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eeh

power systems laboratory

Raael Bhler u

Integration of Renewable Energy Sources Using Microgrids, Virtual Power Plants and the Energy Hub Approach
Semester Thesis

EEH Power Systems Laboratory Swiss Federal Institute of Technology (ETH) Zurich Expert: Prof. Dr. Gran Andersson o Supervisors: Florian Kienzle, Spyros Chatzivasileiadis, Dr. Thilo Krause, Mich`le e Arnold Zurich, March 12, 2010

Abstract
The amount of generation of renewable energy sources in the European grid has strongly increased. In 2005 eight times more energy was generated by RES compared to 1990. In the future the EU wants to promote the integration of RES. Mainly the use of wind energy and biomass should be expanded. As to date, RES were connected to the distribution grid usually with a t and forget approach. Due to the increasing number of RES better solutions to connect RES are searched. Therefore, virtual power plants, microgrids or energy hubs could be used. This thesis presents these three concepts and gives an overview of todays applications. In the third chapter ten criteria were established to compare the three concepts. Thereby, it results that the concepts have dierent key aspects and do not compete against each other. In the following chapter a SWOT analysis to each concept is done, to summarize the third chapter and emphasize the strengths and weaknesses of every concept. In the fth chapter attempts to combine the strengths of the concepts are developed. It results that the multi-energy carrier approach of the energy hub concept should be used to improve virtual power plants and microgrids.

Kurzfassung
Die im europischen Netz erzeugte Energie aus erneuerbaren Energiequellen a (RES) hat stark zugenommen. Im Jahre 2005 wurde achtmal mehr Energie durch erneuerbare Quellen produziert als noch im Jahre 1990. In Zukunft mchte die EU den Zuwachs von RES weiter vorantreiben. Dabei soll haupto schlich die Nutzung von Windenergie und Biomasse erweitert werden. a Bisher wurden RES oftmals nach dem Motto t and forget im Verteilnetz angeschlossen. Auf Grund der steigenden Anzahl von RES werden heute jedoch bessere Integrationswege gesucht. Mglichkeiten dazu bieten die drei o Konzepte: Virtual Power Plants, Microgrids und Energy Hubs. Die vorliegende Arbeit prsentiert diese drei Konzepte und gibt einen Einblick wie a sie aktuell verwendet werden. Im dritten Kapitel wurden zehn Kriterien aufgestellt, um an ihnen die drei Konzepte zu vergleichen. Dabei stellt sich heraus, dass die Konzepte unterschiedliche Schwerpunkte haben und nicht miteinander konkurrenzieren. Im darauolgenden Kapitel wird eine SWOT-Analyse zu jedem Konzept erstellt, um die Ergebnisse aus dem dritten Kapitel zusammenzufassen und Strken sowie Schwchen aufzuzeigen. a a Im fnften Kapitel werden Anstze entwickelt wie Virtual Power Plants, u a Microgrids und Energy Hubs miteinander kombiniert werden knnten, um o die Strken der Konzepte zu verbinden. Daraus resultiert, dass der Multi a Energietrger Ansatz vom Energy Hub Konzept auf die beiden anderen a Konzepte angewendet werden sollte, um durch die ganzheitliche Betrachtung Virtual Power Plants und Microgrids zu verbessern.

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Contents
List of Acronyms 1 Introduction 1.1 Development of Renewable Energy Sources in Grid . . . . . . . . . . . . . . . . . . . . . . . 1.2 Integration of RES in the European Grid . . 1.3 Objective of this thesis . . . . . . . . . . . . . v 1 the European . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 2 3 4 4 5 7 7 9 9 11 12 13 15 16 17 18 20 21 22 23 24 25

2 VPPs, Microgrids and Energy Hubs 2.1 Virtual Power Plants . . . . . . . . . . . . . . . . . . . . . 2.1.1 Applications of the Virtual Power Plant Approach 2.2 Microgrids . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.2.1 Applications of Microgrids . . . . . . . . . . . . . . 2.3 Energy Hubs . . . . . . . . . . . . . . . . . . . . . . . . . 2.3.1 Applications of the Energy Hub Approach . . . . . 3 Comparison Criteria 3.1 Electricity Market Participation . . . . . . . . . . 3.2 Power System Stability . . . . . . . . . . . . . . . 3.3 Reliability . . . . . . . . . . . . . . . . . . . . . . 3.4 Additional Infrastructure Installations . . . . . . 3.5 Dealing with the Limited Accuracy of Production 3.6 Demand Side Management and Plug-in Hybrids . 3.7 Energy Eciency . . . . . . . . . . . . . . . . . . 3.8 Interaction of Dierent Energy Carriers . . . . . 3.9 Carbon Dioxide Emissions . . . . . . . . . . . . . 3.10 Application Area . . . . . . . . . . . . . . . . . . 3.11 Summarising Table . . . . . . . . . . . . . . . . . 4 SWOT - Analysis

