eeh power systems laboratory u Raﬀael B¨hler Integration of Renewable Energy Sources Using Microgrids, Virtual Power Plants and the Energy Hub Approach Semester Thesis EEH – Power Systems Laboratory Swiss Federal Institute of Technology (ETH) Zurich o Expert: Prof. Dr. G¨ran Andersson Supervisors: e Florian Kienzle, Spyros Chatzivasileiadis, Dr. Thilo Krause, Mich`le Arnold Zurich, March 12, 2010 Abstract The amount of generation of renewable energy sources in the European grid has strongly increased. In 2005 eight times more energy was generated by RES compared to 1990. In the future the EU wants to promote the in- tegration of RES. Mainly the use of wind energy and biomass should be expanded. As to date, RES were connected to the distribution grid usually with a ”ﬁt and forget” approach. Due to the increasing number of RES better solutions to connect RES are searched. Therefore, virtual power plants, microgrids or energy hubs could be used. This thesis presents these three concepts and gives an overview of today’s applications. In the third chapter ten criteria were established to compare the three con- cepts. Thereby, it results that the concepts have diﬀerent key aspects and do not compete against each other. In the following chapter a SWOT analysis to each concept is done, to summarize the third chapter and emphasize the strengths and weaknesses of every concept. In the ﬁfth chapter attempts to combine the strengths of the concepts are developed. It results that the multi-energy carrier approach of the energy hub concept should be used to improve virtual power plants and microgrids. i Kurzfassung a Die im europ¨ischen Netz erzeugte Energie aus erneuerbaren Energiequellen (RES) hat stark zugenommen. Im Jahre 2005 wurde achtmal mehr Energie durch erneuerbare Quellen produziert als noch im Jahre 1990. In Zukunft o m¨chte die EU den Zuwachs von RES weiter vorantreiben. Dabei soll haupt- a s¨chlich die Nutzung von Windenergie und Biomasse erweitert werden. Bisher wurden RES oftmals nach dem Motto ”ﬁt and forget” im Verteilnetz angeschlossen. Auf Grund der steigenden Anzahl von RES werden heute o jedoch bessere Integrationswege gesucht. M¨glichkeiten dazu bieten die drei Konzepte: Virtual Power Plants, Microgrids und Energy Hubs. Die vor- a liegende Arbeit pr¨sentiert diese drei Konzepte und gibt einen Einblick wie sie aktuell verwendet werden. Im dritten Kapitel wurden zehn Kriterien aufgestellt, um an ihnen die drei Konzepte zu vergleichen. Dabei stellt sich heraus, dass die Konzepte un- terschiedliche Schwerpunkte haben und nicht miteinander konkurrenzieren. Im darauﬀolgenden Kapitel wird eine SWOT-Analyse zu jedem Konzept er- stellt, um die Ergebnisse aus dem dritten Kapitel zusammenzufassen und a a St¨rken sowie Schw¨chen aufzuzeigen. u a Im f¨nften Kapitel werden Ans¨tze entwickelt wie Virtual Power Plants, o Microgrids und Energy Hubs miteinander kombiniert werden k¨nnten, um a die St¨rken der Konzepte zu verbinden. Daraus resultiert, dass der Multi a Energietr¨ger Ansatz vom Energy Hub Konzept auf die beiden anderen Konzepte angewendet werden sollte, um durch die ganzheitliche Betrach- tung Virtual Power Plants und Microgrids zu verbessern. ii Contents List of Acronyms v 1 Introduction 1 1.1 Development of Renewable Energy Sources in the European Grid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 1.2 Integration of RES in the European Grid . . . . . . . . . . . 2 1.3 Objective of this thesis . . . . . . . . . . . . . . . . . . . . . . 3 2 VPPs, Microgrids and Energy Hubs 4 2.1 Virtual Power Plants . . . . . . . . . . . . . . . . . . . . . . . 4 2.1.1 Applications of the Virtual Power Plant Approach . . 5 2.2 Microgrids . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 2.2.1 Applications of Microgrids . . . . . . . . . . . . . . . . 7 2.3 Energy Hubs . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 2.3.1 Applications of the Energy Hub Approach . . . . . . . 9 3 Comparison Criteria 11 3.1 Electricity Market Participation . . . . . . . . . . . . . . . . . 12 3.2 Power System Stability . . . . . . . . . . . . . . . . . . . . . . 13 3.3 Reliability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 3.4 Additional Infrastructure Installations . . . . . . . . . . . . . 16 3.5 Dealing with the Limited Accuracy of Production Forecasts . 17 3.6 Demand Side Management and Plug-in Hybrids . . . . . . . . 18 3.7 Energy Eﬃciency . . . . . . . . . . . . . . . . . . . . . . . . . 20 3.8 Interaction of Diﬀerent Energy Carriers . . . . . . . . . . . . 21 3.9 Carbon Dioxide Emissions . . . . . . . . . . . . . . . . . . . . 22 3.10 Application Area . . . . . . . . . . . . . . . . . . . . . . . . . 23 3.11 Summarising Table . . . . . . . . . . . . . . . . . . . . . . . . 24 4 SWOT - Analysis 25 5 Discussion 28 5.1 Combinations of the Concepts . . . . . . . . . . . . . . . . . . 29 5.2 Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 iii CONTENTS iv Bibliography 32 List of Acronyms CHP Combined Heat and Power DER Distributed Energy Resources DG Distributed Generation EU European Union ICT Information and Communication Technology RES Renewable Energy Sources TSO Transmission System Operator VPP Virtual Power Plant WT Wind Turbines v Chapter 1 Introduction 1.1 Development of Renewable Energy Sources in the European Grid In ﬁgure 1.1 the development of renewable energy sources (RES) in the three sectors electricity production, transport and heating is demonstrated. It is obvious that diﬀerent trends exist in the three sectors. The highest increase is visible in the electricity production sector. This can be attributed to the Directive 2001/77/EC on renewable electricity . On the other two sectors no legally binding rules were established at EU level. Nevertheless, there is also noticeable progress attributed to the eﬀorts of a few committed Mem- ber States . This