ENERGY ECONOMICS AND POLICY FS 11

Exploring parallel layers of commodities in energy systems
MARIA KANINIA
June 9, 2011
WORKING DRAFT
Abstract
Within the energy system, the natural gas and electricity markets can both be represented as grid-
bound networks. We can imagine these networks as horizontal network topologies. Because of the
interactions between the markets for natural gas and electricity, the networks are linked via several
vertical interconnections between interface points (energy hubs). An interesting characteristic of both
markets is that they are liable to congestion due to the limited capacity of the respective transmission
networks. Also, price variations in one market may have effects on a linked market. Understanding the
cross-effects between the networks is important for efficient planning of future expansion of the network
infrastructure.
Thus, the first target of this paper is to explore these cross-effects, using a static version of the linked
models. The second target is to implement a dynamic version of the model (taking into consideration
new investment in infrastructure expansion) and observe how the investment decisions are influenced by
congestion and cross-network linkages.
This paper uses a simplified partial-equilibrium model involving the natural gas and electricity sec-
tors of the energy system on a European-wide scale to explore several cases, including disruption of
natural gas supply (e.g. because of geopolitical reasons, as occurred in January 2009) and effects of
environmental policies (e.g. increases in the price of allowances for carbon dioxide emissions, a cap on
emissions or a combination thereof, emulating the EU Emissions Trading System).
Keywords: network, energy hub, natural gas, electricity
1
1 Introduction
The interaction between the markets for different energy carriers (such as natural gas and electricity) is
complicated and occurs at several interface points.
Taking the example that is analysed here: In the electricity supply chain, natural gas is located upstream
of electricity, since it can be used as fuel for electricity generation. However, it is also encountered down-
stream, in the sense that these energy carriers are substitutes, competing to cover final energy demand (e.g.
for heat production). The degree of substitution that can be achieved depends on the sector (industrial,
residential, commercial or transportation) and the time scale. The interface point is depicted in 1.
Figure 1: Representation of an energy hub with natural gas and electricity as inputs.
Why is it pertinent to investigate the linkage between the networks of these commodities?
First, in European countries, the share of natural gas as fuel for electricity production ranges from rather
low (e.g. in Germany, for the year 2008, the percentage of electricity production from natural gas was
13.8% and in France only 3.8%) to significant (e.g. 54.1% in Italy and 38.8% in Spain for the same year,
[10]). However, even in countries with low usage of natural gas in the electricity generation mix, natural
gas fueled plants are typically used for mid and peak load (especially through combined cycle gas turbines).
These plants are often marginal in terms of merit order (see figure 3). So their marginal cost (fuel price)
affects the electricity market price.
Figure 2 shows an example of the correlation between prices for the two commodities.
Inversely, the percentage of the Total Primary Energy Supply of natural gas that is used as fuel for
electricity production is substantial (31.9% for EU-27, year 2008, source: [7]). Thus, developments in the
electricity sector will also reflect upon the natural gas market.
The mathematical description of the static version of the partial-equilibrium model which is used to
examine these interactions has been adapted from [3]. First, each market is modeled independently, taking
into consideration the relevant agents which act in each market. Then, additional relationships are introduced
to show the linkage between the networks.
There exist common characteristics in the representation of both commodity markets, such as the be-
haviour of producers (who attempt to maximise their profit subject to their limited production capacity)
and of consumers. Consumers are governed by their linear demand function (calibrated based on reference
values (
¯
P
D
,
¯
Q
D
) and an assumed global elasticity ǫ, according to equation 1). Furthermore, each market is
managed by a single operator who is assumed to be responsible for clearing the market; the operator also
determines investments for capacity expansion in the case of the dynamic model.
Q
D
=
¯
Q
D
¸
1 −ǫ

