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As the world progresses towards a cleaner energy future with more variable renewable energy sources, energy system models are required to deal with new challenges. This article describes design, development and applications of the open source energy system model Balmorel, which is a result of a long and fruitful cooperation between public and private institutions within energy system research and analysis. The purpose of the article is to explain the modelling approach, to highlight strengths and challenges of the chosen approach, to create awareness about the possible applications of Balmorel as well as to inspire to new model developments and encourage new users to join the community. Some of the key strengths of the model are the flexible handling of the time and space dimensions and the combination of operation and investment optimisation. Its open source character enables diverse, worldwide applications for exploratory energy scenarios as well as policy analysis as the applications outlined demonstrate. The existing functionality and structural suitability for extensions make it a useful tool for assessing challenges of the ongoing energy transitions. Numerous model extensions have been developed as different challenges to the energy transition have arisen. One of these includes the option of running the model with unit commitment. To meet new challenges, further development is needed and consequently the article outlines suggestions for future development, such as including transport of local biomass as part of the optimisation and speeding up the model. Keywords: Open source, Energy modelling, Energy system analysis, Balmorel, Model description, Applications

This study applies a partial equilibrium forest sector model to analyse the impacts of biofuel deployment for road transport in the Nordic countries, when alternative use of the biomass resources and transport sector electrification are considered. We foresee a strong electrification of the transport sector, resulting in a demand for biofuels of approximately 2.5 billion L in 2035 and 1 billion L in 2050 in a 100% fossil-free base scenario. The simultaneous increase in demand from pulping industries and biofuel will cause an overall increase in wood use, of which the biofuels share will constitute approximately 20–25%. The utilization of harvest residues will increase more than 300% compared to the current level, since biofuel production will reallocate some of the current raw material used in district heating. Biofuel consumption in road transport will likely reduce after 2040 due to increasing electrification, but it is plausible that the declining domestic demand will be replaced by increasing demand from international biofuel markets in aviation and shipping. The main uncertainties in the scenarios are the future costs and profitability of forest-based biofuel technologies and the public acceptance of the close to 100 TWh of new renewable electricity production needed for the electrification of Nordic road transport.

European energy systems are in a period of significant transition, with the increasing shares of variable renewable energy (VRE) and less flexible fossil-based generation units as predominant factors. The supply-side changes are expected to cause large short-term electricity price volatility. More frequent periods of low electricity prices may mean that electric use in flexible heating systems will become more profitable, and such flexible heating systems may, in turn, improve the integration of increasing shares of VRE. The objective of this study is to analyze the likely future of Nordic electricity price levels and variations and how the expected prices might affect the use of electricity and thermal storage in heat-only district heating plants. We apply the North European energy market model Balmorel to provide scenarios for future hourly electricity prices in years with normal, high, and low inflow levels to the hydro power system. The simulation tool energyPRO is subsequently applied to quantify how these electricity price scenarios affect the hourly use of thermal storage and individual boilers in heat-only district heating plants located in Norway. The two studied example plants use wood chips or heat pump as base load representing common technologies for district heating in Norway. The Balmorel results show that annual differences in inflow is still a decisive factor for Norwegian and Nordic electricity prices in year 2030 and that short-term (daily) price variability is expected to increase. In the plant-level simulations, we find that tank storage, which is currently installed in only a few district heating plants in Norway, is a profitable flexibility option that will significantly reduce the use of fossil peak load in both biomass and heat-pump-based systems. Installation of an electric boiler in addition to tank storage is profitable in the heat pump system due to the limited capacity of the heat pump. Electricity will hence, to a large extent, replace gas when heat demand exceeds the capacity of the heat pump. For the bio-based plant, we find that an electric boiler in addition to tank storage is not profitable in the normal electricity price scenario. The electric boiler investments are only profitable when electricity prices are as low as in the high inflow scenario. In that case the electric boiler will provide 17% of the heat supply in the example plant. Fuel prices for peak load and electricity grid tariffs are found to be decisive factors for the electricity use – and therefore flexibility options – provided by heat-only district heating plants.

This paper investigates the effect of increased demand-side flexibility (DSF) on integration and market value of variable renewable energy sources (VRE). Using assumed potentials, system-optimal within-day shifts in demand are investigated for the Northern European power markets in 2030, applying a comprehensive partial equilibrium model with high temporal and spatial resolution. Increased DSF is found to cause only a minor (less than 3%) reduction in consumers’ cost of electricity. VRE revenues are found to increase (up to 5% and 2% for wind and solar power, respectively), and total VRE curtailment decreases by up to 7.2 TWh. Increased DSF causes only limited reductions in GHG emissions. The emission reduction is, however, sensitive to underlying assumptions. We conclude that increased DSF is a promising measure for improving VRE integration. However, low consumers’ savings imply that policies stimulating DFS will be needed to fully use the potential benefits of DSF for VRE integration.

A zero-emission pathway for the Nordic and Baltic region in Europe is described based on the comprehensive policy and scenario analyses, accompanied by energy system modelling. The analyses show that a least-cost strategy would massively employ renewable energy, particularly in the power sector. Through strong coupling across energy sectors and countries, electricity would play a central role in the decarbonization of the main energy sectors. In particular power-to-heat conversion, where heat storage appears important in addition to existing hydropower. Technical and regulatory barriers in front of increased sector coupling and flexibility were identified, and policy measures are proposed to overcome these. In addition to a high carbon price, dynamic tariffs and taxation of electricity would be important to allow market signals for flexibility to reach end-users. A stronger power transmission connection from the Nordics to the mainland-Europe and the United Kingdom would be beneficial for the emission reductions and renewable energy use. The transition pathway analysis points out socio-technical issues such as social acceptance of large-scale new infrastructures (e.g., wind, cables). The energy system optimizations indicate that most of the investments needed for the zero-emission pathway until 2050 would take place already by 2030.