thesis deals mostly with the integration of renewable electricity production. In the following a closer look to this sector will be taken. Figure 1.1: The contribution of renewable energy (heat (RES-H), electricity (RES-E) and transport (RES-T)) 1990 - 2004 (Mtoe). Source: Renewable Energy Road Map 2007  1 CHAPTER 1. INTRODUCTION 2 Development of the New Renewable Electricity Generation in the EU The term ”new renewable” includes RES without hydro generation. If we look at the growth of these sources in ﬁgure 1.2, an eight times bigger amount results in 2005 compared with 1990. The biggest part of this increase can be attributed to wind generation followed by biomass. Figure 1.2: Non-hydro renewable electricity generation in EU-25 (1990- 2005). Source: Renewable Energy Road Map 2007  Scheduled Growth of Renewable Energy Production In Directive 2001/77/EC all member states deﬁned national targets for the proportional part of renewable electricity on the overall electricity consump- tion in their country. If these targets are reached, the proportional part of renewable electricity on the overall consumption in the EU will be 21% by 2010 . Furthermore, until 2020 it is planned to nearly triple the electricity output of RES compared to 2004 (compare ﬁgure 1.3). Thereby the biggest potential for growth is forecast to be wind energy, especially oﬀshore gen- eration. But also biomass should heavily increase, whereas the electricity generation of hydro units remains at nearly the same level. 1.2 Integration of RES in the European Grid In the previous section it was demonstrated that the amount of RES in electricity generation has strongly increased since 1990 and will grow further in the future. Thereby wind generation is meant to play the most important part. The accuracy of forecasts for wind speed is getting better and better but still uncertainties remain. The European transmission grid has to deal with large unscheduled variability in power generation. Furthermore, in the lowest distribution levels, small RES are connected. If a lot of them CHAPTER 1. INTRODUCTION 3 Figure 1.3: Renewable growth: Electricity projections by 2020. Source: Renewable Energy Road Map 2007  are connected in the same region, they could cause upstream energy ﬂows instead of the usual ﬂows from high to low voltage levels. As to date, small RES were connected usually with a ”ﬁt and forget” approach . Due to the increasing amount of produced energy they have to be better integrated into the system. 1.3 Objective of this thesis This thesis describes three concepts to improve the integration of RES in the grid: Virtual Power Plants, Microgrids and Energy Hubs. The diﬀer- ent integration aspects are emphasized. Furthermore, the three concepts are compared in diﬀerent criteria and a SWOT-analysis is done. Finally possibilities to combine the strengths of each concept are developed. Chapter 2 Virtual Power Plants, Microgrids and Energy Hubs In this chapter three concepts to integrate renewable energy sources (RES) into the energy network are presented. First of all virtual power plants (VPP) are described, followed by Microgrids and the energy hub approach. In every section the concepts are introduced, followed by short descriptions of current projects. 2.1 Virtual Power Plants The goal of VPPs is to allow DER to access the energy market. Due to the stochastic variations of produced energy in solar and wind power units, the risk for a single unit to participate in the energy market is very high. If the scheduled energy cannot be delivered, the producer has to buy expensive balancing energy. As the uncertainty is often too high, the unit does not participate in the energy market or participates only with small amount of its maximal capacity. Furthermore, the participation in forward or control energy markets is linked with even higher risks which makes a participation nearly impossible. Another problem is that DER are often too small to participate in the elec- tricity markets. The minimal trading volume of hourly contracts for power at the EEX1 spot market is 0.1 MW . To participate in the control energy market a minimal nominal power of 30 MW-50 MW is necessary . To deal with these circumstances, the VPP approach adds many DER in one cluster and connects them with an information network. This means that stochastic variations can be balanced between lots of single units. Therefore, the group of DER is comparable to a power plant connected to the transmission grid. Participation in the energy market will be facilitated. Figure 2.1 depicts a 1 European Energy Exchange 4 CHAPTER 2. VPPS, MICROGRIDS AND ENERGY HUBS 5 schematic composition of a VPP. In , p. 13 an illustrating example how the market access for a cluster of producers instead of a single producer is facilitated, is calculated. Figure 2.1: Schematic composition of a VPP. Diﬀerent types of RES, like a river power station, a wind turbine, a solar panel and a CHP unit, build a VPP. To balance the weather dependent power production ﬂexible loads (FL) and a battery are added. All units are connected with ICT. Thus, participation on electricity markets is in a similar way possible as for big power plants. 