P
D
¯
P
D
−1

=
¯
Q
D
(1 +ǫ)
. .. .
a

¯
Q
D
ǫ
¯
P
D
. .. .
b: slope
P (1)
1
Figure 2: Scatter plot for monthly prices of electricity vs natural gas. The value of the correlation (0.49) is
lower than expected because the data series refer to different areas (due to unavailability of data). Sources:
PowerNext gas futures monthly index, NordPoolSpot Elspot system price.
2 Electricity model
The electricity model assumes a single artificial node (denoted as e ∈ E) per area market, or UCTE control
area. It is also assumed that there exists a single connection between physically connected neighbors. This
means that all cross-border lines are aggregated as a (bi-directional) lump Transmission Capacity. These
transmission links are denoted as l
ij
= (e
i
, e
j
) ∈ E ×E.
The country-nodes are characterised by their production portfolio and their electricity demand. It is
assumed that all generators and producers interact through a single network operator in a competitive market.
The model takes into account physical flows (as opposed to commercial exchanges) along transmission
lines. The physical power flows are determined by the power supply and extraction at production and
consumption nodes, respectively, as well as by the technical characteristics of the network (topology, as
indicated by the admittance matrix, and line capacities).
Power flows can be calculated according to the simplified lossless DC method, which states that the
active power flow in line (i, j) is given by the relationship P
ij
=
θ
i
−θ
j
x
i,j
, where θ
i
is the voltage angle at
node (bus) i and x
i,j
the reactance of the line. In matrix form it can be expressed as:
P = B

Θ (2)
where P = [P
1
. . . P
i
. . . P
N
] is the vector of net injections, B

is the nodal admittance matrix of di-
mensions N ×N (considering only the reactance values) and Θ = [θ
1
. . . θ
i
. . . θ
N
] is the vector of voltage
angles ([4]).
Based on the DC power flow model, a set of PTDF
1
values is derived, according to the following
1
The “Power Transmission Distribution Factor” value PTDF(e, e
i
, e
j
) for node e and line l
ij
= (e
i
, e
j
) expresses the power
flow that would occur on line e
i
→e
j
if 1 MW was injected at node e, given an initial state of the network. It basically corresponds
2
Figure 3: Typical merit order for electricity generation plants.
GENERATION CONSUMPTION
transmission
TSO
Figure 4: Aggregated agents in the electricity market model
formula, where X
m,n
is an element of the reactance matrix:
PTDF(l
i,j
, e) =
X
i,0
−X
j,0
−(X
i,e
−X
j,e
)
x
i,j
(3)
Subsequently, it is assumed that an imaginary central hub (denoted with 0 in the equation above) con-
nects all the nodes (see Figure 5). So, exports and imports Y (e) (commercial exchanges) are routed from
node e through the virtual hub (along virtual links with infinite capacity originating at the hub). The pre-
calculated PTDF values are used to find the (physical) flows F(l) which are induced along the actual lines l
because of the commercial flow Y (e):
F(l) = PTDF(l, e)Y (e) (4)
node #1 node #i node #N
prod_1
VIRTUAL HUB
cons_1 prod_i cons_i prod_N cons_N
Figure 5: Model based on single virtual hub for handling cross-border transmission.
to the derivative (sensitivity) of the line flow for line l with respect to a change in injection at node e.
3
Table 1: Agents in the electricity model
agents objective
producers max
X
el
(e,i)
¸
i
¸
PT
el
(e) +PHUB −
¸
f
p
fuel
(f) +θ(f)p
emi
η(f, i)

transmission system operator max
Y (e)
¸
e
PT
el
(e)Y (e)
final consumers [satisfy final demand]
The electricity price as perceived by a final consumer at node e comprises two components: The price
for energy, which is unique and determined as the shadow value of the market clearing equation at the virtual
hub for the entire network, and the transmission fee PT
el
(e) from the hub to node e, which can be positive
or negative. A linear demand curve is assumed:
DEM
el
(e) = a
el
(e) +b
el
(e)(PT
el
(e) +PHUB
. .. .
total nodal price: P
el
(e)
) ⊥ DEM
el
(e) ≥ 0 (5)
At each node e, the power producers maximise their profit subject to the available capacity constraint
by plant type (technology) i, given the exogenously determined prices for fuel p
fuel
(f) and emission al-
lowances p
emi
, the efficiency (or, inversely, the heat rate) for each technology η(f, i) and the emission
coefficients θ(f).
¸
f
p
fuel
(f) +θ(f)p
emi
η(f, i)
+PC
el
(e, i) ≥ PT
el
e
+PHUB ⊥ X
el
(i, e)
. .. .
production
≥ 0 (6)
cap
el
(e, i) ≥ X
el
(e, i) ⊥ PC
el
(e, i)
. .. .
scarcity price of production capacity
≥ 0 (7)
The market clearing condition is:
¸
(e,i):cap
el
(e,i)>0
X
el
(e, i) ≥
¸
e
DEM
el
(e) ⊥ PHUB
. .. .
commodity price at virtual hub
≥ 0 (8)
The equilibrium at each node requires that the energy Y (e) exported (or imported) from (to) a certain
node equals the difference between the local generation and demand:
Y (e) =
¸
i
X
el
(e, i) −DEM
el
(e) ⊥ PT
el
(e) (9)
The optimisation problem for the network operator is to maximise his revenue (making the assumption
that the network operating costs are zero), given the available line capacities.
There are two symmetrical constraints (only one of which can be activated) regarding the bi-directional
transmission line capacities:
¸
e
PTDF(l, e)Y (e)
. .. .
physical flow on line l
≤ cap
line
(l) ⊥ PC
+
(l) (10)
4

