Assessing the Benefits of Fossil-Free Gas Turbines in Distribution Networks : A Case Study in Västerås

Abstract: As the share of weather-dependent renewable electricity production increases, the demand for power system flexibility grows. In the Swedish power system, gas turbines have historically been utilised for back-up power generation. However, these gas turbines traditionally use fossil fuels, which limits their applications given Sweden’s target of net zero emissions of greenhouse gases. With recent technological advancements, fossil-free fuels, such as hydrogen and eMethanol have emerged as promising green alternatives, expanding the potential benefits of gas turbines in a power system. Possible applications include local bottleneck relief, providing grid inertia, voltage regulation, black start capability, and island operation capability. Market-based benefits include generating revenue by participating in both ancillary service markets and electricity markets. The benefits of a fossil-free gas turbine can be particularly valuable for distribution grids in need of strengthening, and where feed-in from the overlying grid is nearing maximum capacity. Therefore, gas turbine manufacturer Siemens Energy, and distribution network owner Mälarenergi, are interested in assessing the benefits that a fossil-free gas turbine can provide to the distribution network in Västerås, Sweden. Grid resilience benefits were evaluated through a literature study, while the market-based revenue potential were estimated using a quantitative bidding model. Included markets are the day-ahead electricity market and the ancillary service markets FCR-D, aFRR and mFRR. The model simulates the markets in 2022-2023 and uses forecasts based on historical data to determine the optimal bidding strategy. The study found that there is a large revenue potential with current fuel and market prices. The most promising configuration is a combination of eMethanol and hydrogen, with a profit potential of 72.6 MSEK/year, or a net present value of 463.2 MSEK. Operating on only hydrogen is also identified as a promising pathway. HVO100 and biomethane are, with current prices, less attractive alternatives. The results are highly sensitive to changes in costs, emphasising the importance of a diverse portfolio of fuels and potential markets for profitability. However, grid resilience benefits provide an incentive to invest in a fossil-free gas turbine, regardless of market-based revenue potential. As a suggested course of action, HVO100 or biomethane can be utilised during a transition period while the technology and infrastructure for hydrogen and eMethanol are being developed. Lastly, other technologies may offer certain services at a competitive cost, but the strength of the gas turbine lies in its extensive range of capabilities.