2.1.1 Applications of the Virtual Power Plant Approach Diﬀerent variations of VPP are projected. On the one hand there are groups of generation units which participate on the energy or control energy market. On the other hand ﬂexible loads which can sell saved energy are investigated. Control Energy VPP Since September 2003, EVONIK Power Saar GmbH has been operating a control energy VPP with a total capacity of 400 MW. Industrial and com- mercial power plants oﬀer tertiary control energy to the TSOs in Germany . CHAPTER 2. VPPS, MICROGRIDS AND ENERGY HUBS 6 Commercial VPP in Sauerland Siemens and RWE started the operation of a commercial VPP in Sauerland, North Rhine-Westphalia, on October 31, 2008. They linked nine hydroelec- tric facilities with a total capacity of 8600 kW together. In the near future, CHP units, biomass and wind power plants should be integrated as well . EU-Project Fenix On October 2005, a 4-year EU-project named FENIX (Flexible Electricity Networks to Integrate the eXpected energy evolution) started. New com- munication and control devices were developed to demonstrate the VPP approach. The goal of this project is to boost DER contribution on the European power system . Swarm-Energy Following the slogan: ”We will build Germanys biggest gas power plant”, the company Lichtblick wants to install 100’000 small2 CHP units in pri- vate households. All these units are wirelessly linked and controlled from a dispatch centre. The power production is driven from the heat demand of the households. To allow the operator enough ﬂexibility, a heat storage is implemented. Therefore, they can participate on the electricity market. Lichtblick expects a total capacity similar to two nuclear power plants . 2 20 kW electrical and ca. 35 kW thermal power CHAPTER 2. VPPS, MICROGRIDS AND ENERGY HUBS 7 2.2 Microgrids A microgrid is a cluster of local DER and loads in such a way that an oper- ation within the grid or in islanded mode is possible. Usually it is connected at the low voltage level but sometimes also at the medium voltage level. The connected microgrid appears as one node, generating or consuming power from the grid. To operate in an isolated mode, energy storage devices are of- ten necessary and the loads are diﬀerentiated in reliability classes. In ﬁgure 2.2 an example of a microgrid with diﬀerent generation units and storage de- vices is illustrated. In addition the loads are classiﬁed in diﬀerent reliability classes3 . Figure 2.2: Example of a microgrid with a load classiﬁcation into three reliability types. Source: http://certs.lbl.gov/certs-der.html. 2.2.1 Applications of Microgrids In the microgrid project of the EU, seven pilot microgrids are in operation . Diﬀerent RES like PV, wind and biomass power plants are integrated. But often also a diesel generator for electricity back-up is installed. As an EU project example, the microgrid on the Greek island Kythnos is presented. Furthermore the Aomori project in Hachinohe, Japan is mentioned. 3 Refer to 3.6 CHAPTER 2. VPPS, MICROGRIDS AND ENERGY HUBS 8 Pilot Microgrid in Kythnos On the Greek island of Kythnos a single phase microgrid is installed. 12 houses are supplied by 10 kWp of PV, a 53 kWh battery bank and a diesel generator with a nominal output of 5 kVA. In addition, the system house is supplied by 2 kWp PV and a 32 kWh battery bank. The diﬀerent units are connected over a communication cable and controlled from the system house. Probably a 2 to 3 kW wind turbine will be integrated in the near future to minimise the use of diesel fuel in islanded operation . The Aomori Project in Hachinohe In ﬁgure 2.3 an overview of the Hachinohe project is given. In this micro- grid only RES supply the total demand of around 610 kW. Thereof 150 kW are weather-dependent generation (PV and WT) and 510 kW are control- lable digester gas engines. Furthermore, a lead-acid battery system with a capacity of ±100 kW is installed . Figure 2.3: Overview of the Aomori microgrid project in Hachinohe, Japan . CHAPTER 2. VPPS, MICROGRIDS AND ENERGY HUBS 9 2.3 Energy Hubs An energy hub describes the relation between in- and outputs of energy ﬂows. In the hub multiple energy carriers like electricity, gas, heat, etc. can be converted, conditioned and if available also stored. Thereby, a hub can model a single building or a whole country. Figure 2.4 illustrates a hospital modelled as hub. Hubs can be connected in a network. Each hub is described with a coupling matrix which links the inputs and outputs of one unit. In this way the network is mathematically easy comprehensible and very adaptive for every possible combination. In ﬁgure 2.5 an example of a network with three energy hubs is presented. Due to the coupling of multiple energy carriers more degrees of freedom in the control are given and a holistic view on energy ﬂows is possible . Figure 2.4: The hospital of Baden modelled as energy hub. Electricity can be generated in the hospital with three diesel emergency generators. In addition, heat and district heating can be produced with fuel oil, diesel or natural gas . 2.3.1 Applications of the Energy Hub Approach The energy hub approach is used as a tool to analyse the actual energy system, to simulate diﬀerent scenarios for the future and to ﬁnd optimal solutions4 how the energy system in 30 to 50 years should look like. New challenges like plug-in hybrid electric vehicles and prospective generation and storage technologies are considered . Bern as Energy Hub In this case study, all generation and energy storage facilities of Bern are modelled as energy hubs which are connected to a network. Diﬀerent scenar- 4 Concerning reduction of emissions, investment planning or optimal power ﬂows in multiple energy carrier systems CHAPTER 2. VPPS, MICROGRIDS AND ENERGY HUBS 10 Figure 2.5: Example of a network of three energy hubs. They are connected with a district heating network. In addition, electricity and gas in- and outputs are presented . ios concerning emissions, new supply possibilities and costs are developed. The goal is to deﬁne a roadmap from today’s to a future energy system with low emissions. a D¨twil/Baden a In another case study, D¨twil in Baden is modelled with eleven hubs. Each of these hubs has a speciﬁc load proﬁle. Deﬁned as hubs are for example a residential area, a commercial area with a natural gas station and a hospital . The hospital modelled as energy hub is presented in ﬁgure 2.4. Chapter 3 Comparison Criteria In this chapter the three concepts of virtual power plants, microgrids and energy hubs are discussed on a selection of criteria. These criteria comprise important aspects in relation to the integration of RES in the European power system. At the end of the chapter a table summarises the importance of the criteria for the three concepts. 