Economic Indicators for Transmission System
Expansion in Europe
Thilo Krause, Spyros Chatzivasileiadis, Göran Andersson
(EEH – Power Systems Laboratory, ETH Zürich)
Objective of the Research Work
§  Show where to invest in the European transmission
system.
§  Compare different technological investment options:
§
§
§
§
«Conventional line upgrades»
Ultra-High-Voltage (UHV) transmission lines
Flexible AC Transmission Systems «FACTS»
High Voltage Direct Current (HVDC) solutions
§  Compare different investment decision criteria
(technical / economic).
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Researchers Involved
§  Spyros Chatzivasileiadis
spyros@eeh.ee.ethz.ch
§  Thilo Krause
krause@eeh.ee.ethz.ch
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Acknowledgement
The research described in this paper has been carried out
within the scope of the project “Infrastructure Roadmap for
Energy Networks in Europe (IRENE-40)”, supported under the
7th Framework Programme of the European Union, grant
agreement 218903.
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Agenda
§  Objective and Introduction
§  Motivation and Background of the Problem (Challenges)
§  Modelling Frameworks, Case Studies and Conclusions
§  Cost of Operation and Cost of Security as investment criterion
§  Mitigation of market power as investment criterion
§  Overall Conclusion
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Current Challenges for the European Transmission
Grid – I (not exhaustive)
§  Aging transmission infrastructure
§  Lions share of investments made in the 1970s and 1980s
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Current Challenges for the European Transmission
Grid – II (not exhaustive)
§  Increasing share of infeed from fluctuating renewable
sources (RES)
Wind Power Deployment
Curtailed RES Energy
(in % of total available RES
Energy)
Source: Andreas Ulbig
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PV Power Deployment
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Current Challenges for the European Transmission
Grid – III (not exhaustive)
§  Massive cross-border
flows triggered (among
other reasons) by
electricity trade.
Source: ENTSO-E
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A Definite Need for Network Investments
§  Where to invest?
§  What technologies to use?
§  For what reason?
§  But: a number of complications exist
§  Different investment options (technologies)
§  Uncertainty regarding future developments
§  Different investment criteria
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Different Investment Options (Technologies)
§  «Conventional» High Voltage AC Transmission (HVAC)
§  Long AC-400 kV/3000 MVA with series compensation
Source: Axpo AG.
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Different Investment Options (Technologies)
§  Ultra-High-Voltage (UHV)
AC Transmission
§  UHVAC: Long AC-750 kV/
3900 MVA with series
compensation
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Different Investment Options (Technologies)
§  Flexible AC Transmission Systems (FACTS)
§  Thyristor-Controlled-Series-Compensators (TCSC)
§  A means to «control» power flow to optimise network
utilisation (among other functionality)
§  No «real» capacity expansion, but can have a similar effect
through more efficient network utilisation.
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Different Investment Options (Technologies)
§  Voltage-Source-Converter High Voltage Direct Current
Transmission => VSC-HVDC
§  VSC-HVDC lines 3000 MVA (not available at the moment)
Source: ABB (2x)
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Load Flow Control with HVDC (Beware! Very
schematic!)
§  Conventional AC
§  AC + HVDC
+1 MW
+1 MW
~
~
«HVDC»
2/3
1/3
-1 MW
-1 MW
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Different Scenarios
Compiled by the Energy Center of the Netherlands
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Different Investment Criteria
Source: European Commission
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Objective of our Research Work
§  Build models to answer the following questions:
§  Where to invest?
§  What technologies to use?
§  For what reason?
§  Use a scenario-based approach to come to robust
decisions.
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Modeling Framework (in brief)
§  Model based on an Optimal Power Flow (OPF) and a
Security-Constrained Optimal Power Flow (SC-OPF)
§  Find a generation dispatch that:
§  maximises social welfare
§  while satisfying network constraints
§  ensuring an N-1 secure system (SC-OPF)
§  We «mimick» network and market operations.
§  (A rather unhandy optimisation problem.)
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Three Technological Expansion Options
§  HVAC: Long AC-400 kV/3000 MVA with series
compensation
§  UHVAC: Long AC-750 kV/3900 MVA with series
compensation
§  VSC-HVDC lines 3000 MVA
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Before we start… two preliminary findings
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Overlay networks are preferable
§  Less line-kilometers achieve the same effect compared
with internal reinforcements
Assumption: intra-country grid is more meshed than cross-border lines
Country A
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Country B
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More does not necessarily help more!
§  Findings for overlay networks:
§  If we add one cross-border AC-400 kV line, the NTC
cannot increase more than twice (upper bound)
§  For one cross-border AC-750 kV, the upper bound is
2.6*NTC (usually the real value is much below the upper bound)
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More does not necessarily help more!
120% Maximum U/liza/on of New Lines for Different AC-­‐400 kV Expansion Op/ons AC-­‐750 kV HVDC Line Loading 100% 80% 60% 40% 20% 0% AT-­‐DE AT-­‐HU FR-­‐ES FR-­‐CH DE-­‐NL DE-­‐PL DE-­‐CH IT-­‐SI RO-­‐RS Tuesday, 23. October 12
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More does not necessarily help more!
120% Line Loading 100% 80% 60% Maximum U/liza/on of New Lines for Different AC-­‐400 kV Expansion Op/ons do s
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AC-­‐750 kV HVDC 40% 20% 0% AT-­‐DE AT-­‐HU FR-­‐ES FR-­‐CH DE-­‐NL DE-­‐PL DE-­‐CH IT-­‐SI RO-­‐RS Tuesday, 23. October 12
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Where to invest?
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Duration of Line Loadings
4000 hours
Examples of Lines loaded
99%-100% for more than
4000 hours
100% loading
of a line,
means 100%
of NTC (not of
thermal or
other limit)
Hours per Year
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Shadow Prices for determining investment locations
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Where to invest?
§  Additional Lines identified
as necessary in almost all
scenarios (in red colour)
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What technology to use?
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What technology to use – Cost of Operation
HVAC-400kV
UHVAC-750kV
HVDC
10 AC lines + 9 submarine HVDCs
10 AC lines + 9 submarine HVDCs
19 HVDC lines
Cost = 95.29 billion Euros
Cost = 94.01 billion Euros
Cost = 88.74 billion Euros
Reduction= 10.3%
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Reduction= 11.5%
Thilo Krause, EEH - Power Systems Laboratory
Reduction= 16.5%
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Cost of Operation
§  HVDC expansion leads to the lowest Cost of Operation
Annual Total Genera/on Costs (OPF) Billions of Euros 250 200 Base Scenario 150 AC 400 kV 100 AC 750 kV 50 HVDC 0 BAU CCS DES EFF RES 2050 2050 2050 2050 2050 Tuesday, 23. October 12
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Cost of Security
§  HVDC expansion leads to the lowest Cost of Security for
most scenarios (~1-2 billion Euros/year less than AC)
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Cost of Security (cont.)
CCS2050: All expansions with the
same number of contingencies
contingencies in the SC-OPF
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Investment for what reason?
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Warning
§  You are leaving the perfectly competitive world!
Power Systems Laboratory
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What did we do?
§  Built an agent-based simulator of an electricity market
considering strategic behavior of generators
§  Included functionality to study network investments
(«Conventional line» upgrade vs. Flexible AC Transmission
Systems «FACTS»)
§  Objective: Study the coupling of network investments and
market power
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Case Study Two-Node System
§  Show how congestion, and in turn, network investments
(only line upgrades for this case) influence social welfare.
§  Show how strategic behavior influences the congestion
rent.
§  Show how network investments limit the negative effects of
market power.
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Welfare Effect of Congestion and Invesmtents
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Effect of Strategic Behavior on Congestion Cost
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Effect of Network Investments on Market Power
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Case Study Italy, France, Switzerland
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Optimal Investment Location
Optimal
Location for a
Line Upgrade
Optimal
Location for a
FACTS
(TCSC)
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Strategic Behavior and System Limits
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Conclusion – Investing for what reason?
§  Transmission investments counter effects of market power.
§  Congestion removal and mitigation of market power are
complementary objectives.
§  It is possible that the optimal investment location does not coincide with
the congested line. => European Dimension of Network Investments
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Conclusion – Where to invest?
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Conclusion – What technology to choose?
§  An VSC-HVDC overlay network is our preferred choice from a
European perspective.
§  (We do not advocate HVDC as solution for all investment problems.)
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Thank you very much for your attention!
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