Working Group C1.39 - Optimal Power System Planning Under Growing Uncertainty

Australia’s energy transition is continuing at an unprecedented rate with record renewable penetration and growing uncertainty in our market systems.  This is also being experienced in other parts of the world and Working Group C1.39 has recently published Technical Brochure 820, which provides a review of this and how it is presenting a major challenge to optimal investment decisions.  The Australian members of the WG were Christian Schaefer, Pierluigi Mancarella and Herath Samarakoon.

In South Australia, in October 2020, the entire region’s electricity demand was supplied through solar generation[1], while energy was also exported to the rest of the interconnected system.    Similarly, the Australian Energy Market Operator (AEMO) reported a record number of large-scale renewable generating sources being registered, connected, and/or becoming commercially operational across the National Electricity Market (NEM) during 2020[2], a trend that is predicted to continue in the immediate future.

At the same time, there is more uncertainty in our market systems, unpredictable energy price fluctuations and “price contingencies” (e.g., noticeable fluctuation in the net demand driven by fast response batteries), as well as predictions of early retirement of some of our coal fired generating fleet, which in 2020 still supplied over half of our electricity demand. Furthermore, we are experiencing large-scale hydrogen development initiatives across the country which, in the long-term, could completely change the picture of the electricity system requirements. All these uncertainties make prudent investment in our electricity infrastructure more challenging than ever.

Research conducted by the WG through a questionnaire, case studies and data analysis, documents the background, and current processes and methods used for power system planning across the Working Group member regions, as well as the uncertainties each of these regions is managing. Of particular interest to Australia are the case studies conducted on seven of the Working Group member countries. In these, Technical Brochure 820 describes in some detail the key grid planning theories and technologies used in various market constructs, some similar, others quite different to the NEM or the Wholesale Electricity Market in Western Australia. In its analysis, the Working Group puts probabilistic planning, scenario-based planning (used in Australia), and uncertainty sets under the microscope with some interesting insights.

Likewise, a review of the software tools used by various WG member organizations for economic power system planning is presented, such as the ANTARES software used by the French operator RTE, or GRARE used by the Italian operator TERNA. While PLEXOS is the dominant market modelling tool used in Australia, this product is not dissimilar to that used by other power system planning bodies.

Ultimately, the key findings of Working Group C1.39 summarize many of the challenges and opportunities that Australia is facing in our energy transition and offer some key insights for our consideration:

• The two uncertainty factors most frequently considered in transmission system planning are the growth of customer demand, including emerging low carbon technologies such as electric vehicles and renewable energy sources, both large-scale and embedded in the distribution networks.
• The commonly used approaches to modelling uncertainties include: probability models, multiple scenario-based models, and uncertainty sets/intervals.
• Most member countries currently adopt scenario-based methods in transmission system planning because it is the easiest way of considering uncertainty.
• The combined scenario-based/robust/risk-based methods are regarded by a considerable number of member countries as the most appropriate methods that should be used in the future.
• The barriers to practically applying uncertainty optimization technologies to transmission system planning are relevant for almost every procedure and include data collection, model solving tractability, institutional, and social cognitive issues.

In terms of ongoing and future developments in Australia, key points include refining the methodology (currently based on least worst regret analysis) used to make network investment decisions across scenarios and, incorporating extreme events in the uncertainty set so that infrastructure planning can become more resilient to high impact low probability events.

The Technical Brochure is free for members and €180 for non-members.

[1] https://aemo.com.au/en/newsroom/media-release/solar-power-fuels-south-australias-total-energy-demand

[2] https://www.aemo.com.au/newsroom/news-updates/generator-connection-records-broken-in-the-nem