11 CHAPTER 3. COMPARISON CRITERIA 12 3.1 Electricity Market Participation Electricity market participation deals with the possibility of RES to par- ticipate in the diﬀerent electricity markets such as future, spot and control energy market. The goal is that market incentives help to balance price peaks. The main problems with the electricity market access for RES are the nominal power of small units and the stochastic variability of weather dependent entities. Virtual Power Plants Electricity market participation for any DER is the key aspect of the VPP approach. Dependent on the combination of generators, ﬂexible loads and storage devices, the participation in diﬀerent electricity markets is possible. The bigger the degree of freedom in regulating is, the more possibilities exist to participate in spot, future and control energy markets. At the moment it is not proﬁtable for small RES to participate in the market, because most of the countries in Europe have feed-in tariﬀs1 which are more attractive. But often these tariﬀs decrease yearly with a given percentage dependent on the technology . So, in the future the participation in the diﬀerent energy markets could be essential. One big advantage of a VPP is that the whole cluster can be managed by one broker or trader, reducing the market participation costs for a single unit signiﬁcantly. Microgrids Usually a single microgrid is too small to participate in electricity markets. Including a microgrid in a VPP or a network of many microgrids2 could allow the access to electricity markets. Energy Hubs In the energy hub approach market participation is not explicitly discussed. Probably an energy hub model could be used to maximise the proﬁt of a generator, so that a market access for this unit is more attractive. 1 Refer to EEG in Germany . 2 E.g. in a multiagent system . CHAPTER 3. COMPARISON CRITERIA 13 3.2 Power System Stability In  the stability of an electric power system is deﬁned as follows: ”Power system stability is the ability of an electric power system, for a given initial operating condition, to regain a state of oper- ating equilibrium after being subjected to a physical disturbance, with most system variables bounded so that practically the entire system remains intact.” Thereby three categories of stability are distinguished: 1. Rotor Angle Stability: Ability of synchronous machines to hold the electromagnetic torque and the mechanical torque in an equilibrium. 2. Frequency Stability: The equilibrium between generation and loads must be ensured. 3. Voltage Stability: Mainly depends on the balance of reactive power demand and supply. Virtual Power Plants The inﬂuence of VPPs on the power system stability depends mainly on the mix of the integrated units. Through the connection of voltage and frequency control power electronics, the system stability can be improved. A VPP which participates in the control energy market may contribute to improve stability. Otherwise, if a lot of DGs replace big generators, the power system inertia is decreased. Hence, the rotor angle stability is also decreased . Generally, system stability is rarely an issue in the VPP concept. Microgrids The inertia in a microgrid is very small. If there is a rotating generator in the system and there occurs an imbalance between the input mechanical torque and the output electromagnetic torque, a fast deceleration or acceleration of the rotor will occur3 . But in microgrids it is also possible that all generation units are connected with synchronised power electronic inverters. In this case the frequency is independent of rotating masses. Therefore the information and control system has to react quickly if an unbalance occurs in the system. If the power supply is too big, the batteries can be charged. Else if the power consumption is over the supply, shedable loads can be switched oﬀ to restore the power balance . Connecting or disconnecting of loads in isolated operation can be critical if they are big in relation to the installed generation capacity (see ﬁgure 3.1). 3 See swing equation CHAPTER 3. COMPARISON CRITERIA 14 Figure 3.1: Switching-on of a 37 kW air conditioner in an isolated microgrid at the Aomori project in Hachinohe . Energy Hubs In the energy hub approach power stability has not been discussed yet. But the stability of interacting multi energy carriers is an open topic to research. CHAPTER 3. COMPARISON CRITERIA 15 3.3 Reliability Reliability of electric power systems describes the probability of the system to supply the loads with a reasonable assurance of quality over a long time period. Thereby reliability is based on two aspects: adequacy and security. In  they are deﬁned as follows: • Adequacy: ”The ability of the power system to supply the aggregate electric power and energy requirements of the customer at all times, taking into account scheduled and unscheduled outages of system com- ponents.” • Security: ”The ability of the power system to withstand sudden distur- bances such as electric short circuits or not anticipated loss of system components.” Virtual Power Plants Through participation in the control energy markets VPPs can help to in- crease the reliability in the whole electric power system. But in a VPP there could be some critical units like ﬂexible generators or storage devices which balance the ﬂuctuations of non-dispatchable entities. If a fault occurs in a unit crucial for the power balancing probably other entities are inﬂuenced. Hence the security of the systems could be decreased. Microgrids In the microgrid