Long-term optimization of the Norwegian energy system under the influence of the European power market

• Published in: 2023 19th International Conference on the European Energy Market (EEM) pp. 1 - 6
• Main Authors: Haaskjold, Kristina, Pedrero, Raquel Alonso
• Format: Conference Proceeding
• Language: English
• Published: IEEE 06.06.2023
• Subjects: Analytical models; bidirectional linkage; Couplings; energy system model; Europe; long-term capacity expansion; Power markets; power system model; Power systems; Stochastic processes; Uncertainty
• ISSN: 2165-4093
• DOI: 10.1109/EEM58374.2023.10161972

This paper proposes a novel bidirectional linkage between a national energy system model and a European power market model. The combined modelling framework enables long-term energy system investment strategies at the national level that captures the impact and interaction with the European power system. The linking methodology is demonstrated with two models, 1) IFE-TIMES-Norway, a technology-rich model used to analyze the cost-optimal development of the Norwegian energy system, and 2) EMPIRE, a stochastic capacity expansion model optimizing operation and investments of the European power system. Two convergence criteria are used: electricity generation capacities and prices. The linkage is performed for two future transition pathways, in which convergence is reached after 3 and 4 iterations. Results indicate that the pace of convergence greatly depends on the degree of interaction with neighbouring countries, as the European prices are sensitive to the Norwegian energy mix and vice versa. The linkage also led to changes in production and export volumes in Norway, emphasizing the importance of capturing the price elasticity of Europe when designing national energy systems.