucial component of energy system design and operations, as well as energy policy consulting. If detailed enough, such models lead to large-scale linear programs, which can be intractable even for the best state-of-the-art solvers. This article introduces an interior-point solver that exploits common structures of energy system models to efficiently run in parallel on distributed-memory systems. The solver is designed for linear programs with doubly-bordered block-diagonal constraint matrix and makes use of a Schur complement based decomposition. In order to handle the large number of linking constraints and variables commonly observed in energy system models, a distributed Schur complement preconditioner is used. In addition, the solver features a number of more generic techniques such as parallel matrix scaling and structure-preserving presolving. The implementation is based on the solver PIPS-IPM. We evaluate the computational performance on energy system models with up to four billion nonzero entries in the constraint matrix—and up to one billion columns and one billion rows. This article mainly concentrates on the energy system model ELMOD, which is a linear optimization model representing the European electricity markets by the use of a nodal pricing market-clearing. It has been widely applied in the literature on energy system analyses in recent years. However, it will be demonstrated that the new solver is also applicable to other energy system models.