[Paper Review] The Value of Flexibility in a Carbon Neutral Power System

Elena Raycheva, Jared Garrison+2 more|arXiv (Cornell University)|Nov 24, 2022

Integrated Energy Systems Optimization4 citations

TL;DR

This paper proposes a centralized generation expansion planning model with hourly resolution to evaluate the value of flexibility in a carbon-neutral Swiss power system by integrating flexible generation, load shifting, and cross-border imports. Results show that combining gas turbines with load shifting minimizes system costs and reduces the need for renewable and conventional capacity investments, highlighting load management as a key enabler for cost-effective decarbonization.

ABSTRACT

In this paper, we use a formulation of the generation expansion planning problem with hourly temporal resolution, to investigate the impact of the availability of different sources of flexibility on a carbon-neutral central European power system (with a focus on Switzerland) for the year 2040. We assess the role of flexible generation, load shifting and imports on the investment and operation of existing and newly built units. Our results show that including load shifting as part of the optimization could reduce the need for investments in both RES and conventional technologies. The combination of newly built flexible generators (gas turbines) and load shifting increases the flexibility of the simulated power system and results in the overall lowest system costs. The reduction of cross-border transmission capacity between Switzerland and its neighbors has a significant impact on the domestic operation and investments but could also affect the surrounding countries.

Motivation & Objective

• To assess how different flexibility sources—flexible generation, load shifting, and imports—affect investment and operational decisions in a carbon-neutral power system.
• To investigate the impact of load shifting on reducing required investments in renewable and conventional generation capacities.
• To analyze the role of cross-border transmission capacity on domestic system operation and investment in Switzerland.
• To evaluate the sensitivity of investment decisions to rising gas prices under carbon neutrality targets.
• To identify the most cost-effective combination of flexibility resources for achieving a low-carbon power system by 2040.

Proposed method

• A centralized, deterministic, single-year generation expansion planning model with hourly temporal resolution is used to co-optimize investment and operational decisions.
• The model includes detailed representations of thermal units (with ramp limits), hydro power, battery storage, wind, solar PV, and flexible loads.
• Cross-border transmission constraints are modeled explicitly, with neighboring countries represented via aggregated generation portfolios and power flows.
• The optimization minimizes total system cost, including investment, variable operation, fuel, emissions, and load-shedding costs.
• Load shifting is modeled as a controllable power injection at specific nodes, with cost penalties for excessive or simultaneous up/down shifts.
• The model is implemented using the CentIv module within the Nexus-e platform, incorporating DC power flow constraints for transmission network representation.

Experimental results

Research questions

• RQ1 How does integrating load shifting into a generation expansion planning model affect the required investments in renewable and conventional generation technologies?
• RQ2 What is the combined impact of flexible gas turbines and load shifting on system cost and investment decisions in a carbon-neutral power system?
• RQ3 How does reduced cross-border transmission capacity influence domestic investment and operational decisions in Switzerland’s power system?
• RQ4 How sensitive are investment decisions to changes in gas prices under a carbon-neutral scenario for 2040?
• RQ5 What role do imports and exports play in shaping the flexibility and cost structure of the Swiss power system?

Key findings

• Including load shifting in the optimization reduces the need for investments in both renewable energy sources and conventional technologies, lowering overall system costs.
• The combination of newly built gas turbines (on synthetic gas or with CCS) and load shifting results in the lowest total system cost, representing the most cost-effective flexibility strategy.
• A 25% increase in gas prices leads to a 60% increase in PV capacity, indicating strong market responsiveness of solar deployment to fuel cost changes.
• Even with a 100% increase in gas prices, building gas units remains economically viable, underscoring the system’s persistent need for flexible generation.
• Reduced cross-border transmission capacity significantly increases load shedding and raises system costs, affecting both Switzerland and neighboring countries.
• Sensitivity analysis shows that gas turbine investments are sensitive to fuel prices, with a near tenfold reduction in capacity under extreme price increases.