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5 Discussion 28 5.1 Combinations of the Concepts . . . . . . . . . . . . . . . . . . 29 5.2 Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 iii

CONTENTS Bibliography

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List of Acronyms
CHP DER DG EU ICT RES TSO VPP WT Combined Heat and Power Distributed Energy Resources Distributed Generation European Union Information and Communication Technology Renewable Energy Sources Transmission System Operator Virtual Power Plant Wind Turbines

Chapter 1

Introduction
1.1 Development of Renewable Energy Sources in the European Grid

In gure 1.1 the development of renewable energy sources (RES) in the three sectors electricity production, transport and heating is demonstrated. It is obvious that dierent trends exist in the three sectors. The highest increase is visible in the electricity production sector. This can be attributed to the Directive 2001/77/EC on renewable electricity [1]. On the other two sectors no legally binding rules were established at EU level. Nevertheless, there is also noticeable progress attributed to the eorts of a few committed Member States [1]. This thesis deals mostly with the integration of renewable electricity production. In the following a closer look to this sector will be taken.

Figure 1.1: The contribution of renewable energy (heat (RES-H), electricity (RES-E) and transport (RES-T)) 1990 - 2004 (Mtoe). Source: Renewable Energy Road Map 2007 [1] 1

CHAPTER 1. INTRODUCTION

Development of the New Renewable Electricity Generation in the EU


The term new renewable includes RES without hydro generation. If we look at the growth of these sources in gure 1.2, an eight times bigger amount results in 2005 compared with 1990. The biggest part of this increase can be attributed to wind generation followed by biomass.

Figure 1.2: Non-hydro renewable electricity generation in EU-25 (19902005). Source: Renewable Energy Road Map 2007 [1]

Scheduled Growth of Renewable Energy Production


In Directive 2001/77/EC all member states dened national targets for the proportional part of renewable electricity on the overall electricity consumption in their country. If these targets are reached, the proportional part of renewable electricity on the overall consumption in the EU will be 21% by 2010 [1]. Furthermore, until 2020 it is planned to nearly triple the electricity output of RES compared to 2004 (compare gure 1.3). Thereby the biggest potential for growth is forecast to be wind energy, especially oshore generation. But also biomass should heavily increase, whereas the electricity generation of hydro units remains at nearly the same level.

1.2

Integration of RES in the European Grid

In the previous section it was demonstrated that the amount of RES in electricity generation has strongly increased since 1990 and will grow further in the future. Thereby wind generation is meant to play the most important part. The accuracy of forecasts for wind speed is getting better and better but still uncertainties remain. The European transmission grid has to deal with large unscheduled variability in power generation. Furthermore, in the lowest distribution levels, small RES are connected. If a lot of them

CHAPTER 1. INTRODUCTION

Figure 1.3: Renewable growth: Electricity projections by 2020. Source: Renewable Energy Road Map 2007 [1] are connected in the same region, they could cause upstream energy ows instead of the usual ows from high to low voltage levels. As to date, small RES were connected usually with a t and forget approach [2]. Due to the increasing amount of produced energy they have to be better integrated into the system.

1.3

Objective of this thesis

This thesis describes three concepts to improve the integration of RES in the grid: Virtual Power Plants, Microgrids and Energy Hubs. The dierent integration aspects are emphasized. Furthermore, the three concepts are compared in dierent criteria and a SWOT-analysis is done. Finally possibilities to combine the strengths of each concept are developed.

Chapter 2

Virtual Power Plants, Microgrids and Energy Hubs


In this chapter three concepts to integrate renewable energy sources (RES) into the energy network are presented. First of all virtual power plants (VPP) are described, followed by Microgrids and the energy hub approach. In every section the concepts are introduced, followed by short descriptions of current projects.

2.1

Virtual Power Plants

The goal of VPPs is to allow DER to access the energy market. Due to the stochastic variations of produced energy in solar and wind power units, the risk for a single unit to participate in the energy market is very high. If the scheduled energy cannot be delivered, the producer has to buy expensive balancing energy. As the uncertainty is often too high, the unit does not participate in the energy market or participates only with small amount of its maximal capacity. Furthermore, the participation in forward or control energy markets is linked with even higher risks which makes a participation nearly impossible. Another problem is that DER are often too small to participate in the electricity markets. The minimal trading volume of hourly contracts for power at the EEX1 spot market is 0.1 MW [3]. To participate in the control energy market a minimal nominal power of 30 MW-50 MW is necessary [4]. To deal with these circumstances, the VPP approach adds many DER in one cluster and connects them with an information network. This means that stochastic variations can be balanced between lots of single units. Therefore, the group of DER is comparable to a power plant connected to the transmission grid. Participation in the energy market will be facilitated. Figure 2.1 depicts a
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European Energy Exchange

CHAPTER 2. VPPS, MICROGRIDS AND ENERGY HUBS

schematic composition of a VPP. In [5], p. 13 an illustrating example how the market access for a cluster of producers instead of a single producer is facilitated, is calculated.

