Planning low-carbon electricity systems under uncertainty considering operational flexibility and smart grid technologies

Abstract

Electricity grid operators and planners need to deal with both the rapidly increasing integration of renewables and an unprecedented level of uncertainty that originates from unknown generation outputs, changing commercial and regulatory frameworks aimed to foster low-carbon technologies, the evolving availability of market information on feasibility and costs of various technologies, etc. In this context, there is a significant risk of locking-in to inefficient investment planning solutions determined by current deterministic engineering practices that neither capture uncertainty nor represent the actual operation of the planned infrastructure under high penetration of renewables. We therefore present an alternative optimization framework to plan electricity grids that deals with uncertain scenarios and represents increased operational details. The presented framework is able to model the effects of an array of flexible, smart grid technologies that can efficiently displace the need for conventional solutions. We then argue, and demonstrate via the proposed framework and an illustrative example, that proper modelling of uncertainty and operational constraints in planning is key to valuing operationally flexible solutions leading to optimal investment in a smart grid context. Finally, we review the most used practices in power system planning under uncertainty, highlight the challenges of incorporating operational aspects and advocate the need for new and computationally effective optimization tools to properly value the benefits of flexible, smart grid solutions in planning. Such tools are essential to accelerate the development of a low-carbon energy system and investment in the most appropriate portfolio of renewable energy sources and complementary enabling smart technologies. This article is part of the themed issue ‘Energy management: flexibility, risk and optimization’.