Integration of Electricity, Natural Gas and Heat Systems With Market-based Coordination.

Abstract

Higher shares of uncertain and variable renewable energy sources challenge the way energy systems are currently operated and increase the need for system-wide flexibility. Energy infrastructures are becoming more interdependent with growing physical, operational and economic interactions across multiple energy sectors. Increased couplings among power, natural gas and heat systems provide untapped sources of cross-carrier synergies, while uncertainty and variability of renewables will eventually affect the operation of all systems. In order to facilitate the transition towards a renewable-based energy system, revealing and exploiting potential flexibility from energy system integration is key. In this context, the objective of this thesis is to improve coordination of power, heat and natural gas systems with a particular attention to “market-based” coordination schemes by defining new market products and mechanisms. Enhanced coordination aims at unveiling potential synergies and harvesting flexible assets in a way that benefits the overall energy system. This work aims to quantify potential flexibility from multi-energy coordination and investigates how markets can facilitate the utilization of available synergies. The new concepts introduced in this thesis span different degrees of coordination for power, natural gas and heat systems and awareness of the uncertainty introduced by renewable energy sources such as wind power production. Full coordination schemes, which assume that energy systems are operated centrally, help to reveal and quantify the amount of available operational flexibility. Comprehensive models with accurate representation of energy flow dynamics and flexible assets, which link energy sectors together, are proposed to unlock the potential of energy storage from gas and heat grids to cope with uncertainty and variability. The propagation of uncertainty between sectors is studied and tools that reveal and harvest existing synergies are developed to mitigate this uncertainty. Policy-based reserves are introduced as new products for the coordinated response of flexible assets interfacing multiple sectors to uncertainty. Full coordination highlights the importance of proper modeling of complex multi-carrier flexibility in short-term operations, but is incompatible with current market designs. Soft coordination approaches, which respect the sequential order of energy markets, provide independent, yet coordinated frameworks for energy systems in view of uncertainty. Market-based mechanisms, that create soft links via increased information exchange and financial interactions, are proposed to support coordination in interdependent electricity and natural gas systems. These market-based mechanisms focus on increasing awareness among sectors and trading floors such that each sector dispatches flexible assets in a way that benefits the overall energy system. Specifically, financial instruments in the form of virtual bidders are introduced to improve the coordination between separate and sequential electricity and natural gas markets under uncertainty without the need for major updates of current market setups and rules. Finally, this thesis motivates more coordination of power, natural gas and heat systems and outlines future challenges from technical, computational and economic perspectives.