Emerald | International Journal of Energy Sector Management

Integrating spatial models into regional energy system optimisation - focusing on biomass

2012-04-06 00:00:00.0

Abstract

Purpose - The purpose of this paper is to outline an integrative modelling approach that includes agricultural and forestry process chains in an energy system model, on a regional scale. The main focus is on land use for biomass production, aimed at satisfying the demands for energy, food, and materials.Design/methodology/approach - The described model combines geographic modelling with a linear optimisation approach. The cost-based optimisation of the energy system includes agricultural and forestry process chains. The system's commodities and processes are identified and these are linked appropriately in the specifications of the reference system. Spatial models provided geographically specific input data for the optimisation; these spatial models were based on publicly available data, regional heat and electricity demands, and regional biomass potentials. The optimisation tool was applied in two case studies.Findings - The optimisation results allow an improved understanding of the interdependencies between regional agricultural and forestry structures and the regional energy system. Future develop¬ments of the energy system can be quantified. The application of the model in the case studies has revealed the limits on biomass availability, even in rural areas, and the fossil fuel price sensitivity of an optimal system setup.Originality/value - Geographic models linked to a forecast model approach and based on publicly available data allow a high spatial resolution by taking into account the region-specific conditions and mean that the modelling approach is transferrable to other regions. This paper provides an initial insight into the linkage between bottom-up optimisation and spatial modelling, representing an innovative approach that is yet to be well explored.

Technology/Infrastructure Diffusion of Natural Gas Vehicles: the case of Shanghai

Chunjie Chi, Tieju Ma, Fujin Ning — 2012-04-06 00:00:00.0

Abstract

Purpose - Diffusion of a new technology and its required infrastructure is a complex process involving various adaptive decision makers interacting with each other, and this is extremely true in diffusion of alternative fuel vehicles. This paper aims at exploring the dynamics of alternative fuel vehicles/infrastructure diffusion through a case study about the diffusion of NGVs (Natural Gas Vehicles) in Shanghai, China.Design/methodology/approach - This paper first provides a case study of the adoption of NGVs in Shanghai. Then the major infrastructure and economic indicators, obstacles in the market penetration process are analyzed. Finally, an agent-based model is established to simulate the diffusion of NGVs in Shanghai.Findings - The findings show that several factors limited the adoption of NGV in Shanghai. The initial distribution of refueling stations can be critical to determining whether the technology/ infrastructure system survives to become mature and successful. Therefore, the strong support offered to consumers and equipment suppliers from government is important for the market penetration. These findings are also applicable to other alternative fuel vehicles such as hydrogen.Originality/value - Little real-world observations on the dynamics of alternative fuel vehicles/infrastructure have been carried out. The study can enrich people’s understanding about the dynamics of diffusion of alternative fuel vehicles/infrastructure, and gives policy implications for initializing and keeping a successful demonstration project.

DESIGN OF POWER PURCHASE UNDER TRANSMISSION CONGESTION

CIGDEM GURGUR, Emily Newes — 2012-04-06 00:00:00.0

Abstract

Purpose - The non-storable nature of electricity and the increasing complexity of financial instruments as a tool for hedging against risk make the area of research very useful in the real world. Many power portfolio optimization problems have been developed to combat the issue of risk tolerance, but very few (if any) have included transmission constraints. In this research, optimization of portfolios of real and contractual assets, including derivative instruments, in a multi-period setting is considered where transmission constraints also exist. Design/methodology/approach - Rather than using a flowgate constraint as a representation of transmission congestion, we use fixed transmission rights. A model is introduced that involves a three-node unidirectional network in order to evaluate the significance of transmission constraints. We use data from the PJM, which is located in the eastern United States for model implementation. Findings - The stochastic nonlinear mixed-integer model presented shows that transmission constraints and fixed transmission rights can have a significant effect on the choices a utility will make when dealing with power procurement. It is demonstrated that the inclusions drastically decrease the value of the objective function. Research limitations/implications - CVaR was chosen over VaR as a risk measurement for two different reasons. First, it is important to have a good representation of the tradeoff between the best expected profit and the volatility experienced when obtaining that profit. Second, it provides protection against very undesirable scenarios that may occur with low probability. In order to simplify the fixed transmission rights contracts, a three-node network is used with unidirectional flow.Practical implications - When markets were regulated, transmission lines were owned and operated by local utilities, and all power sent over the lines was either owned by the operating utility or wheeled for another utility based on existing agreements. With the advent of deregulation, utilities were forced to wheel other companies’ power, which introduced more risk in terms of transmission constraints.Originality/value - The contribution of this research is to help companies not only hedge the risk of unknown power prices but also unknown transmission congestion. One distinctive feature of our research is to expand upon existing "power portfolio optimization with risk" literature by introducing a transmission constraint into the model. Historically, transmission congestion has been modeled in different ways including flowgates, transmission rents and fixed transmission rights.