approach reliability is a key issue. Due to the additional possibility of operating in an isolated way, a microgrid has an increased degree of reliability. Whenever a fault occurs in the connecting grid, the microgrid can decouple and hence stay in operation. This behaviour is important for critical units such as hospitals and data backup centres. To improve the security of a microgrid in islanded operation, redundancies for critical units like backup generators could be included. Energy Hubs The energy hub approach can be used to plan an electric power system with increased reliability. Including storage devices and the possibility to link diﬀerent energy carriers can increase the adequacy and hence the reliability . CHAPTER 3. COMPARISON CRITERIA 16 3.4 Additional Infrastructure Installations In this section it is discussed which necessary infrastructure has to be in- cluded in today’s system to implement one of the three approaches. Virtual Power Plants To build a VPP, ICT lines between the diﬀerent entities is necessary. Usually the VPP is controlled from a central unit. In addition a connection to the market over a broker or a trader access is necessary. Microgrids A microgrid is usually operated from a control centre, where the use of DG is optimised. The individual units and loads are connected with the control centre over ICT. In addition, to allow an islanded operation which is based mainly on DER, storage devices have to be included. Energy Hubs Due to the fact that the energy hub approach is a modelling and planning tool, a result of a simulation could be, that additional infrastructure should be integrated in the future. To do a simulation initial values are necessary. Thereby data from today’s infrastructure could be a good base. Hence some additional measuring units should be installed in the system, for example for measuring heat demand. CHAPTER 3. COMPARISON CRITERIA 17 3.5 Dealing with the Limited Accuracy of Produc- tion Forecasts Weather dependent generators like photovoltaic or wind turbines can only be forecasted with a limited accuracy. But the deviation of the forecasts can have a strong inﬂuence on power production. E.g. the relation between generated power in a wind turbine and the wind speed is cubic. Virtual Power Plants To balance the uncertainties of weather dependent RES in VPP, storage or enough ﬂexible load or generation capacity has to be included. Thereby it has to be more attractive for storage or ﬂexible units to participate in a VPP instead of a direct access at the control energy market. Two possibilities are imaginable: • Few big storage or ﬂexible units: The ﬁnancial incentives of the VPP have to be at least on the level of the control energy market. • A cluster of several smaller storage or ﬂexible load units: Due to the fact that a small unit does not have enough capacity to participate on the control energy market it could be interesting for several units to cooperate in a cluster. If their accumulated capacity is big enough for the access to the control energy market, again the VPP has to allocate at least the same incentive as the control energy market does. It remains the question if the price for energy in the VPP is competitive on the energy market. Whereas, the accuracy of the production forecast has a big inﬂuence on the production costs. Microgrids Microgrids in islanded operation must have enough storage capacity or some backup devices like fuel generators, to deal with the variability of weather dependent units. Furthermore, ﬂexible loads can balance a part of the vari- ability. Energy Hubs In simulations of energy hub models historical weather data can be fed in. This allows developing multiple scenarios whereby e.g. the required capacity of storage units can be developed . But uncertainties remain, because weather incidents can only be scheduled for the future. CHAPTER 3. COMPARISON CRITERIA 18 3.6 Demand Side Management and Plug-in Hy- brids Demand side management allows to control the loads by the system opera- tor. If not enough power is generated in the system, loads can be switched oﬀ. Another way is to manage loads in such a way that operation costs or emissions are minimised. Hence controlling on the generation and load side is possible. The mobile batteries of plug-in hybrids allow additional storage and control possibilities in the system. To allow an eﬀective use of the storage capacity and at the same time a comfortable operation for the drivers, demand side management is indispensable. Virtual Power Plants Demand side management can be an important aspect in VPPs. Flexible loads help to balance weather dependent generation in the VPP or the whole VPP is built only with demand side management and participates on the control energy market. Plug-in hybrids are not considered yet, but they could oﬀer with their batteries an additional support to balance weather dependent generation. Microgrids In islanded operation loads play an important role, as loads can be of the same scale as generation units4 . Therefore demand side management is important5 . Loads can be classiﬁed in diﬀerent reliability types like sensitive, adjustable and shedable. Sensitive loads have the highest importance and should always be supplied with power. Adjustable loads can be controlled in a given power interval and shedable loads can be disconnected if not enough power is generated at the moment. Refer to ﬁgure 2.2 for an example to this behaviour. So, ﬂexible or adjustable loads can help to balance weather dependent generation and hence reduce the necessary storage capacity. Plug- in hybrids are a good addition to increase storage capacity in the system, but are only rarely discussed yet. 4 E.g. residential air conditioning units have usually a capacity of 3 to 20 kW. Source: http://en.wikipedia.org/wiki/Air_conditioner. 