Scandinavian Working Papers in Economics
Working Papers,
Copenhagen Business School, Department of Economics
No 8-2024: Network Operation and Constraints and the Path to Net Zero
Daniel Davi-Arderius (), Tooraj Jamasb () and Juan Rosellon ()
Additional contact information
Daniel Davi-Arderius: University of Barcelona and Chair of Energy Sustainability, Barcelona Institute of Economics (IEB), Spain. Copenhagen School of Energy Infrastructure (CSEI), Copenhagen Business School, Denmark
Tooraj Jamasb: Department of Economics, Copenhagen Business School, Postal: Copenhagen Business School, Department of Economics, Porcelaenshaven 16 A. 1. floor, DK-2000 Frederiksberg, Denmark
Juan Rosellon: Centro de Investigación y Docencia Económicas, German Institute for Economic Research (DIW Berlin), Center for Energy Studies, Rice University, and Chair of Energy Sustainability, Barcelona Institute of Economics (IEB), Spain
Abstract: Operating a reliable power system requires respecting strict safety and security criteria such as avoiding grid congestion, minimum levels of inertia, maintaining voltage levels, and having minimum adequacy reserves. However, large scale integration of intermittent renewables is transforming grid operation by creating new operational challenges. When operational security criteria are not met in parts of the network, system operators use ancillary services (redispatching) to activate or curtail specific generation units to manage the flows. In Spain, the volumes and costs of redispatching have multiplied by two and nine times between 2019 and 2023, respectively. In 2023, volumes peaked at 16.5TWh and the costs to 2.1b€. A similar picture is emerging in other countries. We investigate the determinants of network constraints associated with redispatched volumes after the day-ahead and intraday markets. To our knowledge, this is the first study to examine this topic in detail at national level. We use the seasonal autoregressive ARIMA time-series estimator method with hourly operational and market data (2019-2023). We find that actions to alleviate network congestion represent one-third of the redispatched volumes, though increasing every year. After day-ahead markets, most redispatched volumes are aimed at voltage problems, which aggravates when demand decreases, or generation from wind and photovoltaics (power electronics generation) increases. After intraday-markets, two thirds of the redispatched volumes were related to insufficient adequacy reserves, which calls for backup fossil fuel plants. We provide operational and regulatory recommendations aimed at minimizing volumes of these network constraints and the need for corrective actions.
Keywords: Network operation; Renewable integration; Redispatching; Synchronous generation; Power electronics; Network congestion; Voltage issues; Reliability criteria
Language: English
63 pages, April 1, 2024
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