Evaluation of Renewable Energy Options for Cooling Applications

2012-04-06 00:00:00.0

Abstract

Purpose - This paper aims at assessing renewable energy based cooling technologies using multi-criteria methodology.Design/methodology/approach - Analytic Hierarchy Process ( A.H.P.) methodology is applied to obtain the ranking of renewable energy options for cooling technology using five different criteria. Seven technologies were analyzed based on the opinions obtained from experts and the extensive literature survey made and the ranking was obtained using AHP method. Findings - The present findings revealed that the ranking for the renewable energy based cooling technologies were in the following order: biomass combustion, biogas, trigeneration, SPV, biomass gasifier, solar thermal storage, and hybrid technology. Only 5 % variation in global priority exists among top three options. This variation is considered insignificant due to rapidly varying factors such as technological advancements, government promotional schemes, fuel availability etc. and hence these three options may be ranked equally. Research limitations/implications - Research output is helpful in identifying the technology with promising potential for promoting technology on a wider scale. Additional attributes and sensitivity analysis can further be included for further research. Originality/value - The AHP methodology utilized in the present study and the ranking made for the evaluation of renewable energy based cooling systems. The outcome of the present study would benefit policymakers, researchers and entrepreneurs in choosing the appropriate cooling technology.

ESTONIAN-SWEDISH WOOD FUEL TRADE & MARKET INTEGRATION: A COINTEGRATION APPROACH

Olle Olsson, Bengt Hillring, Johan Vinterbäck — 2012-04-06 00:00:00.0

Abstract

Purpose - In the Baltic Sea area, wood fuels have been traded internationally on a relatively large scale since the 1990’s, with trade flows primarily from the Baltic States to Sweden and Denmark. This has been driven by strong demand for renewable energy in Scandinavia, inexpensive wood resources in the Baltic States and relatively low costs of sea transport. In this study we attempt to clarify if this trade has contributed to integration between the wood fuel markets of Sweden and Estonia. Design/methodology/approach - We use cointegration analysis of quarterly price series data from 1998 to 2010 in order to determine whether there are interconnections between wood fuel prices in the two countries. As wood fuels generally are rather bulky, transport costs often have an important impact on price levels. For this reason we expand our analysis to include estimated transport costs from Estonia to Sweden.Findings - Our conclusion is that wood fuel prices in Sweden and Estonia are not cointegrated, regardless of whether the transportation costs are taken into account or not. In other words, the wood fuel markets in the two countries cannot be considered integrated, which could be seen as a sign that international wood fuel markets still are far from fully developed. Research limitations/implications - There are some uncertainties about data quality and lack of information on market structure – in terms of e.g. fuel delivery contract specifications and shipping arrangements. Practical implications - Lack of market integration implies a lack of market efficiency in the international wood fuel market. Originality/value - Cointegration anaysis has been applied to many commodity markets, but there are only very few studies of international wood fuel markets.

Knowledge is Power: Knowledge-Capital Model in the Management of Power Intensive Industries

