Flexibility from local resources: Congestion management in distribution grids, carbon emission reductions, and frequency containment reserves

Doctoral thesis, 2024

Flexibility from resources within local energy systems has been discussed as a facilitator for the transition towards a carbon-neutral energy system. This thesis aims to elucidate three local flexibility usecases that contribute to harnessing local flexibility through effective incentive mechanisms and operation planning.

The first usecase is on congestion management in distribution grids, studying the challenges, design, and evaluation of local flexibility markets (LFMs). Methods include literature review, field studies, scenario planning, and simulation experiments. Five design challenges are identified: low market liquidity, reliability concerns, baselines, forecast errors at low aggregation levels, and high submeter measurement costs. An LFM design with a triple-market structure (long-term availability, day-ahead, and adjustment markets) is proposed to support decision-making and improve market reliability and liquidity. Adapted capacity-limitation products based on net-load and subscribed connection capacity of end-users are suggested. These products can reduce conflicts of interest, administrative costs, and submeter measurement costs. Probabilistic approaches are suggested for calculating the cost and value of the products, reducing the potential cost of forecast errors for market participants. A comparison toolbox for congestion management solutions is developed, offering researchers and distribution system operators (DSO) a qualitative comparison framework and a reusable modeling platform for quantitative comparison.

The second usecase is on reducing carbon emission footprint from local energy systems. A multi-objective optimization model is provided for identifying CO2 emission abatement strategies and their cost using Chalmers Campus local multi-energy system as a case study. The results show that the carbon emission footprint of the local system could be reduced by 20.8% with a 2.2% increase in the cost over a year. Operation strategies for this purpose include the increase in the use of biomass boilers in heat production, the substitution of district heating and absorption chillers with heat pumps, and increased storage utilization. The cost of the strategies ranged from 36.6--100.2 (€/tCO2).

The third usecase focuses on the operation planning of a battery energy storage (BES) participating in Sweden’s day-ahead (DA) electricity and frequency containment reserve (FCR) markets. Maximum potential profit, battery aging, and operation strategies are presented using a mixed-integer linear formulation that considers a detailed calendar and cycle aging for the battery while taking into account market technical requirements. Considering degradation in the optimization problem, a 1MW/1MWh BES in 2022 could gain a maximum potential profit of k€ 708 by stacking revenue in the DA and FCR markets while undergoing an expected aging of 1.7% in battery capacity. Analyzing the impact of considering degradation in the optimization problem has shown that the annual battery aging cost could decrease by 5%-29% without a significant impact on profit.

The results of this thesis benefit system operators, flexibility asset owners, policy makers, and researchers involved with local flexibility. It offers insights into the challenges and proposes solutions and algorithms for these usecases.