On-demand Flexibility Utilization in a Transmission System: Analysis of technical, economic and economic regulatory aspects to establish the methodology deployment

Clean energy transition challenges transmission system operators (TSOs) to meet the demand for new grid connections, to provide adequate transmission capacity, and subsequently to manage and operate a power system with a high share of weather dependent stochastic power generation and essentially price sensitive power consumption. Conventional grid development through physical investments takes typically 3–10 years and it cannot efficiently meet the timely challenge.

This thesis presents and analyzes utilization of on-demand flexibility in a transmission system as a solution for relieving the challenge in grid integration, operational planning and congestion management. The novel on-demand flexibility utilization methodology consists of three elements: dynamic short-term thermal rating of power system components, method for securing on-demand flexibility delivery, and congestion management method to ensure system security in a required timeframe. Technical, economic and economic regulatory aspects are analyzed.

The thesis asserts that the on-demand flexibility utilization is a techno-economically efficient method to increase the utilization factor of the existing power transmission system. The method can be considered generally applicable to power systems which components (e.g. power transformers or overhead lines) have thermal inertia. On a contrary, the economic regulation analysis concludes that TSO’s efforts for flexibility utilization to defer investments would likely have a negative or at best a neutral impact on its profit. Therefore, the current Finnish economic regulation model is proposed to be amended to establish a fair share of welfare to the stakeholders. The amended regulation would enable the TSO to provide grid services with a more cost-efficient and diverse portfolio mix.

The prime driver for the flexibility utilization should be an increase in total welfare. Therefore, flexibility utilization should be incentivized whenever it is the most efficient method to increase grid service output. The on-demand flexibility utilization is a techno-economically efficient method that holds tremendous clean potential waiting to be fully leveraged. Thus, the method utilization would increase the utilization factor of the existing power system, speed up the transition to a more sustainable future, and reduce cost-efficiently the environmental impact of the whole transmission system infrastructure.