Garrison, Jared, Gjorgiev, Blazhe, Han, Xuejiao, Niewkoop, Renger van, Raycheva, Elena, Schwarz, Marius, Yan, Xuqian, Demiray, Turhan, Hug, Gabriela, Sansavini, Giovanni, and Schaffner, Christian
Policy changes in the energy sector result in wide-ranging implications throughout the entire energy system and influence all sectors of the economy. Due partly to the high complexity of combining separate models, few attempts have been undertaken to model the interactions between the components of the energy-economic system. The Nexus-e Integrated Energy Systems Modeling Platform aims to fill this gap by providing an interdisciplinary framework of modules that are linked through well-defined interfaces to holistically analyze and understand the impacts of future developments in the energy system. This platform combines bottom-up and top-down energy modeling approaches to represent a much broader scope of the energy-economic system than traditional stand-alone modeling approaches. In Phase 1 of this project, the objective is to develop a novel tool for the analysis of the Swiss electricity system. This study illustrates the capabilities of Nexus-e in answering the crucial questions of how centralized and distributed flexibility technologies could be deployed in the Swiss electricity system and how they would impact the traditional operation of the system. The aim of the analysis is not policy advice, as some critical developments like the European net-zero emissions goal are not yet included in the scenarios, but rather to illustrate the unique capabilities of the Nexus-e modeling framework. To answer these questions, consistent technical representations of a wide spectrum of current and novel energy supply, demand, and storage technologies are needed as well as a thorough economic evaluation of different investment incentives and the impact investments have on the wider economy. Moreover, these aspects need to be combined with modeling of the long- and short-term electricity market structures and electricity networks. This report illustrates the capabilities of the Nexus-e platform. The Nexus-e Platform consists of five interlinked modules: 1. General Equilibrium Module for Electricity (GemEl): a computable general equilibrium (CGE) module of the Swiss economy, 2. Centralized Investments Module (CentIv): a grid-constrained capacity expansion planning module considering system flexibility requirements, 3. Distributed Investments Module (DistIv): a generation expansion planning module of distributed energy resources, 4. Electricity Market Module (eMark): a market-based dispatch module for determining generator production schedules and electricity market prices, 5. Network Security and Expansion Module (Cascades): a power system security assessment and transmission system expansion planning module. This report presents the results on how centralized and distributed technologies can address the increasing need for flexibility in the Swiss electricity system and how this affects the traditional operation of existing power generation units. We use the Nexus-e platform to simulate three scenarios: The Baseline scenario includes the projected development of techno-economic parameters (e.g., runtime of 50 years for Swiss nuclear power plants) and the status quo of the Swiss legislative and regulatory framework (e.g., financial subsidies for PV systems). The Nuclear-60 scenario reflects the discussion on the nuclear power exit and assumes that nuclear power plants are phased-out after a lifetime of 60 years. The High-Flexibility scenario reflects the discussion on the impact and value of an increased supply of distributed flexibility in the power system and assumes low battery costs and high demandside management potential.It is important to note that net-zero emissions targets (for Switzerland or the surrounding countries currently modeled) are not included in any of the simulated scenarios. Our results show that the nuclear phase-out is achieved alongside substantial investments in new photovoltaic (PV) capacities without causing serious problems matching the supply of electricity with demand. This transition occurs along with some additional investments in biomass and PV-batteries, but no investment in wind power or grid-batteries. The ending of investment subsidies after 2030 reduces the attractiveness of new PV capacities in 2040, but decreasing PV prices spur PV installations in 2050. By 2050, PV is responsible for the largest share (i.e., 32.6-35.5%) of electricity consumption, followed by hydro dam (26.0-28.3%) and hydro run of river (RoR) (15.9-17.4%). Additionally, as nuclear gets phased out, imports become a larger contributor to the supply of electricity in Switzerland providing up to 5.7% of the demand in 2050. Critical, however, is the time between 2030-2040, when the stagnating PV capacity cannot substitute nuclear phase-out fully, resulting in substantially higher net imports of up to 16.5% of the annual demand. Please note that all results presented in this report are subject to pronounced uncertainties and assumptions. Furthermore, the scenarios are illustrative and the results should be interpreted as indicating differences in the trends between scenarios and not interpreted as predictions. Therefore, we do not claim that the current legislative and regulatory framework is sufficient to achieve the renewable energy source (RES) targets. In light of the transition away from nuclear capacities and toward PV capacities, there is an increasing need for flexibility across a wide range of timescales from seasonal to sub-hourly. By utilizing a comprehensive representation of the energy system, the Nexus-e platform assesses how these flexibility needs are supplied, namely through a combination of: capacities in the centralized Swiss generation fleet, imports and exports, and added capacities in the distribution system. First, the seasonality of the net load increases as the PV penetration level grows, indicating the need for higher seasonal flexibility, which is addressed by a greater seasonal reliance on net imports and hydro dams. Second, the increasingly dynamic pattern of the net load on an hourly and daily basis, which emphasizes the need for fast ramping flexible capacities, is mostly covered by rapid changes from imports and exports and hydro dams. To a lesser extent, hydro pumps, hydro RoRs, PV-batteries, and demand-side management (DSM) also react rapidly to help provide the necessary supply. Additionally, higher shares of flexible PV-batteries and DSM resources successfully smooth the hourly net load and thus reduce the reliance on imports/exports for hourly flexibility. Third, tertiary reserve requirements, needed to balance the sub-hourly deviations, increase from year-to-year as new PV investments are added and are supplied by the existing Swiss dispatchable capacities. Fourth, increasing the share of non-dispatchable units has a negative effect on the system security and thus contributes to the risk of systemic failures, but this risk can be addressed with only a couple of transmission line upgrades. PV-batteries and DSM can even further reduce such risk and strengthen system security. The Nexus-e platform is a unique and powerful tool to quantify a wide range of impacts for possible future paths of the Swiss energy system. First of all, it combines bottom-up and top-down energy modeling approaches and thus represents a broader scope of the energy-economic system. This combination accounts for the complexity and interplay of energy demand-supply, macro energy-economic factors, and energy policy drivers across multiple time-scales and levels of aggregation. In terms of the modeled network levels, Nexus-e represents both the centralized and distributed levels of the energy system, which enables us to holistically assess the supply of flexibility across Switzerland at both regional and national scales. Also, Nexus-e is able to conduct simulations with a high-time resolution. The capability of modeling hourly dynamics allows us to capture new behaviors of hydro pumps, battery storage system (BSS), and DSM, which is critical for modeling the short-term demand and supply of flexibility. With such a comprehensive representation, we are able to show that Switzerland could achieve both the nuclear phase-out and RES targets while supplying sufficient flexibility and maintaining system security.