3.3. Welfare calculations

HOURLY AVERAGE NORMALISED PROFILED THERMAL PRODUCTION OVER 33 CLIMATIC YEARS [FIGURE 6-13]

1/01 31/01 2/03 1/04 1/05 31/05 30/06 30/07 29/08 28/09 28/10 27/11 27/12

E.2.2.4. Hydroelectric power production

Three types of hydroelectric power production are taken into account: y pumped storage; y run-of-river; y inflow reservoir power production. The first two types of hydroelectric power production are present in Belgium, whilst the last type is more common in countries with more natural differences in elevation.

Pumped-storage power production functions by pumping water to higher reservoirs when electricity is cheap, and by turbining this water back to lower reservoirs when electricity is more expensive. An efficiency for the roundtrip process of 75% is taken into account in the modelling. Depending on the size of the pumped storage reservoirs as well as their operating mode, their dispatch can differ. The model differentiates between pumpedstorage production units which optimise their dispatch on a daily basis and those which optimise their dispatch on a weekly basis.

A more classic form of hydroelectric power production converts energy of a natural water flow into electricity. If a reservoir is present, the energy can be stored for a specific amount of time, allowing it to be dispatched at the economically best moment. These reservoirs are taken into account into the simulation model, together with their inflows. If no reservoir is present, the production type is called run-of-river, and no arbitrage can be effected when the power is injected into the grid. This type of hydroelectric power production is modelled through the use of profiles. E.2.3. ‘Monte Carlo’ sampling and composition of climatic years

The variables discussed in Section are combined so that the correlation between the various renewable energy sources (wind, solar, hydroelectric) and the temperature remains. Both geographical and time correlations are present.

Consequently, the climatic data relating to a given variable for a specific year will always be combined with data from the same climatic year for all other variables, with this applying to all countries involved.

In contrast, for power plant and HVDC link availability, random samples are taken by the model, by considering the parameters of probability and length of unavailability (in accordance with the ‘Monte Carlo’ method). This results in various time series for the availability of the thermal and HVDC links facilities for each country. Availability thus differs thus for each future state. Since each ‘Monte Carlo’ year carries the same weight in the assessment, the different availability samples have equal probability of occurrence.

Number of future states

The number of future states that need to be calculated by the model to ensure the convergence of the results depends, among other things, on the variables, the simulated perimeter and the variability of the generation facilities. This study focuses on the two indicators determined by law, namely the average LOLE and the 95th percentile for the LOLE (LOLE95). These two parameters must converge enough to ensure reliable results. Depending on the scenario and level of adequacy, lower or higher amount of ‘Monte Carlo’ years can be simulated.

Combining the results of all these future states yields the distribution of the number of hours of structural shortage.

E.3. Simulation of each ‘Monte Carlo’ year

To simulate the European electricity market, a number of assumptions and parameters must be established. These are detailed in Chapter 2, Sections 2.6.3, 2.6.4, 2.6.5 and 2.6.6 elaborate on the scenarios and assumptions for its neighbouring countries.

The key input data for each country are: y the hourly consumption profile and associated thermosensitivity; y the installed capacity of the thermal generation facilities and the availability parameters; y the installed PV, wind and hydroelectric capacity and associated hourly production profiles based on the climate years; y the interconnections (by using the Flow-based methodology or fixed exchange capacity between countries (NTC method)). These data are introduced by means of hourly or monthly time series or are established for a whole year.

A detailed modelling of the power plants’ economic dispatch is performed. The assessment takes into account the power plants’ marginal costs (see Figure 614) and also enables the pumped-storage power plants and hydroelectric reservoirs to be appropriately modelled (see Section ).

Economic availability depends on the generation capacity available for the hour in question. The price in any given hour is determined by the intersection between the curve for supply (called the ‘merit order’) and demand. Demand is considered inelastic in this context.

Furthermore in the adequacy assessment, the model also correctly considers that in periods of structural shortage, all of the available generation facilities will be taken into account, operating at their maximum capacity in order to minimise the shortage.

EXAMPLE OF AN ECONOMIC STACK FOR A GIVEN TIME AND A GIVEN PRODUCTION PARK [FIGURE 6-14]

100 Demand

90

Marginal cost [€/MWh] 80

70

60

50

40

30

20

10

0

0 1000 2000 3000 4000 5000 6000 7000 8000 9000 10000 11000 12000 13000 14000 15000 Installed capacity [MW] PV Wind Nuclear Coal Gas Peak units

The output of the model that is assessed in this the adequacy assessment consists of hourly time series showing the energy shortage for each country. These series can be used to deduce various indicators: y the number of hours of structural shortage; y the capacity surplus or shortage; y the number of activations of the strategic reserve; y Energy Not Served (ENS).

Other output data from the model are used to interpret the results: y the level of generation for each type of power plant in each country; y the commercial exchanges between countries; y the availability of the power plants.

A host of other indicators can also be calculated, such as: y the countries’ energy balance (exports/imports); y the use of commercial exchanges; y the number of operating hours and revenues of the power plants; y CO2 emissions; y the hourly marginal price for each country.