Figure 2.1: Schematic composition of a VPP. Dierent types of RES, like a river power station, a wind turbine, a solar panel and a CHP unit, build a VPP. To balance the weather dependent power production exible loads (FL) and a battery are added. All units are connected with ICT. Thus, participation on electricity markets is in a similar way possible as for big power plants.

2.1.1

Applications of the Virtual Power Plant Approach

Dierent variations of VPP are projected. On the one hand there are groups of generation units which participate on the energy or control energy market. On the other hand exible loads which can sell saved energy are investigated. Control Energy VPP Since September 2003, EVONIK Power Saar GmbH has been operating a control energy VPP with a total capacity of 400 MW. Industrial and commercial power plants oer tertiary control energy to the TSOs in Germany [4].

CHAPTER 2. VPPS, MICROGRIDS AND ENERGY HUBS Commercial VPP in Sauerland

Siemens and RWE started the operation of a commercial VPP in Sauerland, North Rhine-Westphalia, on October 31, 2008. They linked nine hydroelectric facilities with a total capacity of 8600 kW together. In the near future, CHP units, biomass and wind power plants should be integrated as well [6]. EU-Project Fenix On October 2005, a 4-year EU-project named FENIX (Flexible Electricity Networks to Integrate the eXpected energy evolution) started. New communication and control devices were developed to demonstrate the VPP approach. The goal of this project is to boost DER contribution on the European power system [7]. Swarm-Energy Following the slogan: We will build Germanys biggest gas power plant, the company Lichtblick wants to install 100000 small2 CHP units in private households. All these units are wirelessly linked and controlled from a dispatch centre. The power production is driven from the heat demand of the households. To allow the operator enough exibility, a heat storage is implemented. Therefore, they can participate on the electricity market. Lichtblick expects a total capacity similar to two nuclear power plants [8].

20 kW electrical and ca. 35 kW thermal power

CHAPTER 2. VPPS, MICROGRIDS AND ENERGY HUBS

2.2

Microgrids

A microgrid is a cluster of local DER and loads in such a way that an operation within the grid or in islanded mode is possible. Usually it is connected at the low voltage level but sometimes also at the medium voltage level. The connected microgrid appears as one node, generating or consuming power from the grid. To operate in an isolated mode, energy storage devices are often necessary and the loads are dierentiated in reliability classes. In gure 2.2 an example of a microgrid with dierent generation units and storage devices is illustrated. In addition the loads are classied in dierent reliability classes3 .

Figure 2.2: Example of a microgrid with a load classication into three reliability types. Source: http://certs.lbl.gov/certs-der.html.

2.2.1

Applications of Microgrids

In the microgrid project of the EU, seven pilot microgrids are in operation [9]. Dierent RES like PV, wind and biomass power plants are integrated. But often also a diesel generator for electricity back-up is installed. As an EU project example, the microgrid on the Greek island Kythnos is presented. Furthermore the Aomori project in Hachinohe, Japan is mentioned.
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Refer to 3.6

CHAPTER 2. VPPS, MICROGRIDS AND ENERGY HUBS Pilot Microgrid in Kythnos

On the Greek island of Kythnos a single phase microgrid is installed. 12 houses are supplied by 10 kWp of PV, a 53 kWh battery bank and a diesel generator with a nominal output of 5 kVA. In addition, the system house is supplied by 2 kWp PV and a 32 kWh battery bank. The dierent units are connected over a communication cable and controlled from the system house. Probably a 2 to 3 kW wind turbine will be integrated in the near future to minimise the use of diesel fuel in islanded operation [9]. The Aomori Project in Hachinohe In gure 2.3 an overview of the Hachinohe project is given. In this microgrid only RES supply the total demand of around 610 kW. Thereof 150 kW are weather-dependent generation (PV and WT) and 510 kW are controllable digester gas engines. Furthermore, a lead-acid battery system with a capacity of 100 kW is installed [10].

Figure 2.3: Overview of the Aomori microgrid project in Hachinohe, Japan [11].

CHAPTER 2. VPPS, MICROGRIDS AND ENERGY HUBS

2.3

Energy Hubs

An energy hub describes the relation between in- and outputs of energy ows. In the hub multiple energy carriers like electricity, gas, heat, etc. can be converted, conditioned and if available also stored. Thereby, a hub can model a single building or a whole country. Figure 2.4 illustrates a hospital modelled as hub. Hubs can be connected in a network. Each hub is described with a coupling matrix which links the inputs and outputs of one unit. In this way the network is mathematically easy comprehensible and very adaptive for every possible combination. In gure 2.5 an example of a network with three energy hubs is presented. Due to the coupling of multiple energy carriers more degrees of freedom in the control are given and a holistic view on energy ows is possible [12].

Figure 2.4: The hospital of Baden modelled as energy hub. Electricity can be generated in the hospital with three diesel emergency generators. In addition, heat and district heating can be produced with fuel oil, diesel or natural gas [13].

