Innovators and engineers Alternative carbon friendly energy sources AudienceDynamic Energy Systems Simulation

Innovators and engineers Alternative carbon friendly energy sources Audience

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Transforming the UK energy system to meet carbon reduction targets requires a whole systems approach.

This future energy system will require emerging innovations and solutions to be integrated and optimised across a range of previously separate systems including power, heat, transport, and across the physical, market and digital communications systems.

Driven by the decarbonisation, decentralisation, digitalisation, and democratisation of the energy system, current infrastructure, business models and market arrangements will need to adapt and evolve as new low carbon technology, smart devices, changes in value flow, and challenging shifts in supply and demand take hold.

To take the right path to this integrated and optimised future UK energy system, decisions will need to be made from a whole system perspective.

However currently this is challenging, because:· Established models and tools for

understanding the implications of new policies or technologies, for example, penetrations of low carbon generation, electric vehicles and smart appliances are not future proofed against more complex and disruptive whole system changes;

· There are no existing models and tools in the energy sector that can explore and evaluate the impacts of new market arrangements and business models interacting with the physical infrastructure through the exchange of data via digital solutions – particularly looking at possible future scenarios;

· Traditional trials to test new market structures are limited in their scope because they are only relevant for the location, time, people, market and policies in which the trial is situated.

A new decision-making tool is needed EnergyPath® Operations is a first-of-a-kind Whole Systems simulation tool developed by Energy Systems Catapult to analyse the behaviour of potential future energy system designs or architectures.

This enables assessments to be carried out on system design choices and technologies, business models and information technology solutions, enabling a quicker and cheaper process than real-world trials for understanding where design changes need to be made.

Introduction

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For example, EPO can assess the potentially significant effects on system outcomes from the presence or absence of a commercial relationship between actors. Some of the component models developed to date include: · generation and storage infrastructure

· gas and electrical networks

· houses and buildings with the occupants and appliances

· individual business models that can compete

· the markets that results from the policy and regulatory framework and the behaviour of actors within the system

· and the information flows between different assets and actors in the energy system.

These models interact in a closed loop, mimicking real-world behaviour where the decision of one actor or the condition of an asset can impact the energy system at different scales.

The EPO tool provides a way to evaluate the resulting demands on capacity of physical assets and information systems, as well as the profitability of business models and shared societal considerations such as carbon emissions and consumer well-being.

Representing this detail in a simulation environment allows us to develop rich insights into possible impacts of new market structures, policies and business models in different future scenarios. Unlike other energy system simulation tools, EnergyPath® Operations can explore both the macro and micro system impacts on operational timescales from the perspective of different actors in the energy system.

How does EnergyPath® Operations work?

Impacting the energy system

EPO is a simulation tool with a library of models developed to be connected in different combinations to assess how the integration of physical, business and data models can impact the energy system.

Unlike other energy system simulation tools, EnergyPath® Operations can explore both the macro and micro system impacts.

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Figure 1Energy usage per house (kWh)

Non-smart heating control With DSM

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Case study: Heat as a Service with Demand-Side ManagementWe carried out an EnergyPath® Operations simulation to understand whether a Heat as a Service (HaaS) business model that utilises demand-side management (DSM) is commercially viable in today’s market and the wider energy system implications of such a business model. The scenario considered was electrified air-source heat pumps, with customers billed through a heating service contract. The simulation looked at a portfolio of houses for a single Energy Service Provider (ESP) adopting the HaaS model. We maintained most aspects of today’s energy market, i.e. wholesale energy price values rest-of-market behaviour. However, in this simulation, TNUoS and DUoS charges were levied based on actual time of energy use, determined via smart metering.Under the HaaS contract the temperature and time of use were chosen by the customer. As long as the ESP satisfies these demands, they have the ability to adjust the turn-on time of the customers’ heating systems dynamically via DSM. As a result, the ESP frequently chooses to preheat the customers’ houses to avoid peak-time charges and then simply maintains the temperature during peak times. This minimises the overall cost of wholesale energy purchased on the day-ahead market, DUoS cost and TNUoS cost. The success of this HaaS-with-DSM scheme is dependent on the thermodynamics of

EnergyPath® Operations supports the Dynamic Energy System Architecting process – which works with industry players to co-develop the design requirements needed in a future energy system. EPO then simulates the chosen options to develop insights into the implications of those design decisions. Providing evidence for new market arrangements and business models with industry backing can help the Government to make decisions that will transform the energy sector.

Allowing users to explore new ways of manipulating aspects of the energy system in a broader, quicker, cheaper and safer way than through trials, is an important asset for promoting energy system transformation. One application of EPO is to help develop the scope and design of trials by assessing the different options available and short listing based on the wider energy system impact of the design at scale and in different future scenarios.

Trial data can be used to validate the models to provide confidence that their predictions are realistic. With this confidence the simulation can then be used to look beyond what you might carry-out in a trial, for example, the implications of the ideas if carried out at scale. In addition, this technique can also be used to explore fault conditions such as recovery from black-outs or cyber-attacks.

EnergyPath® Operations can help provide whole system insights into different architectures to achieve a sustainable energy system for the future.

Enabling industry to co-develop the future energy system

Figure 1: Energy usage per house for non-smart heating control and DSM, and potential savings if 50% of UK electricity consumers adopted DSM (assuming a representative house archetype).

Figure 2: Electricity consumption profiles with and without DSM, for a five-day period of the simulation.

System insights

the customers’ homes and variations in energy prices. Over the 6 months of the EPO simulation, the total cost to the ESP with DSM was £12 per house lower than where DSM was not used (£378 vs £390 per house respectively).However, the average energy consumed per household increased from 4740kWh to 4980kWh when DSM was enabled, confirming that this DSM scheme leads to greater energy usage since houses are kept warm for longer. The savings from using DSM represent a 3% reduction in the cost to supply energy – predominantly from reducing the time-of-use-dependent TNUoS and DUoS charges. Scaled up to a customer base comparable to Centrica’s domestic electricity supply business (6.1m customers in the year ending Dec 2017), this would equate to a saving of £73m (this simplified calculation neglects other effects of such a scale-up that were not simulated). Even though DUoS and TNUoS revenue for electricity network operators would decrease, there would be other benefits, such as a reduction in peak load reducing the need for network reinforcement.This case study shows how, with appropriate incentive structures, a self-interested actor (the ESP) can achieve wider system benefits (avoidance of network reinforcement) while safeguarding consumer interests - demonstrating the need to adopt a whole systems perspective when future energy system market arrangements are being considered.

Innovators and engineers Alternative carbon friendly energy sources Audience

© 2019 Energy Systems Catapult. Published April 2019

Unleashing innovation and opening new markets to capture the clean growth opportunity.

Get in touch with the Dynamic Energy System Architecting team to find out more about our whole energy system simulation tool desa@es.catapult.org.uk

Energy Systems Catapult was set up by Government to accelerate the transformation of the UK’s energy system and ensure UK businesses and consumers capture the opportunities of clean growth. The Catapult is an independent, not-for-profit centre of excellence that bridges the gap between industry, government, academia and research. We take a whole systems view of the energy sector, helping us to identify and address innovation priorities and market barriers, in order to decarbonise the energy system at the lowest cost.