Strategies against shocks in power systems – An analysis for the case of Europe
Eva Schmid (),
Michael Pahle and
Energy Economics, 2016, vol. 59, issue C, 455-465
Electricity systems are constantly exposed to geopolitical, techno-economic and natural uncertainties that may endanger security of supply. Therefore, it is crucial that policy makers concerned about it consider a variety of possible futures — and not only the one that is perceived as the most likely. In particular, they should account for the possibility of sudden shocks in their decisions with the goal of making the system more “robust”. However, long-term power system models which are an important pillar of policy decision making are typically designed to determine the cost-minimal power system for a specific expected future; such a system is not necessarily the most robust one. By combining the classic investment optimization approach with the tools of Robust Decision Making we analyze the viability of different strategies that may potentially increase the robustness of a power system. For the case of the European power system we pursue a dedicated analysis with the European power system model LIMES-EU. Based on a total of more than 40,000 model runs, we find that strategies promoting the ability of countries to always produce at least 95% of their electricity demand domestically significantly help to reduce the loss of load in case of shocks. Such a strategy is not cost-optimal for the expected future without shocks; but the additional costs (about 0.1% of total system costs) are low compared to the benefits of significantly increasing the power system's robustness.
Keywords: European power system; Energy security; Investment optimization; Robust Decision Making (search for similar items in EconPapers)
JEL-codes: Q41 Q48 C61 D81 (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:eneeco:v:59:y:2016:i:c:p:455-465
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