2.3.1

Applications of the Energy Hub Approach

The energy hub approach is used as a tool to analyse the actual energy system, to simulate dierent scenarios for the future and to nd optimal solutions4 how the energy system in 30 to 50 years should look like. New challenges like plug-in hybrid electric vehicles and prospective generation and storage technologies are considered [14]. Bern as Energy Hub In this case study, all generation and energy storage facilities of Bern are modelled as energy hubs which are connected to a network. Dierent scenar4 Concerning reduction of emissions, investment planning or optimal power ows in multiple energy carrier systems

CHAPTER 2. VPPS, MICROGRIDS AND ENERGY HUBS

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Figure 2.5: Example of a network of three energy hubs. They are connected with a district heating network. In addition, electricity and gas in- and outputs are presented [13]. ios concerning emissions, new supply possibilities and costs are developed. The goal is to dene a roadmap from todays to a future energy system with low emissions. Dtwil/Baden a In another case study, Dtwil in Baden is modelled with eleven hubs. Each a of these hubs has a specic load prole. Dened as hubs are for example a residential area, a commercial area with a natural gas station and a hospital [13]. The hospital modelled as energy hub is presented in gure 2.4.

Chapter 3

Comparison Criteria
In this chapter the three concepts of virtual power plants, microgrids and energy hubs are discussed on a selection of criteria. These criteria comprise important aspects in relation to the integration of RES in the European power system. At the end of the chapter a table summarises the importance of the criteria for the three concepts.

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CHAPTER 3. COMPARISON CRITERIA

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3.1

Electricity Market Participation

Electricity market participation deals with the possibility of RES to participate in the dierent electricity markets such as future, spot and control energy market. The goal is that market incentives help to balance price peaks. The main problems with the electricity market access for RES are the nominal power of small units and the stochastic variability of weather dependent entities.

Virtual Power Plants


Electricity market participation for any DER is the key aspect of the VPP approach. Dependent on the combination of generators, exible loads and storage devices, the participation in dierent electricity markets is possible. The bigger the degree of freedom in regulating is, the more possibilities exist to participate in spot, future and control energy markets. At the moment it is not protable for small RES to participate in the market, because most of the countries in Europe have feed-in taris1 which are more attractive. But often these taris decrease yearly with a given percentage dependent on the technology [15]. So, in the future the participation in the dierent energy markets could be essential. One big advantage of a VPP is that the whole cluster can be managed by one broker or trader, reducing the market participation costs for a single unit signicantly.

Microgrids
Usually a single microgrid is too small to participate in electricity markets. Including a microgrid in a VPP or a network of many microgrids2 could allow the access to electricity markets.

Energy Hubs
In the energy hub approach market participation is not explicitly discussed. Probably an energy hub model could be used to maximise the prot of a generator, so that a market access for this unit is more attractive.

1 2

Refer to EEG in Germany [15]. E.g. in a multiagent system [16].

CHAPTER 3. COMPARISON CRITERIA

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3.2

Power System Stability


Power system stability is the ability of an electric power system, for a given initial operating condition, to regain a state of operating equilibrium after being subjected to a physical disturbance, with most system variables bounded so that practically the entire system remains intact.

In [17] the stability of an electric power system is dened as follows:

Thereby three categories of stability are distinguished: 1. Rotor Angle Stability: Ability of synchronous machines to hold the electromagnetic torque and the mechanical torque in an equilibrium. 2. Frequency Stability: The equilibrium between generation and loads must be ensured. 3. Voltage Stability: Mainly depends on the balance of reactive power demand and supply.

Virtual Power Plants


The inuence of VPPs on the power system stability depends mainly on the mix of the integrated units. Through the connection of voltage and frequency control power electronics, the system stability can be improved. A VPP which participates in the control energy market may contribute to improve stability. Otherwise, if a lot of DGs replace big generators, the power system inertia is decreased. Hence, the rotor angle stability is also decreased [18]. Generally, system stability is rarely an issue in the VPP concept.

Microgrids
The inertia in a microgrid is very small. If there is a rotating generator in the system and there occurs an imbalance between the input mechanical torque and the output electromagnetic torque, a fast deceleration or acceleration of the rotor will occur3 . But in microgrids it is also possible that all generation units are connected with synchronised power electronic inverters. In this case the frequency is independent of rotating masses. Therefore the information and control system has to react quickly if an unbalance occurs in the system. If the power supply is too big, the batteries can be charged. Else if the power consumption is over the supply, shedable loads can be switched o to restore the power balance [19]. Connecting or disconnecting of loads in isolated operation can be critical if they are big in relation to the installed generation capacity (see gure 3.1).
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See swing equation

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Figure 3.1: Switching-on of a 37 kW air conditioner in an isolated microgrid at the Aomori project in Hachinohe [11].

Energy Hubs
In the energy hub approach power stability has not been discussed yet. But the stability of interacting multi energy carriers is an open topic to research.