5 As is usually the case in many microgrids, underfrequency relays disconnect the load in case of power shortage. As soon as the frequency reaches its nominal value again, automatic switches reconnect the loads with a random delay. The time delay helps so that the power consumption does not increase stepwise, thus not leading to undesirable transient eﬀects. CHAPTER 3. COMPARISON CRITERIA 19 Energy Hubs A paper about demand side management6 in the energy hub approach will be published soon. In this paper three examples are given how demand side management could be used to minimise the energy systems operation costs or the green house gas emissions. Plug-in hybrids have been modelled as hubs. Thereby aspects like driving with fuel or electricity, diﬀerent day schedules or grid ancillary services have been studied . 6 Written by Peter Ahcin. CHAPTER 3. COMPARISON CRITERIA 20 3.7 Energy Eﬃciency The World Energy Council deﬁnes energy eﬃciency as follows : ”En- ergy eﬃciency is ﬁrst of all a matter of individual behaviour and reﬂects the rationale of energy consumers. Avoiding unnecessary consumption of energy or choosing the most appropriate equipment to reduce the cost of the energy helps to decrease individual energy consumption without decreasing individual welfare.” Virtual Power Plants In VPPs economic eﬃciency is a more important aspect than energy eﬃ- ciency. Market incentives should help to balance price peaks, for example through load shifting from high price hours to lower price hours. Microgrids Energy eﬃciency is a key aspect for microgrids in islanded operation. Due to the limited generation capacity, an eﬃcient and economical handling with energy is necessary. The classiﬁcation of loads7 is one method to improve the energy eﬃciency. Furthermore, a simulation in Japan demonstrated that the total primary energy consumption can be lower when the microgrid reduces the amount of purchased energy from the grid . This can be explained with the use of CHP units and the elimination of transmission losses. Energy Hubs In the energy hub approach the eﬃcient use of energy is an important aspect. Due to the consideration of interaction between energy carriers, solutions with the lowest total energy consumption can be found. Thereby, the trade- oﬀ between cost minimisation and maximisation of energy eﬃciency has to be considered . 7 Refer to ﬁgure 2.2 CHAPTER 3. COMPARISON CRITERIA 21 3.8 Interaction of Diﬀerent Energy Carriers The view on interaction of diﬀerent energy carriers allows to optimise the total energy ﬂows in the system. Coupling of diﬀerent energy carriers in- creases the redundancy and can improve the eﬃciency if synergies can be used. Virtual Power Plants In a VPP the interaction of diﬀerent energy carriers is only rarely considered. CHP is an aspect8 , but other interactions are not considered. Microgrids In microgrids the view on interaction of diﬀerent energy carriers is limited to CHP. Sometimes inside energy ﬂows to generate electricity are also con- sidered9 . Energy Hubs In the energy hub approach the interaction of diﬀerent energy carriers is a key aspect. The more couplings that exist in a hub, the more control opportunities are possible and hence the reliability of electricity production in a hub increases. For example a hub with electricity and gas grid input, a wood ﬁring and a solar panel can allocate electricity at the output via the grid, the solar panel or by generating electricity with wood or gas ﬁring. If a fault occurs in the grid, the loads can be supplied with power from the wood and gas generators and the solar panel. Due to the diﬀerent sources the reliability of the electricity load supply is increased. But interaction of diﬀerent energy carriers is not only an aspect of reliability, but also of optimising the whole energy ﬂows in the system. For more information on this topic the reader can refer to  and . 8 Refer to 2.1.1 9 Wood-gas circuit to operate gas engines in the Aomori project. Refer to ﬁgure 2.3 CHAPTER 3. COMPARISON CRITERIA 22 3.9 Carbon Dioxide Emissions The question if the concept could be used to reduce the carbon dioxide emissions is an important aspect in the background of the climate change. It is important that the emitted CO2 in production and transport of new infrastructure which could be the result of the implementation of one of the concepts has to be taken into account for the ﬁnal CO2 balance too. Virtual Power Plants VPP can reduce CO2 emissions indirectly by producing electricity with RES. In addition CHP could also reduce the amount of emissions. But if in the VPP fossil generation units are integrated, the CO2 balance could get worse. A critical aspect concerning CO2 emissions could be, that the small units in a VPP do not have to buy CO2 certiﬁcates10 and hence are not subject to regulation11 . Microgrids In microgrids the CO2 emissions should be reduced, due to less wasted en- ergy e.g. with CHP . This leads to a lower total energy consumption and hence to lower emissions. But similar to the VPP approach integrated fossil ﬁred generators or gas turbines which worsen the CO2 balance have to be considered. A simulation example in Japan showed, that the CO2 balance under certain circumstances12 can be better when more electricity is purchased from the grid instead of generated in the microgrid . Energy Hubs The simulation with energy hubs can be done in a manner where CO2 emis- sions are minimised. Thereby often a trade-oﬀ between reduction of emis- sions and energy costs results. Refer to  for an example to this behaviour. However it is diﬃcult to have input data because measuring of CO2 emis- sions is not done in all parts of today’s infrastructure. For this reason, CO2 emissions dependent on the generation have to be modelled and this consequently leads to more uncertainties in the simulation. 