Market Integration of HVDC Lines: Cost Savings from Loss Allocation and Redispatching

Andrea Tosatto, Matas Dijokas, D. Obradović , Johannes Tilman Gabriel Weckesser, R. Eriksson, J. Josefsson, A. Krontiris, M. Ghandhari, Jacob Østergaard, Spyros Chatzivasileiadis

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Abstract

In the last decades, over 25’000 km of High-Voltage Direct-Current (HVDC) lines have been gradually integrated to the existing pan-European HVAC system. From a market point of view, HVDC interconnectors facilitate the exchange of energy and ancillary services between countries. In the Nordic region, many interconnectors are formed by HVDC links, as Scandinavia, Continental Europe and the Baltic region are non-synchronous AC systems. In this regard, this paper presents two cost benefit analyses on the utilization of HVDC interconnectors in the Nordic countries: in the first we investigate the utilization of HVDC interconnectors for reserve procurement and, in the second, we assess the implementation of implicit grid losses on HVDC interconnectors in the day-ahead market. The first analysis is motivated by some real events in 2018 where the inertia of the Nordic system dropped below a critical level and the most critical generating unit, a nuclear power plant in Sweden, was redispatched to guarantee the security of the system. In our analysis, we investigate the cost savings of using HVDC lines for frequency support using the Emergency Power Control (EPC) functionality instead of redispatching. Our results confirm that the frequency of redispatching actions will increase in the future and show the substantial cost savings from the utilization of HVDC lines for frequency support. The second analysis is based on the proposition of Nordic Transmission System Operators (TSOs) to introduce linear HVDC loss factors in the market clearing. With our analysis, we show that linear loss factors can unfairly penalize one HVDC line over the other, and this can reduce social benefits and jeopardize revenues of merchant HVDC lines. In this regard, we propose piecewise-linear loss factors: a simple-to-implement but highly-effective solution. Moreover, we demonstrate how the introduction of HVDC loss factors is a partial solution, since it disproportionally increases the AC losses. Our results show that the additional inclusion of AC loss factors can eliminate this problem.
Original languageEnglish
Title of host publicationProceedings of CIGRE 2020
Number of pages11
PublisherCIGRE (International Council on Large Electric Systems)
Publication date2020
Publication statusPublished - 2020
EventCIGRE 2020 - Palais des Congrès Paris, Paris, France
Duration: 23 Aug 202028 Aug 2020

Conference

ConferenceCIGRE 2020
LocationPalais des Congrès Paris
CountryFrance
CityParis
Period23/08/202028/08/2020

Keywords

  • Corrective Control
  • Emergency Power Control
  • Electricity Market
  • Fast Frequency Reserves
  • HVDC
  • Losses
  • Loss Factor
  • Redispatch
  • RG Nordic
  • Remedial Action

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