Energy Systems Engineering, Economics, Modeling & Policy

The Market Participation of Variable Renewable Energy (VRE) Technologies and Flexible Natural Gas in Electric Power Systems

Increasing share of power generation from solar and wind generation technologies often referred to as variable renewable energy (VRE) poses significant complications to the design, operation, business model, and regulation of electric power systems. Key among these challenges is the negative impacts of increasing levels of grid variability and uncertainty introduced by VRE expansion on grid performance. This research thrust investigates the impacts of VRE expansion and offers technical, market and policy solutions to reduce and manage generation variability and uncertainty. Using  statistical regression analysis, this thrust assesses if increased use of flexible generators, such as modern gas turbines and combined cycles, results in reduced VRE capacity, and if the growth of these flexible electricity generation systems is correlated with increased non-fossil renewable fuels demand. Examples of econometric and statistical methods applied include System Generalized Method of Moments (System GMM) estimation of the dynamic relationship between variables. For instance, System GMM has been used to analyze the effect of natural gas on renewable energy diffusion and the ratio of fossil fuels increase to policy-driven solar demand for the ten states with the fastest growth in solar generation capacity in the U.S. (e.g., California, North Carolina, Arizona, Nevada, New Jersey, Utah, Massachusetts, Georgia, Texas, and New York).

Secondly, this research thrust studies the major drivers of energy transition, especially the change in electric power systems, including growth in distributed energy generation (DERs) systems such as intermittent renewable electricity and gas-fired distributed generation; flat to declining electricity demand growth; aging electricity infrastructure and investment gaps; proliferation of affordable information and communications technologies (e.g., advanced meters or interval meters), increasing innovations in data and system optimization; and greater customer engagement. In this ongoing electric power sector transformation, natural gas and fast-flexing renewable resources (mostly solar and wind energy) complement each other in several sectors of the economy. This thrust explores a plausible distributed utility framework that is suitable for DERs development and informed by “Utility 2.0” concepts: microgrid development, automated, distributed solar, electric market design innovations, smart grid systems, and big data and analytics. The examples being studied include case studies from United States (i.e., New York’s Reforming the Energy Vision (REV), Illinois’s NextGrid and California’s Energy Savings and Performance Incentive), the U.K.’s RIIO (Revenue = Incentives + Innovation + Outputs), Germany’s Energiewende, and Australia’s Electricity Network Transformation Roadmap. These frameworks provide conceptual bases with which to imagine the electric power industry of the future as well as a practical solution to study the potential and future of DERs in other states.

Selected Relevant Research Outputs

    • Working Paper: Brocks, A., Nyangon, J., & Taminiau, J. (2016). Utility 2.0: A Multi-Dimensional Review of New York’s Reforming the Energy Vision (REV) and Great Britain’s RIIO Utility Business Models. [SSRN Electronic Journal version][ResearchGate version].

 

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