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3.3

Reliability

Reliability of electric power systems describes the probability of the system to supply the loads with a reasonable assurance of quality over a long time period. Thereby reliability is based on two aspects: adequacy and security. In [17] they are dened as follows: Adequacy: The ability of the power system to supply the aggregate electric power and energy requirements of the customer at all times, taking into account scheduled and unscheduled outages of system components. Security: The ability of the power system to withstand sudden disturbances such as electric short circuits or not anticipated loss of system components.

Virtual Power Plants


Through participation in the control energy markets VPPs can help to increase the reliability in the whole electric power system. But in a VPP there could be some critical units like exible generators or storage devices which balance the uctuations of non-dispatchable entities. If a fault occurs in a unit crucial for the power balancing probably other entities are inuenced. Hence the security of the systems could be decreased.

Microgrids
In the microgrid approach reliability is a key issue. Due to the additional possibility of operating in an isolated way, a microgrid has an increased degree of reliability. Whenever a fault occurs in the connecting grid, the microgrid can decouple and hence stay in operation. This behaviour is important for critical units such as hospitals and data backup centres. To improve the security of a microgrid in islanded operation, redundancies for critical units like backup generators could be included.

Energy Hubs
The energy hub approach can be used to plan an electric power system with increased reliability. Including storage devices and the possibility to link dierent energy carriers can increase the adequacy and hence the reliability [20].

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3.4

Additional Infrastructure Installations

In this section it is discussed which necessary infrastructure has to be included in todays system to implement one of the three approaches.

Virtual Power Plants


To build a VPP, ICT lines between the dierent entities is necessary. Usually the VPP is controlled from a central unit. In addition a connection to the market over a broker or a trader access is necessary.

Microgrids
A microgrid is usually operated from a control centre, where the use of DG is optimised. The individual units and loads are connected with the control centre over ICT. In addition, to allow an islanded operation which is based mainly on DER, storage devices have to be included.

Energy Hubs
Due to the fact that the energy hub approach is a modelling and planning tool, a result of a simulation could be, that additional infrastructure should be integrated in the future. To do a simulation initial values are necessary. Thereby data from todays infrastructure could be a good base. Hence some additional measuring units should be installed in the system, for example for measuring heat demand.

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3.5

Dealing with the Limited Accuracy of Production Forecasts

Weather dependent generators like photovoltaic or wind turbines can only be forecasted with a limited accuracy. But the deviation of the forecasts can have a strong inuence on power production. E.g. the relation between generated power in a wind turbine and the wind speed is cubic.

Virtual Power Plants


To balance the uncertainties of weather dependent RES in VPP, storage or enough exible load or generation capacity has to be included. Thereby it has to be more attractive for storage or exible units to participate in a VPP instead of a direct access at the control energy market. Two possibilities are imaginable: Few big storage or exible units: The nancial incentives of the VPP have to be at least on the level of the control energy market. A cluster of several smaller storage or exible load units: Due to the fact that a small unit does not have enough capacity to participate on the control energy market it could be interesting for several units to cooperate in a cluster. If their accumulated capacity is big enough for the access to the control energy market, again the VPP has to allocate at least the same incentive as the control energy market does. It remains the question if the price for energy in the VPP is competitive on the energy market. Whereas, the accuracy of the production forecast has a big inuence on the production costs.

Microgrids
Microgrids in islanded operation must have enough storage capacity or some backup devices like fuel generators, to deal with the variability of weather dependent units. Furthermore, exible loads can balance a part of the variability.

Energy Hubs
In simulations of energy hub models historical weather data can be fed in. This allows developing multiple scenarios whereby e.g. the required capacity of storage units can be developed [21]. But uncertainties remain, because weather incidents can only be scheduled for the future.

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3.6

Demand Side Management and Plug-in Hybrids

Demand side management allows to control the loads by the system operator. If not enough power is generated in the system, loads can be switched o. Another way is to manage loads in such a way that operation costs or emissions are minimised. Hence controlling on the generation and load side is possible. The mobile batteries of plug-in hybrids allow additional storage and control possibilities in the system. To allow an eective use of the storage capacity and at the same time a comfortable operation for the drivers, demand side management is indispensable.

Virtual Power Plants


Demand side management can be an important aspect in VPPs. Flexible loads help to balance weather dependent generation in the VPP or the whole VPP is built only with demand side management and participates on the control energy market. Plug-in hybrids are not considered yet, but they could oer with their batteries an additional support to balance weather dependent generation.

