Social Science
Quantifying reserve capabilities for designing flexible electricity markets: An Australian case study with increasing penetrations of renewables
Abhijith Prakash,
Abhijith Prakash
School of Electrical Engineering and Telecommunications, UNSW Sydney, 330 Anzac Pde., Kensington, Sydney, 2052, NSW, Australia
Rohan Ashby,
Rohan Ashby
School of Photovoltaic and Renewable Energy, UNSW Sydney, Tyree Energy Technologies Building, 229 Anzac Pde., Kensington, Sydney, 2052, NSW, Australia
Anna Bruce,
Anna Bruce
Collaboration on Energy and Environmental Markets, UNSW Sydney, Tyree Energy Technologies Building, 229 Anzac Pde., Kensington, Sydney, 2052, NSW, Australia
Iain MacGill
Iain MacGill
Collaboration on Energy and Environmental Markets, UNSW Sydney, Tyree Energy Technologies Building, 229 Anzac Pde., Kensington, Sydney, 2052, NSW, Australia
Peer Reviewed
Abstract
Across several power systems with market frameworks, policy-makers are proposing that balancing flexibility requirements emerging during energy transition be addressed through new reserve product markets. However, these may introduce additional costs, constraints and complexity, and even encroach upon the functions of existing operational practices. Thus, policy-makers need to assess and compare flexibility design options, and quantifying system flexibility capabilities based on current and expected resource mixes can assist in achieving this. In this article, we offer a practical method to quantify the time-varying spectrum of upwards and downwards flexibility capabilities in systems, and subsequently apply it to historical and projected resource mixes in two regions of the Australian National Electricity Market. Our results suggest that with higher penetrations of renewable energy: (1) downwards flexibility margins can be exhausted around noon if wind and solar are unable or unwilling to provide it, (2) upwards flexibility becomes more scarce during morning and evening peak demand events and (3) a greater portion of upwards flexibility is provided by energy-limited resources. Given these trends, we recommend that policy-makers examine how existing operational practices can be augmented to elicit upwards flexibility provision, and that duration specifications and sustained footroom procurement be considered for reserve products.
Key Questions
How does high renewable energy penetration affect power system flexibility?
The study finds that as the share of renewable energy increases, power systems face challenges in balancing supply and demand due to the variable nature of wind and solar power. Specifically, downward flexibility margins can be depleted around midday if renewable sources cannot or do not provide it, and upward flexibility becomes scarcer during morning and evening peak demand periods.
What are the implications of exhausted downward flexibility margins around noon?
When downward flexibility is exhausted, the system may struggle to reduce generation output to match lower demand, potentially leading to overgeneration issues. This situation underscores the need for mechanisms to curtail excess renewable generation or to increase demand during these periods.
Why does upward flexibility become scarce during peak demand times?
During morning and evening peaks, the demand for electricity rises rapidly, requiring quick ramp-up of generation. With a higher reliance on renewables, which are weather-dependent and less controllable, there is a reduced availability of dispatchable power sources to meet this surge in demand, leading to scarcity in upward flexibility.
What role do energy-limited resources play in providing upward flexibility?
The study indicates that a significant portion of upward flexibility is supplied by energy-limited resources, such as battery storage systems. While these resources can respond quickly to demand changes, their limited energy capacity means they can only provide support for short durations, highlighting the need for careful management and potential augmentation of storage capacities.
What recommendations does the study offer to policymakers regarding system flexibility?
The authors suggest that policymakers should explore enhancements to existing operational practices to encourage the provision of upward flexibility. This includes considering the duration requirements for reserve products and ensuring the procurement of sustained 'footroom'—the ability to decrease generation when necessary—to maintain system balance.
