The value of flexibility in a future electric power distribution system

Abstract: The size and composition of the Swedish electricity generation are changing. This, in combination with new legal requirements from regulatory entities including the EU Directive 2019/944, creates several challenges for the design of the future system. Among other things, the directive suggests that flexibility solutions are to be integrated into grids to increase the degree of utilization and avoid congestions, when socio-economically profitable. This thesis evaluates what this could mean in a Swedish context, in combination with providing a basic understanding of the contradictions that can arise between a desired efficient grid use in an energy system that goes towards more distributed and intermittent energy generation sources. The work is carried out in collaboration with Vattenfall Eldistribution AB, focusing on the geographical area of Uppsala and Stockholm, the Swedish region hit hardest by local congestions. The work assumes that the economic value of a flexibility solution is at most equivalent to the cost of a conventional new construction aimed at capacity strengthening, or the Value of Lost Load (VoLL). The report’s most important deliverable is a model based on this view. The model is used to evaluate the economic value of flexibility per kWh, in three regional grid construction projects within the mentioned region.  The results show that there is a great potential for using flexibility resources to increase utilization in grids and also to optimize the costs that society pays for this infrastructure by such methods. However, the work concludes that the usage of flexible technologies primarily is to adapt electric consumption with intermittent energy generation, rather than being used to solve local grid capacity shortages.