Microgrids
In islanded operation loads play an important role, as loads can be of the same scale as generation units4 . Therefore demand side management is important5 . Loads can be classied in dierent reliability types like sensitive, adjustable and shedable. Sensitive loads have the highest importance and should always be supplied with power. Adjustable loads can be controlled in a given power interval and shedable loads can be disconnected if not enough power is generated at the moment. Refer to gure 2.2 for an example to this behaviour. So, exible or adjustable loads can help to balance weather dependent generation and hence reduce the necessary storage capacity. Plugin hybrids are a good addition to increase storage capacity in the system, but are only rarely discussed yet.
E.g. residential air conditioning units have usually a capacity of 3 to 20 kW. Source: http://en.wikipedia.org/wiki/Air_conditioner. 5 As is usually the case in many microgrids, underfrequency relays disconnect the load in case of power shortage. As soon as the frequency reaches its nominal value again, automatic switches reconnect the loads with a random delay. The time delay helps so that the power consumption does not increase stepwise, thus not leading to undesirable transient eects.
4

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Energy Hubs
A paper about demand side management6 in the energy hub approach will be published soon. In this paper three examples are given how demand side management could be used to minimise the energy systems operation costs or the green house gas emissions. Plug-in hybrids have been modelled as hubs. Thereby aspects like driving with fuel or electricity, dierent day schedules or grid ancillary services have been studied [22].

Written by Peter Ahcin.

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3.7

Energy Eciency

The World Energy Council denes energy eciency as follows [23]: Energy eciency is rst of all a matter of individual behaviour and reects the rationale of energy consumers. Avoiding unnecessary consumption of energy or choosing the most appropriate equipment to reduce the cost of the energy helps to decrease individual energy consumption without decreasing individual welfare.

Virtual Power Plants


In VPPs economic eciency is a more important aspect than energy eciency. Market incentives should help to balance price peaks, for example through load shifting from high price hours to lower price hours.

Microgrids
Energy eciency is a key aspect for microgrids in islanded operation. Due to the limited generation capacity, an ecient and economical handling with energy is necessary. The classication of loads7 is one method to improve the energy eciency. Furthermore, a simulation in Japan demonstrated that the total primary energy consumption can be lower when the microgrid reduces the amount of purchased energy from the grid [24]. This can be explained with the use of CHP units and the elimination of transmission losses.

Energy Hubs
In the energy hub approach the ecient use of energy is an important aspect. Due to the consideration of interaction between energy carriers, solutions with the lowest total energy consumption can be found. Thereby, the tradeo between cost minimisation and maximisation of energy eciency has to be considered [25].

Refer to gure 2.2

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3.8

Interaction of Dierent Energy Carriers

The view on interaction of dierent energy carriers allows to optimise the total energy ows in the system. Coupling of dierent energy carriers increases the redundancy and can improve the eciency if synergies can be used.

Virtual Power Plants


In a VPP the interaction of dierent energy carriers is only rarely considered. CHP is an aspect8 , but other interactions are not considered.

Microgrids
In microgrids the view on interaction of dierent energy carriers is limited to CHP. Sometimes inside energy ows to generate electricity are also considered9 .

Energy Hubs
In the energy hub approach the interaction of dierent energy carriers is a key aspect. The more couplings that exist in a hub, the more control opportunities are possible and hence the reliability of electricity production in a hub increases. For example a hub with electricity and gas grid input, a wood ring and a solar panel can allocate electricity at the output via the grid, the solar panel or by generating electricity with wood or gas ring. If a fault occurs in the grid, the loads can be supplied with power from the wood and gas generators and the solar panel. Due to the dierent sources the reliability of the electricity load supply is increased. But interaction of dierent energy carriers is not only an aspect of reliability, but also of optimising the whole energy ows in the system. For more information on this topic the reader can refer to [26] and [27].

8 9

Refer to 2.1.1 Wood-gas circuit to operate gas engines in the Aomori project. Refer to gure 2.3

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3.9

Carbon Dioxide Emissions

The question if the concept could be used to reduce the carbon dioxide emissions is an important aspect in the background of the climate change. It is important that the emitted CO2 in production and transport of new infrastructure which could be the result of the implementation of one of the concepts has to be taken into account for the nal CO2 balance too.

Virtual Power Plants


VPP can reduce CO2 emissions indirectly by producing electricity with RES. In addition CHP could also reduce the amount of emissions. But if in the VPP fossil generation units are integrated, the CO2 balance could get worse. A critical aspect concerning CO2 emissions could be, that the small units in a VPP do not have to buy CO2 certicates10 and hence are not subject to regulation11 .

Microgrids
In microgrids the CO2 emissions should be reduced, due to less wasted energy e.g. with CHP [28]. This leads to a lower total energy consumption and hence to lower emissions. But similar to the VPP approach integrated fossil red generators or gas turbines which worsen the CO2 balance have to be considered. A simulation example in Japan showed, that the CO2 balance under certain circumstances12 can be better when more electricity is purchased from the grid instead of generated in the microgrid [24].

Energy Hubs
The simulation with energy hubs can be done in a manner where CO2 emissions are minimised. Thereby often a trade-o between reduction of emissions and energy costs results. Refer to [27] for an example to this behaviour. However it is dicult to have input data because measuring of CO2 emissions is not done in all parts of todays infrastructure. For this reason, CO2 emissions dependent on the generation have to be modelled and this consequently leads to more uncertainties in the simulation.