Helga Kristjansdottir — 2012-04-06 00:00:00.0

Abstract

Purpose - THE PURPOSE IS TO SEEK A CLEARER UNDERSTANDING OF HOW FIRMS INVOLVED IN POWER INTENSIVE INDUSTRIES PARTICIPATE IN FOREIGN DIRECT INVESTMENT. THE PAPER SEEKS TO ANSWER THE FOLLOWING QUESTIONS: HOW SKILLED ARE THE EMPLOYEES AVAILABLE FOR HIRE? WHAT KIND OF POLLUTION RESTRICTIONS WILL BE APPLIED TO THE PLANT? IS THE INFRASTRUCTURE IN PLACE TO ENABLE FREE TRANSPORT OF THE NECESSARY MATERIALS? ALL OF THESE ARE FACTORS THAT CAN BE ANALYZED ON A NATIONAL LEVEL, AND ARE MAJOR FACTORS IN GOVERNMENT POLICY.Design/methodology/approach - THE RESEARCH IS DESIGNATED TO EXPLAIN HOW MACRO POLICY CAN BE DIRECTED TOWARDS FIRMS IN THE POWER INTENSIVE INDUSTRY, TO IMPACT THE COMPETITIVENESS WITHIN THE INDUSTRY. SKILLED LABOR DIFFERENCES IS REFLECTING GOVERNMENTAL POLICY IN ITS WILLINGNESS TO CONTRIBUTE TO EDUCATION. INFRASTRUCTURE CAN BE VIEWED AS AN INDICATOR FOR LONG TERM POLICY PLANNING BY THE GOVERNMENT. THE POLLUTION VARIABLE REFLECTS ON MACRO POLICY EMPHASIS BY GOVERNMENTS, BY PRESENTING THEIR EMISSION TARGETS. INVESTMENT COST VARIABLE GIVES INDICATION OF GOVERNMENT POLICY CONCERNING EASINESS FOR FOREIGN INVESTORS TO ENTER INTO AND INVEST IN A PARTICULAR COUNTRY.Findings - THE FINDINGS INDICATE THAT SOURCE COUNTRIES ARE ATTRACTED BY THE LEVEL OF SKILL IN ICELAND AT THE BEGINNING STAGE OF OPERATIONS WHEN FACED WITH FIXED THRESHOLD COST. ONCE THE PLANTS HAVE OVERCOME FIXED COSTS, THERE ARE POSITIVE IMPACTS ON MARGINAL INVESTMENT THE MORE SKILLED THE SOURCE COUNTRY IS COMPARED TO THE HOST. OTHER FACTORS THAT PROVED TO BE IMPORTANT IN THIS CASE STUDY ARE DISTANCE, INFRASTRUCTURE, GOVERNMENT STABILITY, POLLUTION QUOTAS, AND THE FISHING RESOURCE. Originality/value - THE RELATIVE FRIENDLINESS A COUNTRY’S POLICIES DISPLAY TOWARDS AN INDUSTRY CAN MAKE A HUGE DIFFERENCE WHEN IT COMES TO HOW SUCCESSFUL A BUSINESS CAN BE, SO STUDYING THESE NATIONAL-LEVEL POLICIES CAN HELP AN INDIVIDUAL DETERMINE WHAT KIND OF DIRECTION TO TAKE ON THE DAY-TO-DAY OPERATIONAL DECISIONS.

Long Run Energy Demand in Iran: Efficiency and Renewable Energy Scenarios

2012-04-06 00:00:00.0

Abstract

Purpose - Iran as an energy-rich country faces many challenges in the optimal utilization of its vast resources. High rates of population and economic growth, a generous subsidies program, and poor resource management have contributed to rapidly growing energy consumption and high energy intensity over the past decades. The continuing trend of rising energy consumption will bring about new challenges as it will shrink oil export revenues restraining economic activities. This calls for a study to explore alternative scenarios for the utilization of energy resources in Iran. In this study, we model demand for energy in Iran and develop two business-as-usual and efficiency scenarios for the period 2005-2030. Design/methodology/approach - We use a techno-economic or end-use approach to model energy demand in Iran for different types of energy uses and energy carriers in all sectors of the economy and forecast it under two scenarios: Business As Usual (BAU) and Efficiency.Findings - Iran has a huge potential for energy savings. Specifically, under the efficiency scenario, Iran will be able to reduce its energy consumption 40 percent by 2030.The energy intensity can also be reduced by about 60 percent to a level lower than the world average today.Research limitations/implications - The energy savings under the efficiency scenario will generate significant additional revenues and will lead to a 45 percent reduction in CO2 equivalent emissions by 2030 as compared to the BAU trend.Originality/value - This study is a comprehensive study that models the Iranian energy demand in different sectors of the economy using data at different aggregation levels and a techno-economic end-use approach to illuminate the future of energy demand under alternative scenarios.