Techno-economic and business case assessment of low carbon technologies in distributed multi-energy systems

Abstract

Increasing focus on energy affordability and environmental impact is drawing interest towards the potential value of low carbon technology (LCT) interventions in buildings and district energy systems. Relevant interventions may include improvements of the insulation levels and installation of low carbon and renewable generation technologies (e.g., combined heat and power, photovoltaics, heat pumps). These LCT interventions for both electricity and heat supply can, in principle, reduce energy costs and CO 2 emissions for final energy consumers. This can be achieved by coupling, and possibly optimising, multiple energy vectors from traditionally independent systems (e.g., electricity, heat and gas). However, this transition to distributed multi-energy systems introduces complex physical and commercial interactions between the different energy vectors. Further, these interactions can be fundamentally different at different aggregation levels (e.g., premises, district, and commercial level). This makes the assessment of business cases for LCT interventions in a multi-energy context a grand challenge, and given the potentially disruptive commercial impact of many such novel technologies, such complexity might result in a barrier to their development. In light of this, this paper proposes a techno-economic framework for the assessment of business cases of LCTs, which systematically models the physical and commercial multi-energy flows at the premises, grid connection point, and commercial levels. This is particularly important given the commonly asymmetrical nature of various energy price components, which can have significant effects on the business cases of LCTs and associated actors (e.g., retailers and energy service companies). The proposed framework is demonstrated through a series of case studies that highlight the value of various LCT interventions and of aggregation, in terms of energy, emission and operational cash flow metrics. The relevance and importance of the framework to developing business cases for various energy system actors, including policy makers and regulators, is discussed, with the final aim of facilitating the uptake of low carbon multi-energy technologies.

Techno-economic assessment of community energy solutions to network capacity issues

“…The formulation also allows modelling of solar PV generation and thermal and electrical energy storage. Following the approach used in [13], [14] the model aggregates location level profiles to GCP and then district/virtual power plant (VPP) levels.…”

“…Subsequently the district is increased to 50 dwellings, to simulate district growth, and adoption of solar PV is considered. Similarly to [14], an estimate of annual revenues is made by running the model for eight days: six days represent typical summer/shoulder/winter weekday/weekends, the seventh a "peak" summer (greatest amount of insolation) day, and the eighth a "peak" winter day (coldest day, without solar insolation). Below, the districts are described in detail, before the studied cases are introduced.…”

“…Following [14], energy prices are broken down as in Table 1. The GCP level includes transmission, distribution and jurisdictional use-of-system fees (TUoS, DUoS and JUoS).…”

“…Although capacity services are likely to be most valuable (compared to energy-based services), given that capacity constraints are only active for very limited periods each year, there is significant scope to employ flexibility cultivated primarily for avoidance of capacity expansion for other services, such as temporal arbitrage in multiple markets, or system reserve provision [10]- [13]. This can include arbitrage to reduce UoS fees given time varying UoS charges [14]. For accurate assessment of such business cases, uncertainty of electricity demand and generation determinants (insolation) should be considered.…”

“…For accurate assessment of such business cases, uncertainty of electricity demand and generation determinants (insolation) should be considered. Further, given diversity in demand, physical aggregation of locations within a district so that they share a common grid connection point (GCP), e.g., in microgrid-type arrangements, should be considered as the "smoother" profile of aggregated demand may result in substantial reduction in UoS charges [14] increase in selfconsumption of local generation.…”