Thermal power plants with a capacity bigger then 20 MW have to buy CO2 certicates in the EU. Refer to http://de.wikipedia.org/wiki/EU-Emissionshandel 11 But probably in the future a VPP has to buy certicates equal to its total capacity. 12 Refer to [24]

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CHAPTER 3. COMPARISON CRITERIA

23

3.10

Application Area

The criterion application area describes the geographical size of the area on which one of the approaches could be implemented.

Virtual Power Plants


A VPP is imaginable in any size of area in a single country. If the VPP is located in dierent countries, problems with cross-border capacities could occur. E.g. if the VPP has to balance unexpected power for one country in another country. For this reason a VPP should be located in a single country.

Microgrids
For reasons of reliability microgrids should be implemented in a small local area. The longer the line distances in the microgrid, the bigger is the probability that a fault occurs inside the microgrid and islanding operation fails. On the other hand, in a microgrid with more units, the redundancy can be increased. Hence, in the design of a microgrid the application area and the number of involved units have to be optimised to increase reliability.

Energy Hubs
The application area of an energy hub is not limited. A single hub can contain one building like a hospital or whole countries. In addition networks are possible. Therefore the energy hub approach is a very exible and scalable tool, adaptable for every application area.

CHAPTER 3. COMPARISON CRITERIA

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3.11

Summarising Table

In the following table all analysed criteria are evaluated with the importance for the three concepts. Three classes are given: 1. Key aspect: ! 2. Average importance: 3. Not considered: -

Electricity Market Participation Power System Stability Reliability Additional Infrastructure Installations Dealing with the Limited Accuracy of Production Forecasts Demand Side Management Plug-in Hybrids Energy Eciency Interaction of Dierent Energy Carriers Carbon Dioxide Emissions

VPP ! ! !

MG ! ! ! ! ! !

EH ! ! ! !

Table 3.1: Importance of the analysed criteria for Virtual Power Plants (VPP), Microgrids (MG) and Energy Hubs (EH). ! means important aspect, medium important and - means not considered.

Chapter 4

SWOT - Analysis
To summarise the results of chapter 3 a SWOT1 -Analysis for every concept is presented. The dierent aspects and characteristics of the three approaches are emphasised. Thereby a strength for every concept is that with the integration of RES more green energy is included in the system. At the same time the threat exist that integration of RES could result in too high energy prices.

VPP
Strengths
Electricity market access for small units. Participation in a VPP is independent of geographical distances.

Weaknesses
Costs for controlling inside the VPP have to be cheaper than on the control energy market. Technical realisation of the necessary ICT and the resulting energy price of a VPP are only rarely discussed yet.

Opportunities
Market incentives improve the economically ecient use of electricity in small units and probably balance expensive peak hours. The potential of industries to participate on the control energy market could be capitalised.
1

Strengths, Weaknesses, Opportunities, Threats

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CHAPTER 4. SWOT - ANALYSIS

26

Threats
Resulting price in the VPP could be too high not competitive with big single units. Feed-in taris could be more attractive than the participation in the VPP. Hence the VPP is strongly dependent on political or regulatory inuences.

Microgrid
Strengths
Improved Reliability. Finds the ecient local solution. Strong social integration of energy production and distribution.

Weaknesses
With increasing size it becomes more complex and the risk of internal faults increases.

Opportunities
Improved electricity supply of islands and remote regions. Standardised solution for emergency and back-up devices with integrated RES instead of fossil fuels. Could help to improve the power supply in less developed countries [29].

Threats
The reliability in the European power system is already quite good. The realisation of microgrids has to be motivated with integration of RES probably the microgrid approach is too expensive compared with other possibilities. In islanded operation, frequency problems can occur if big loads in relation to the system are connected or disconnected.

CHAPTER 4. SWOT - ANALYSIS

27

Energy Hub
Strengths
Very exible and scalable approach for the modelling of every new or existing technology. Holistic view on the energy sector.

Weaknesses
The energy hub approach has a more theoretical focus. It is a modelling and planning tool realisation needs an additional eort. Input data can not be available in todays system missing measurement stations.

Opportunities
View on multi-energy carriers could bring new scenarios and synergy benets.

Threats
Computing time can be too big for complex problems limitation on given scenarios.

Chapter 5

Discussion
In the rst part of this chapter a summarising overview of the results in the previous chapter is given. In the second part ideas are generated how the strengths of the three concepts could be combined to more powerful solutions. Finally a conclusion is presented.

Virtual Power Plant


To allow RES to participate in the energy market, a VPP has to deal with the limited accuracy of production forecasts. The big number of units at dierent places balance uncertainties. In addition adjustable loads and generation units or storage devices in the VPP are implemented. Therefore, ICT between the participating units is necessary. Apart from that, a VPP does not change todays power system. If a VPP is located in dierent countries, problems with the cross border capacity could result.

