A capacity expansion model dealing with balancing requirements, short-term operations and long-run dynamics

One of the challenges of current power systems is presented by the need to adequately integrate increasing shares of variable renewable energies (VRE) such as wind and photovoltaic (PV) technologies. The study of capacity investments under this context raises refreshed interrogations about the optimal power generation mix when considering system adequacy, operability and reliability issues. This paper analyses the influence of such considerations and adopts a resource-adequacy approach to propose a stylized capacity expansion model (CEM) that endogenously optimize investments in both generation capacity and new flexibility options such as electric energy storage (EES) and demand side management (DSM) capabilities. Three formulations are tested in order to seize the relevance of system dynamics representation over the valuation of capacity and flexibility investments. In each formulation the complexity of the representation of operating constraints increases. The resource-adequacy approach is then enlarged with a multi-service representation of the power system introducing non-contingency reserve considerations. Therefore, investments decisions are enhanced by information from system operations requirements given by the hourly economic dispatch and also by a reliability criterion given by reserve needs. The formulations are tested on a case study in order to capture the trade-offs of adding more details on the system representation while exogenously imposing supplementary VRE penetration. The results obtained show the importance of adopting a sufficiently detailed representation of system requirements to accurately capture the value of capacity and flexibility when important VRE penetration levels are to be studied, but also to appropriately estimate resulting system cost and CO₂ emissions. (author)