In the near future, renewable energy technologies will be the primary source of power for the European electricity grid. In order to build the optimum power infrastructure, researchers are working on how to allocate the cost of future energy systems in the most efficient way.

In accordance with the European Union’s 2030 climate and energy framework and the Paris climate agreement, the European countries have all committed to reducing their carbon emissions by 40 per cent compared to 1990 levels.

To reach this ambitious goal, the entire European energy system has to undergo a massive change in which the number of conventional centralised fossil fuel power plants is reduced in favour of various renewable technologies.

Such a shift towards a sustainable, clean energy infrastructure is strongly dependent on the system integration of renewable sources, such as wind and solar energy. For the system to function at its best, the grid infrastructure must be flexible enough to pool resources over large geographical areas, as the best wind and solar power resources are usually located far from population centres.

The big picture
This requires build-up of a complex energy grid able to sustain increasingly longrange transmission, while at the same time, developing a cost allocation model for the corresponding usage associated with power import or export by the involved countries or agents.

“To design a future system where most of the electricity derives from renewable energy sources, it is best to look at the European Union as a whole. Then, when we know what the optimal system would look like, we can develop a method for cost allocation based on flow-tracing techniques, which allocates system costs based on actual usage of the grid infrastructure. This means, for example, that if windfarms are built mainly in the north, but most of the power is exported to the south, the southern countries would be sharing the investment costs. This is the system we are currently modelling,” says PhD Student Bo Tranberg.

Bo is working on modelling the future European power grid in a way that encourages involved countries or agents to contribute to building the optimal energy system:

“We’ll be exploring which economic incentives should be in place for investments in renewable generation and transmission capacities to build on the current layout and reach a future highly renewable energy system based on the already known political goals for reduction of CO2 emissions. In other words, what is the optimal market design in this transition period until a fully renewable electricity system is reached?”