10 Thermal power plants with a capacity bigger then 20 MW have to buy CO2 certiﬁcates in the EU. Refer to http://de.wikipedia.org/wiki/EU-Emissionshandel 11 But probably in the future a VPP has to buy certiﬁcates equal to its total capacity. 12 Refer to  CHAPTER 3. COMPARISON CRITERIA 23 3.10 Application Area The criterion application area describes the geographical size of the area on which one of the approaches could be implemented. Virtual Power Plants A VPP is imaginable in any size of area in a single country. If the VPP is located in diﬀerent countries, problems with cross-border capacities could occur. E.g. if the VPP has to balance unexpected power for one country in another country. For this reason a VPP should be located in a single country. Microgrids For reasons of reliability microgrids should be implemented in a small local area. The longer the line distances in the microgrid, the bigger is the prob- ability that a fault occurs inside the microgrid and islanding operation fails. On the other hand, in a microgrid with more units, the redundancy can be increased. Hence, in the design of a microgrid the application area and the number of involved units have to be optimised to increase reliability. Energy Hubs The application area of an energy hub is not limited. A single hub can con- tain one building like a hospital or whole countries. In addition networks are possible. Therefore the energy hub approach is a very ﬂexible and scalable tool, adaptable for every application area. CHAPTER 3. COMPARISON CRITERIA 24 3.11 Summarising Table In the following table all analysed criteria are evaluated with the importance for the three concepts. Three classes are given: 1. Key aspect: ! 2. Average importance: ∼ 3. Not considered: - VPP MG EH Electricity Market Participation ! ∼ ∼ Power System Stability ∼ ! ∼ Reliability ∼ ! ! Additional Infrastructure Installations ! ! ∼ Dealing with the Limited Accuracy of ! ! ∼ Production Forecasts Demand Side Management ∼ ! ∼ Plug-in Hybrids - ∼ ! Energy Eﬃciency - ! ! Interaction of Diﬀerent Energy Carriers - - ! Carbon Dioxide Emissions ∼ ∼ ∼ Table 3.1: Importance of the analysed criteria for Virtual Power Plants (VPP), Microgrids (MG) and Energy Hubs (EH). ’ !’ means important as- pect, ’∼’ medium important and ’-’ means not considered. Chapter 4 SWOT - Analysis To summarise the results of chapter 3 a SWOT1 -Analysis for every concept is presented. The diﬀerent aspects and characteristics of the three approaches are emphasised. Thereby a strength for every concept is that with the integration of RES more ”green” energy is included in the system. At the same time the threat exist that integration of RES could result in too high energy prices. VPP Strengths • Electricity market access for small units. • Participation in a VPP is independent of geographical distances. Weaknesses • Costs for controlling inside the VPP have to be cheaper than on the control energy market. • Technical realisation of the necessary ICT and the resulting energy price of a VPP are only rarely discussed yet. Opportunities • Market incentives improve the economically eﬃcient use of electricity in small units and probably balance expensive peak hours. • The potential of industries to participate on the control energy market could be capitalised. 1 Strengths, Weaknesses, Opportunities, Threats 25 CHAPTER 4. SWOT - ANALYSIS 26 Threats • Resulting price in the VPP could be too high → not competitive with big single units. • Feed-in tariﬀs could be more attractive than the participation in the VPP. Hence the VPP is strongly dependent on political or regulatory inﬂuences. Microgrid Strengths • Improved Reliability. • Finds ”the eﬃcient” local solution. • Strong social integration of energy production and distribution. Weaknesses • With increasing size it becomes more complex and the risk of internal faults increases. Opportunities • Improved electricity supply of islands and remote regions. • Standardised solution for emergency and back-up devices with inte- grated RES instead of fossil fuels. • Could help to improve the power supply in less developed countries . Threats • The reliability in the European power system is already quite good. The realisation of microgrids has to be motivated with integration of RES → probably the microgrid approach is too expensive compared with other possibilities. • In islanded operation, frequency problems can occur if big loads in relation to the system are connected or disconnected. CHAPTER 4. SWOT - ANALYSIS 27 Energy Hub Strengths • Very ﬂexible and scalable approach for the modelling of every new or existing technology. • Holistic view on the energy sector. Weaknesses • The energy hub approach has a more theoretical focus. It is a mod- elling and planning tool → realisation needs an additional eﬀort. • Input data can not be available in today’s system → missing measure- ment stations. Opportunities • View on multi-energy carriers could bring new scenarios and synergy beneﬁts. Threats • Computing time can be too big for complex problems → limitation on given scenarios. Chapter 5 Discussion In the ﬁrst part of this chapter a summarising overview of the results in the previous chapter is given. In the second part ideas are generated how the strengths of the three concepts could be combined to more powerful solutions. Finally a conclusion is presented. Virtual Power Plant To allow RES to participate in the energy market, a VPP has to deal with the limited accuracy of production forecasts. The big number of units at diﬀerent places balance uncertainties. In addition adjustable loads and gen- eration units or storage devices in the VPP are implemented. Therefore, ICT between the participating units is necessary. Apart from that, a VPP does not change today’s power system. If a VPP is located in diﬀerent countries, problems with the cross border