Real Options based Optimal Planning for Integrated Energy Systems under Long-term Uncertainties

Shuang Cheng; Chenghong Gu; Xinhe Yang; Junlong Li

doi:10.1109/PESGM46819.2021.9638245

Real Options based Optimal Planning for Integrated Energy Systems under Long-term Uncertainties

Shuang Cheng
, Chenghong Gu
, Xinhe Yang
, Junlong Li

Research output: Chapter or section in a book/report/conference proceeding › Chapter in a published conference proceeding

1 Citation (SciVal)

Abstract

Integrated energy system (IES) has the potential to increase the exploitation of renewable energy resources and improve overall energy efficiency. Nevertheless, demand-side uncertainties introduce high risks to the planning of IES, which cannot be resolved by traditional methods. This paper presents a novel real options (RO) based optimal planning approach for integrated electricity, natural gas system and heating systems. First, the random behaviors of load growth are captured through a stochastic module. Thereafter, the optimal planning strategy is obtained through a real option-based planning module and an optimal operation module. Both the total financial value of planning schemes and embedded strategic flexibility value are assessed. The proposed methodology is validated on a large-scale IES consisting of an IEEE 33-bus electricity system, 20-node gas system and 6-node heating system. Results illustrate the effectiveness of the proposed method in planning IES while including long-term uncertainties.

Original language	English
Title of host publication	2021 IEEE Power and Energy Society General Meeting, PESGM 2021
Publisher	IEEE
ISBN (Electronic)	9781665405072
DOIs	https://doi.org/10.1109/PESGM46819.2021.9638245
Publication status	Published - 31 Dec 2021
Event	2021 IEEE Power and Energy Society General Meeting, PESGM 2021 - Washington, USA United States Duration: 26 Jul 2021 → 29 Jul 2021

Publication series

Name	IEEE Power and Energy Society General Meeting
Volume	2021-July
ISSN (Print)	1944-9925
ISSN (Electronic)	1944-9933

Conference

Conference	2021 IEEE Power and Energy Society General Meeting, PESGM 2021
Country/Territory	USA United States
City	Washington
Period	26/07/21 → 29/07/21

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

SDG 7 Affordable and Clean Energy

Keywords

Flexibility value
Integrated energy system
Long-term uncertainty
Real options

ASJC Scopus subject areas

Energy Engineering and Power Technology
Nuclear Energy and Engineering
Renewable Energy, Sustainability and the Environment
Electrical and Electronic Engineering

Access to Document

10.1109/PESGM46819.2021.9638245

Cite this

Real Options based Optimal Planning for Integrated Energy Systems under Long-term Uncertainties. / Cheng, Shuang; Gu, Chenghong; Yang, Xinhe et al.
2021 IEEE Power and Energy Society General Meeting, PESGM 2021. IEEE, 2021. 9638245 (IEEE Power and Energy Society General Meeting; Vol. 2021-July).

Research output: Chapter or section in a book/report/conference proceeding › Chapter in a published conference proceeding

Cheng, S, Gu, C, Yang, X & Li, J 2021, Real Options based Optimal Planning for Integrated Energy Systems under Long-term Uncertainties. in 2021 IEEE Power and Energy Society General Meeting, PESGM 2021., 9638245, IEEE Power and Energy Society General Meeting, vol. 2021-July, IEEE, 2021 IEEE Power and Energy Society General Meeting, PESGM 2021, Washington, USA United States, 26/07/21. https://doi.org/10.1109/PESGM46819.2021.9638245

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title = "Real Options based Optimal Planning for Integrated Energy Systems under Long-term Uncertainties",

abstract = "Integrated energy system (IES) has the potential to increase the exploitation of renewable energy resources and improve overall energy efficiency. Nevertheless, demand-side uncertainties introduce high risks to the planning of IES, which cannot be resolved by traditional methods. This paper presents a novel real options (RO) based optimal planning approach for integrated electricity, natural gas system and heating systems. First, the random behaviors of load growth are captured through a stochastic module. Thereafter, the optimal planning strategy is obtained through a real option-based planning module and an optimal operation module. Both the total financial value of planning schemes and embedded strategic flexibility value are assessed. The proposed methodology is validated on a large-scale IES consisting of an IEEE 33-bus electricity system, 20-node gas system and 6-node heating system. Results illustrate the effectiveness of the proposed method in planning IES while including long-term uncertainties.",

keywords = "Flexibility value, Integrated energy system, Long-term uncertainty, Real options",

author = "Shuang Cheng and Chenghong Gu and Xinhe Yang and Junlong Li",

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doi = "10.1109/PESGM46819.2021.9638245",

language = "English",

series = "IEEE Power and Energy Society General Meeting",

publisher = "IEEE",

booktitle = "2021 IEEE Power and Energy Society General Meeting, PESGM 2021",

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T1 - Real Options based Optimal Planning for Integrated Energy Systems under Long-term Uncertainties

AU - Cheng, Shuang

AU - Gu, Chenghong

AU - Yang, Xinhe

AU - Li, Junlong

PY - 2021/12/31

Y1 - 2021/12/31

N2 - Integrated energy system (IES) has the potential to increase the exploitation of renewable energy resources and improve overall energy efficiency. Nevertheless, demand-side uncertainties introduce high risks to the planning of IES, which cannot be resolved by traditional methods. This paper presents a novel real options (RO) based optimal planning approach for integrated electricity, natural gas system and heating systems. First, the random behaviors of load growth are captured through a stochastic module. Thereafter, the optimal planning strategy is obtained through a real option-based planning module and an optimal operation module. Both the total financial value of planning schemes and embedded strategic flexibility value are assessed. The proposed methodology is validated on a large-scale IES consisting of an IEEE 33-bus electricity system, 20-node gas system and 6-node heating system. Results illustrate the effectiveness of the proposed method in planning IES while including long-term uncertainties.

AB - Integrated energy system (IES) has the potential to increase the exploitation of renewable energy resources and improve overall energy efficiency. Nevertheless, demand-side uncertainties introduce high risks to the planning of IES, which cannot be resolved by traditional methods. This paper presents a novel real options (RO) based optimal planning approach for integrated electricity, natural gas system and heating systems. First, the random behaviors of load growth are captured through a stochastic module. Thereafter, the optimal planning strategy is obtained through a real option-based planning module and an optimal operation module. Both the total financial value of planning schemes and embedded strategic flexibility value are assessed. The proposed methodology is validated on a large-scale IES consisting of an IEEE 33-bus electricity system, 20-node gas system and 6-node heating system. Results illustrate the effectiveness of the proposed method in planning IES while including long-term uncertainties.

KW - Flexibility value

KW - Integrated energy system

KW - Long-term uncertainty

KW - Real options

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U2 - 10.1109/PESGM46819.2021.9638245

DO - 10.1109/PESGM46819.2021.9638245

M3 - Chapter in a published conference proceeding

AN - SCOPUS:85124151181

T3 - IEEE Power and Energy Society General Meeting

BT - 2021 IEEE Power and Energy Society General Meeting, PESGM 2021

PB - IEEE

T2 - 2021 IEEE Power and Energy Society General Meeting, PESGM 2021

Y2 - 26 July 2021 through 29 July 2021

ER -

Real Options based Optimal Planning for Integrated Energy Systems under Long-term Uncertainties

Abstract

Publication series

Conference

UN SDGs

Keywords

ASJC Scopus subject areas

Access to Document

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