Pricing and Capacity Planning Problems in Energy Transmission Networks

Efficient use of energy is an increasingly important topic. Environmental and climate concerns as well as concerns for security of supply has made renewable energy sources a viable alternative to traditional energy sources. However, the intermittent nature of for instance wind and solar energy necessitates a radical change in the way we plan and operate energy systems. Another paradigm change which began in the 1990’s for electricity systems is that of deregulation. This has led to a variety of different market structures implemented across the world. In this thesis we discuss capacity planning and transmission pricing problems in energy transmission networks. Although the modelling framework applies to energy networks in general, most of the applications discussed concern the transmission of electricity. A number of the problems presented involves transmission switching, which allows the operator of an electricity transmission network to switch lines in and out in an operational context in order to optimise the network flow. We show that transmission switching in systems with large-scale wind power may alleviate network congestions and reduce curtailment of wind power leading to higher utilisation of installed wind power capacity. We present formulations of — and efficient solution methods for— the transmission line capacity expansion problem and the unit commitment problem with transmission switching. We also show that transmission switching may radically change the optimal line capacity expansion strategy. In the Nordic electricity system a market with zonal prices is adopted. We consider the problem of designing zones in an optimal way explicitly considering uncertainty. Finally, we formulate the integrated problem of pipeline capacity expansion planning and transmission pricing in natural gas transmission networks.