capacity could result. Microgrid The key aspect of microgrids is to improve reliability and to allow a more eﬃcient use of energy. Thereby islanded operation must be possible. Fur- thermore the energy supply is done with RES mainly. To do this, ICT and storage units are necessary. In addition, demand side management helps to balance uncertainties in the electricity production of RES. Due to the small size of the installed generation capacity, stability e.g. during connecting or disconnecting of loads, is an diﬃcult task during isolated operation. Micro- grids allow an eﬃcient use of energy, but the resulting operation costs could yield problems. Energy Hub The energy hub approach is the only concept which explicitly considers the interaction of diﬀerent energy carriers. This allows a holistic view on energy 28 CHAPTER 5. DISCUSSION 29 ﬂows. Due to this aspect, new scenarios could be found. Probably a more eﬃcient use of energy carriers can be developed under consideration of fac- tors like CO2 emissions. Anyhow, the energy hub is in an early development status, hence the concept has to be veriﬁed in case studies. The energy hub approach is a very ﬂexible and scalable modelling, planning and analysing tool. However, to calculate complex problems without limitation on given scenarios, computing time could be a challenge. 5.1 Combinations of the Concepts VPP and Microgrids A microgrid can be seen as a single node in the grid. Thereby, consump- tion of power from the grid or reinjection is possible. If the microgrid is in islanded operation, the power balance at that node is zero. If many micro- grids are connected with ICT they can work as a VPP. Thereby the market access for the microgrids is possible. Through the eﬃcient use of energy and the big number of control possibilities in the microgrids, they could be a very valuable addition in a VPP. So, the microgrid could replace some controllable units and storage devices in the VPP. VPP and Energy Hubs The study of a VPP with the energy hub approach could lead to the devel- opment of new implementation possibilities. Probably the view on multi en- ergy carriers allows to increase the generation ﬂexibility and to decrease the storage capacity. These possible behaviours are exempliﬁed on the swarm- energy approach in section 2.1.1. 100’000 small CHP units will be installed in Germany. They are driven from the heat demand of the households, but have heat storages to allow a ﬂexi- ble operation. If they are modelled as a network of energy hubs the energy ﬂows could be studied in a holistic way. The electricity and gas network, but possibly also an additional district heating network could be considered. Thereby scenarios could result where the generation ﬂexibility is increased and storage capacity could be decreased. The district heating network could also be an addition to supply heat in ﬁnancially unattractive low-price hours. Hence, the energy hub approach could determine if the implementation of a district heating network is economically interesting. Microgrids and Energy Hubs Through the consideration of multi energy ﬂows the energy hub approach could be a helpful addition to improve the reliability and eﬃcient use of energy in a microgrid. In the energy hub approach both, the electricity and CHAPTER 5. DISCUSSION 30 the gas network, could be considered. With the coupling over CHP devices gas can be used to produce electricity. Hence, the reliability of electricity can be improved if the microgrid is in islanded operation. In addition, the total energy eﬃciency could be improved by the consideration of all energy ﬂows in the system. Particularly a heat network could also be considered. VPPs, Microgrids and Energy Hubs The combination of the strengths of all three approaches could be the best way to integrate RES. VPPs allow the participation in electricity markets. Microgrids can improve the reliability and lead to an eﬃcient energy use. The energy hub approach allows a holistic view on the energy ﬂows and hence can develop optimised scenarios of overall energy consumption. If the above example of the swarm-energy is extended with the microgrid ap- proach additional possibilities are possible. If nearby CHPs are connected in a microgrid, they could be used to allow new possibilities of energy sup- ply. Probably the emergency electricity supply of critical units like hospitals or data backup centres could be realised with a cluster of the CHP units organised as microgrid. In ﬁgure 5.1 the example of the CHP network with additional district heat connections is presented. The yellow square repre- sents the microgrid which supports the hospital with electricity back-up and heat. Figure 5.1: Network of CHP units. Due to the holistic view of the hub approach an additional district heat network could be useful. The consid- eration of a microgrid gives additional branches of business, like electricity backup and heat supply for a hospital. CHAPTER 5. DISCUSSION 31 5.2 Conclusion Regarding the integration of RES the three concepts follow diﬀerent ap- proaches, which do not compete against each other. The highest potentials for microgrids are on islands, remote regions, in places where high reliability is demanded, like hospitals, back-up centres or big commercial buildings and in countries without a meshed grid. VPPs can be used mainly to give ﬂexi- ble loads and small hydro power plants or maybe other DG units an energy market access. Weather dependent RES will probably not be competitive at the market yet. The integration of microgrids in a VPP is already an issue. Using the energy hub approach to improve VPPs or microgrids has not been considered yet. Thereby, the holistic view of the energy hub approach could be a beneﬁt for both, microgrids and VPPs or a combination of them. 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