Effective framework conditions for cost optimal expansion of renewables with complementary decentralized flexibility options in the electricity sector
Duration: März 2016 bis Oktober 2019
Funded by: German Federal Ministry for Economics and Energy (BMWi)
Project Participants: Universität Stuttgart, Institut für Energiewirtschaft und Rationelle Energieanwendung (IER)
Project Manager at the Institute of Networked Energy Systems: Dr. Christoph Schimeczek
Project Description: The rising share of supply-dependent renewable energy in the power system leads to the need for increasing flexibility at different system levels. At the decentralized level in the electricity sector, the controllable (dispatchable) conventional and renewable energy generation, energy storage, demand response, and the expansion of transmission and distribution girds must be brought together integrative as flexibility options. However, implementation measures of the energy transition policies show discrepancies with the model results a system optimization approaches on purely techno-economic basis. For example, a system optimized curtailment of variable renewable energies (VRE) from the perspective of a social planner leads to another utilization of these plants as an actor specific or wholesale power price signal (market-driven) curtailment. The power price driven behavior is also dependent on the availability of flexibility options and their specific cost and impacts and utilization, which are available to market participants at that time.
This can lead to a significant "Efficiency Gap", meaning a crucial difference in the efficiency of theoretical achievement potential and the behavior of actors in reality. In order to actually achieve a cost-optimized development of RES-E targets, the incentives for actors in terms of investment and operational optimization of complementary flexibility options and renewable energy must be given greater consideration. Likewise, the development and partial reorientation of the regulatory framework and the support instrument designs have to be included in the calculations and simulation runs. First, with the planned activities of coupling a fundamental power market model following a cost-optimization approach (E2M2 from IER at University of Stuttgart) and an agent-based modelling (ABM) approach (AMIRIS from DLR), the discrepancy between an economically cost-minimizing system optimization and an actor-specific market impact analysis is identified (total cost and acceptance). Second, the gap is supposed to be closed step-by-step through iterative simulation runs.
Further information on the project ERAFlex: