Search

Europe is warming at the fastest rate of all continents, experiencing a temperature increase of about 1{\deg}C higher than the corresponding global increase. Aiming to be the first climate-neutral continent by 2050 under the European Green Deal, Europe requires an in-depth understanding of the potential energy transition pathways. In this paper, we develop four qualitative long-term scenarios covering the European energy landscape, considering key uncertainty pillars -- categorized under social, technological, economic, political, and geopolitical aspects. First, we place the scenarios in a three-dimensional space defined by Social dynamics, Innovation, and Geopolitical instabilities. These scenarios are brought to life by defining their narratives and focus areas according to their location in this three-dimensional space. The scenarios envision diverse futures and include distinct features. The EU Trinity scenario pictures how internal divisions among EU member states, in the context of global geopolitical instability, affect the EU climate targets. The REPowerEU++ scenario outlines the steps needed for a self-sufficient, independent European energy system by 2050. The Go RES scenario examines the feasibility of achieving carbon neutrality earlier than 2050 given favourable uncertain factors. The NECP Essentials scenario extends current national energy and climate plans until 2060 to assess their role in realizing climate neutrality. The scenarios are extended by incorporating policies and economic factors and detailed in a Qualitative to Quantitative (Q2Q) matrix, linking narratives to quantification. Finally, two scenarios are quantified to illustrate the quantification process. All the scenarios are in the process of being quantified and will be openly available and reusable.

In power markets, understanding the cost dynamics of electricity generation is crucial. The complexity of price formation in the power system arises from its diverse attributes, such as various generator types, each characterized by its specific fixed and variable costs as well as different lifetimes. In this paper, we adopt an approach that investigates both long-run marginal cost (LRMC) and short-run marginal cost (SRMC) in a perfect competition market. According to economic theory, marginal pricing serves as an effective method for determining the generation cost of electricity. This paper presents a capacity expansion model designed to evaluate the marginal cost of electricity generation, encompassing both long-term and short-term perspectives. Following a parametric analysis and the calculation of LRMCs, this study investigates the allocation of investment costs across various time periods and how these costs factor into the LRMC to ensure cost recovery. Additionally, an exploration of SRMCs reveals the conditions under which LRMCs and SRMCs converge or diverge. We observe that when there is a disparity between LRMC and SRMC, setting electricity generation prices equal to SRMCs does not ensure the complete recovery of investment and operational costs. This phenomenon holds implications for market reliability and challenges the pricing strategies that rely solely on SRMCs. Furthermore, our investigation highlighted the significance of addressing degeneracy in the power market modeling. Primal degeneracy in the SRMC model can result in multiple values for the dual variable representing SRMC. This multiplicity of values creates ambiguity regarding the precise SRMC value, making it challenging to ascertain the correct estimation. As a result, resolving degeneracy will ensure the reliability of the SRMC value, consequently enhancing the robustness and credibility of our analysis., Comment: 39 pages, 1 figure, 6 tables

Recent developments in decomposition methods for multi-stage stochastic programming with block separable recourse enable the solution to large-scale stochastic programs with multi-timescale uncertainty. Multi-timescale uncertainty is important in energy system planning problems. Therefore, the proposed algorithms were applied to energy system planning problems to demonstrate their performance. However, the impact of multi-timescale uncertainty on energy system planning is not sufficiently analysed. In this paper, we address this research gap by comprehensively modelling and analysing short-term and long-term uncertainty in energy system planning. We use the REORIENT model to conduct the analysis. We also propose a parallel stabilised Benders decomposition as an alternative solution method to existing methods. We analyse the multi-timescale uncertainty regarding stability, the value of the stochastic solution, the rolling horizon value of the stochastic solutions and the planning decisions. The results show that (1) including multi-timescale uncertainty yields an increase in the value of the stochastic solutions, (2) long-term uncertainty in the right-hand side parameters affects the solution structure more than cost coefficient uncertainty, (3) parallel stabilised Benders decomposition is up to 7.5 times faster than the serial version.

Hydrogen and carbon capture and storage are pivotal to decarbonize the European energy system in a broad range of pathway scenarios. Yet, their timely uptake in different sectors and distribution across countries are affected by supply options of renewable and fossil energy sources. Here, we analyze the decarbonization of the European energy system towards 2060, covering the power, heat, and industry sectors, and the change in use of hydrogen and carbon capture and storage in these sectors upon Europe's decoupling from Russian gas. The results indicate that the use of gas is significantly reduced in the power sector, instead being replaced by coal with carbon capture and storage, and with a further expansion of renewable generators. Coal coupled with carbon capture and storage is also used in the steel sector as an intermediary step when Russian gas is neglected, before being fully decarbonized with hydrogen. Hydrogen production mostly relies on natural gas with carbon capture and storage until natural gas is scarce and costly at which time green hydrogen production increases sharply. The disruption of Russian gas imports has significant consequences on the decarbonization pathways for Europe, with local energy sources and carbon capture and storage becoming even more important., Comment: 39 pages, 7 figures, submitted to the Journal of Cleaner Production

We propose the REORIENT (REnewable resOuRce Investment for the ENergy Transition) model for energy systems planning with the following novelties: (1) integrating capacity expansion, retrofit and abandonment planning, and (2) using multi-horizon stochastic mixed-integer linear programming with multi-timescale uncertainty. We apply the model to the European energy system considering: (a) investment in new hydrogen infrastructures, (b) capacity expansion of the European power system, (c) retrofitting oil and gas infrastructures in the North Sea region for hydrogen production and distribution, and abandoning existing infrastructures, and (d) long-term uncertainty in oil and gas prices and short-term uncertainty in time series parameters. We utilise the structure of multi-horizon stochastic programming and propose a stabilised adaptive Benders decomposition to solve the model efficiently. We first conduct a sensitivity analysis on retrofitting costs of oil and gas infrastructures. We then compare the REORIENT model with a conventional investment planning model regarding costs and investment decisions. Finally, the computational performance of the algorithm is presented. The results show that: (1) when the retrofitting cost is below 20% of the cost of building new ones, retrofitting is economical for most of the existing pipelines, (2) platform clusters keep producing oil due to the massive profit, and the clusters are abandoned in the last investment stage, (3) compared with a traditional investment planning model, the REORIENT model yields 24% lower investment cost in the North Sea region, and (4) the enhanced Benders algorithm is up to 6.8 times faster than the level method stabilised adaptive Benders.

Hydrogen will be a central cross-sectoral energy carrier in the decarbonization of the European energy system. This paper investigates how a large-scale deployment of green hydrogen production affects the investments in transmission and generation towards 2060, analyzes the North Sea area with the main offshore wind projects, and assesses the development of an offshore energy hub. Results indicate that the hydrogen deployment has a tremendous impact on the grid development in Europe and in the North Sea. Findings indicate that total power generation capacity increases around 50%. The offshore energy hub acts mainly as a power transmission asset, leads to a reduction in total generation capacity, and is central to unlock the offshore wind potential in the North Sea. The effect of hydrogen deployment on power prices is multifaceted. In regions where power prices have typically been lower than elsewhere in Europe, it is observed that hydrogen increases the power price considerably. However, as hydrogen flexibility relieves stress in high-demand periods for the grid, power prices decrease in average for some countries. This suggests that while the deployment of green hydrogen will lead to a significant increase in power demand, power prices will not necessarily experience a large increase., Comment: Submitted to Energy

Benders decomposition with adaptive oracles was proposed to solve large-scale optimisation problems with a column bounded block-diagonal structure, where subproblems differ on the right-hand side and cost coefficients. Adaptive Benders reduces computational effort significantly by iteratively building inexact cutting planes and valid upper and lower bounds. However, Adaptive Benders and standard Benders may suffer severe oscillation when solving a multi-region investment planning problem. Therefore, we propose stabilising Adaptive Benders with the level set method and adaptively selecting the subproblems to solve per iteration for more accurate information. Furthermore, we propose a dynamic level set method to improve the robustness of stabilised Adaptive Benders by adjusting the level set per iteration. We compare stabilised Adaptive Benders with the unstabilised versions of Adaptive Benders with one subproblem solved per iteration and standard Benders on a multi-region long-term power system investment planning problem with short-term and long-term uncertainty. The problem is formulated as multi-horizon stochastic programming. Four algorithms were implemented to solve linear programming with up to 1 billion variables and 4.5 billion constraints. The computational results show that: a) for a 1.00% convergence tolerance, the proposed stabilised method is up to 113.7 times faster than standard Benders and 2.14 times faster than unstabilised Adaptive Benders; b) for a 0.10% convergence tolerance, the proposed stabilised method is up to 45.5 times faster than standard Benders and unstabilised Adaptive Benders cannot solve the largest instance to convergence tolerance due to severe oscillation and c) dynamic level set method makes stabilisation more robust.

In transmission expansion planning, situations can arise in which an expansion plan that is optimal for the system as a whole is detrimental to a specific country in terms of its expected economic welfare. If this country is one of the countries hosting the planned capacity expansion, it has the power to veto the plan and thus, undermine the system-wide social optimum. To solve this issue, welfare compensation mechanisms may be constructed that compensate suffering countries and make them willing to participate in the expansion plan. In the literature, welfare compensation mechanisms have been developed that work in expectation. However, in a stochastic setting, even if the welfare effect after compensation is positive in expectation, countries might still be hesitant to accept the risk that the actual, realized welfare effect may be negative in some scenarios. In this paper we analyze welfare compensation mechanisms in a stochastic setting. We consider two existing mechanisms, lump-sum payments and purchase power agreements, and we develop two novel mechanisms, based on the flow through the new transmission line and its economic value. Using a case study of the Northern European power market, we investigate how well these mechanisms succeed in mitigating risk for the countries involved. Using a theoretically ideal model-based mechanism, we show that there is a significant potential for mitigating risk through welfare compensation mechanisms. Out of the four practical mechanisms we consider, our results indicate that a mechanism based on the economic value of the new transmission line is most promising., Comment: 18 pages, 10 figures

Clean, multi-carrier Offshore Energy Hubs (OEHs) may become pivotal for efficient offshore wind power generation and distribution. In addition, OEHs may provide decarbonised energy supply for maritime transport, oil and gas recovery, and offshore farming while also enabling conversion and temporary storage of liquefied decarbonised energy carriers for export. Here, we investigate the role of OEHs in the transition of the Norwegian continental shelf energy system towards zero-emission energy supply. We develop a mixed-integer linear programming model for investment planning and operational optimisation to achieve decarbonisation at minimum costs. We consider clean technologies, including offshore wind, offshore solar, OEHs and subsea cables. We conduct sensitivity analysis on CO$_2$ tax, CO$_2$ budget and the capacity of power from shore. The results show that (a) a hard carbon cap is necessary for stimulating a zero-emission offshore energy system; (b) offshore wind integration and power from shore can more than halve current emissions, but OEHs with storage are necessary for zero-emission production and (c) at certain CO$_2$ tax levels, the system with OEHs can potentially reduce CO$_2$ emissions by 50% and energy losses by 10%, compared to a system with only offshore renewables, gas turbines and power from shore.

The authors provide a comprehensive overview of flexibility characterization along the dimensions of time, spatiality, resource, and risk in power systems. These dimensions are discussed in relation to flexibility assets, products, and services, as well as new and existing flexibility market designs. The authors argue that flexibility should be evaluated based on the dimensions under discussion. Flexibility products and services can increase the efficiency of power systems and markets if flexibility assets and related services are taken into consideration and used along the time, geography, technology, and risk dimensions. Although it is possible to evaluate flexibility in existing market designs, a local flexibility market may be needed to exploit the value of the flexibility, depending on the dimensions of the flexibility products and services. To locate flexibility in power grids and prevent incorrect valuations, the authors also discuss TSO-DSO coordination along the four dimensions, and they present interrelations between flexibility dimensions, products, services, and related market designs for productive usage of flexible electricity., Comment: This paper was sent to the Renewable & Sustainable Energy Reviews at August 2021. It is currently under review