Economic Optimization of Electricity Supply Security in Light of the Interplay between TSO and DSO

FCN Working Paper No. 21/2016

49 Pages Posted: 2 Jun 2017

See all articles by Jacob Tran

Jacob Tran

RWTH Aachen University

Reinhard Madlener

RWTH Aachen University

Alexander Fuchs

ETH Zurich

Date Written: December 2016

Abstract

In this paper, the cooperation between Transmission System Operator (TSO) and Distribution System Operator (DSO) for power balancing of the transmission system is analyzed, whereby an exemplary grid situation is simulated. Based on the model, an optimization problem is formulated for the utilization of flexible demand and generation. The objective of this study is the economically optimal usage of flexibilities in consideration of the known grid constraints. For this purpose, two optimization problems are being presented: the optimal deployment of flexibilities for the support of redispatch measures and the optimal application of the available flexible units as secondary reserve product in the given ancillary services scheme. In order to discuss different grid types, technical changes, as well as market and price structures, the respective optimization parameters are being defined. For instance, regarding the availability of flexibility units, PV and load profiles need to be analyzed in greater detail. Furthermore, the price sensitive function is shown, revealing fixed flexibility prices and a variable price-demand diagram. Three scenarios are being analyzed, giving examples of typical developments of the communication infrastructure with regard to a stronger TSO and DSO cooperation. The results quantify the potential of flexibilities as redispatch support and secondary reserve product, applying the above mentioned different parameters. We find that using distributed flexibilities is economically not suitable for the application as redispatch support. However, due to the presently high remuneration in the secondary reserve market, the utilization of distributed flexibilities can significantly lower the costs of the TSO operation.

Keywords: flexibility, transmission system, TSO

JEL Classification: D40, Q41

Suggested Citation

Tran, Jacob and Madlener, Reinhard and Fuchs, Alexander, Economic Optimization of Electricity Supply Security in Light of the Interplay between TSO and DSO (December 2016). FCN Working Paper No. 21/2016. Available at SSRN: https://ssrn.com/abstract=2978541 or http://dx.doi.org/10.2139/ssrn.2978541

Jacob Tran (Contact Author)

RWTH Aachen University ( email )

Templergraben 55
52056 Aachen, 52056
Germany

HOME PAGE: http://www.rwth-aachen.de

Reinhard Madlener

RWTH Aachen University ( email )

School of Business and Economics / E.ON ERC
Mathieustraße 10
Aachen, 52074
Germany
+49 241 80 49 820 (Phone)
+49 241 80 49 829 (Fax)

HOME PAGE: http://www.eonerc.rwth-aachen.de/fcn

Alexander Fuchs

ETH Zurich ( email )

Rämistrasse 101
ZUE F7
Zürich, 8092
Switzerland

HOME PAGE: http://www.fen.ethz.ch/

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