Microgrid
The key aspect of microgrids is to improve reliability and to allow a more ecient use of energy. Thereby islanded operation must be possible. Furthermore the energy supply is done with RES mainly. To do this, ICT and storage units are necessary. In addition, demand side management helps to balance uncertainties in the electricity production of RES. Due to the small size of the installed generation capacity, stability e.g. during connecting or disconnecting of loads, is an dicult task during isolated operation. Microgrids allow an ecient use of energy, but the resulting operation costs could yield problems.

Energy Hub
The energy hub approach is the only concept which explicitly considers the interaction of dierent energy carriers. This allows a holistic view on energy

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CHAPTER 5. DISCUSSION

29

ows. Due to this aspect, new scenarios could be found. Probably a more ecient use of energy carriers can be developed under consideration of factors like CO2 emissions. Anyhow, the energy hub is in an early development status, hence the concept has to be veried in case studies. The energy hub approach is a very exible and scalable modelling, planning and analysing tool. However, to calculate complex problems without limitation on given scenarios, computing time could be a challenge.

5.1

Combinations of the Concepts

VPP and Microgrids


A microgrid can be seen as a single node in the grid. Thereby, consumption of power from the grid or reinjection is possible. If the microgrid is in islanded operation, the power balance at that node is zero. If many microgrids are connected with ICT they can work as a VPP. Thereby the market access for the microgrids is possible. Through the ecient use of energy and the big number of control possibilities in the microgrids, they could be a very valuable addition in a VPP. So, the microgrid could replace some controllable units and storage devices in the VPP.

VPP and Energy Hubs


The study of a VPP with the energy hub approach could lead to the development of new implementation possibilities. Probably the view on multi energy carriers allows to increase the generation exibility and to decrease the storage capacity. These possible behaviours are exemplied on the swarmenergy approach in section 2.1.1. 100000 small CHP units will be installed in Germany. They are driven from the heat demand of the households, but have heat storages to allow a exible operation. If they are modelled as a network of energy hubs the energy ows could be studied in a holistic way. The electricity and gas network, but possibly also an additional district heating network could be considered. Thereby scenarios could result where the generation exibility is increased and storage capacity could be decreased. The district heating network could also be an addition to supply heat in nancially unattractive low-price hours. Hence, the energy hub approach could determine if the implementation of a district heating network is economically interesting.

Microgrids and Energy Hubs


Through the consideration of multi energy ows the energy hub approach could be a helpful addition to improve the reliability and ecient use of energy in a microgrid. In the energy hub approach both, the electricity and

CHAPTER 5. DISCUSSION

30

the gas network, could be considered. With the coupling over CHP devices gas can be used to produce electricity. Hence, the reliability of electricity can be improved if the microgrid is in islanded operation. In addition, the total energy eciency could be improved by the consideration of all energy ows in the system. Particularly a heat network could also be considered.

VPPs, Microgrids and Energy Hubs


The combination of the strengths of all three approaches could be the best way to integrate RES. VPPs allow the participation in electricity markets. Microgrids can improve the reliability and lead to an ecient energy use. The energy hub approach allows a holistic view on the energy ows and hence can develop optimised scenarios of overall energy consumption. If the above example of the swarm-energy is extended with the microgrid approach additional possibilities are possible. If nearby CHPs are connected in a microgrid, they could be used to allow new possibilities of energy supply. Probably the emergency electricity supply of critical units like hospitals or data backup centres could be realised with a cluster of the CHP units organised as microgrid. In gure 5.1 the example of the CHP network with additional district heat connections is presented. The yellow square represents the microgrid which supports the hospital with electricity back-up and heat.

Figure 5.1: Network of CHP units. Due to the holistic view of the hub approach an additional district heat network could be useful. The consideration of a microgrid gives additional branches of business, like electricity backup and heat supply for a hospital.

CHAPTER 5. DISCUSSION

31

5.2

Conclusion

Regarding the integration of RES the three concepts follow dierent approaches, which do not compete against each other. The highest potentials for microgrids are on islands, remote regions, in places where high reliability is demanded, like hospitals, back-up centres or big commercial buildings and in countries without a meshed grid. VPPs can be used mainly to give exible loads and small hydro power plants or maybe other DG units an energy market access. Weather dependent RES will probably not be competitive at the market yet. The integration of microgrids in a VPP is already an issue. Using the energy hub approach to improve VPPs or microgrids has not been considered yet. Thereby, the holistic view of the energy hub approach could be a benet for both, microgrids and VPPs or a combination of them. The energy hub approach is not focused on a specic problem with a dedicated solution. Such as dealing with electrical power variability of weather dependant RES through an implementation of a battery bank. It is more to start with the formulation of a conceptional modelling and analysis framework. All energy inputs, outputs, ows and conversion possibilities are identied, and afterwards holistic solutions will be searched. This procedure could result in new unexpected scenarios. For example, for the above problem, a gas station could be used as storage device to balance electrical power variability together with the heating CHP units in nearby households. All three concepts have in common, that the integration of RES needs ICT in the distribution grid. Hence, the t and forget approach is disused and a new task is to develop adequate ICT.

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