¸
e
PTDF(l, e)Y (e) ≥ −cap
line
(l) ⊥ PC

(l) (11)
The shadow prices of transmission constraints PC
+
(l) and PC

(l) serve as indicators for future ca-
pacity expansion.
The zero-profit condition of the transmission system operator is:
PT
el
(e) =
¸
l
PTDF(l, e)(PC
+
(l) −PC

(l)) ⊥ Y (e) ∀e ∈ E (12)
2.1 Data
For experimentation purposes, a simplified UCTE power system model is used, based on [12]. It consists of
20 nodes, each corresponding to an aggregated control area or country, and depicts cross-border transmission
lines. The sparse matrix showing the transmission links corresponding to the 20-node network is shown in
figure 7. The cross-border transmission capacities for the 20-node interconnected system are given by the
“Indicative values for Net Transfer Capacities (NTC) in Europe” ([6]).
The demand data for each aggregated area (node) is provided from [1]. For the static version of the
model, an indicative average load value (for the hour 12:00 in July 2010) has been used (as a simplification,
instead of representing the load duration curve using load segments). The drawback of this simplified
approach is that it is not possible to capture the effect of intermittent power input and of fluctuating demand.
The portfolio of generating capacity for each node is based on data by ENTSOE ([2]).
In terms of natural gas supply, each electricity node can be supplied from at least one gas trading node
(as indicated by the mapping function GE(g, e)).
Figure 6: Simplified interconnected system for electricity transmission with 20 nodes, source: [12].
5
Figure 7: The elements of the sparse matrix corresponds to the lines in the interconnected system shown in
figure [6].
3 Natural gas model
The natural gas market is described as a set of nodes g ∈ G which are linked through pipelines. The
flow of natural gas in the pipelines F
pipe
(g, h) is unidirectional from node g to node h (determined by
compressors) and constrained by the available capacity cap
pipe
(g, h). We assume that there is a single
independent network operator that controls the entire network.
In terms of economic behaviour, the model is defined by the individual optimisation problem for each
agent (see table 3) and the market-clearing equations.
Traders
Pipeline Network Operator
PROD_1
PROD_m
PROD_M
Producers
CONS_1
CONS_n
CONS_N
Consumers
Figure 8: Schematic of the agents taken into account for the natural gas model
Producers (assuming a single producer per node) aim at maximising their profits by selecting to extract
6
Table 2: Agents in the natural gas model
agents objective
producers max
X
gas
(g)
(PS
gas
(g) −c
gas
(g))X
gas
(g)
pipeline operator max
F
pipe
(g,h)

¸
g,h
(PT
pipe
(g, h) −c
pipe
(g, h))F
pipe
(g, h)

traders [maximise profit]
final consumers [satisfy final demand]
quantity X
gas
(g) under constraint of the available extraction capacity:
PC
gas
(g)
. .. .
scarcity price for production
≥ PS
gas
(g)
. .. .
supply price
−c
gas
(g) ⊥ X
gas
(g) ∀g ∈ G
prod
⊂ G (13)
cap
gas
(g) ≥ X
gas
(g) ⊥ PC
gas
(g) ≥ 0 (14)
The pipeline operator maximises his profit, restricted by the existing pipeline capacity:
PC
pipe
(g, h) ≥ PT
pipe
(g, h)
. .. .
transportation price
−c
pipe
(g, h) ⊥ F
pipe
(g, h) ≥ 0 (15)
cap
pipe
(g, h) ≥ F
pipe
(g, h) ⊥ PC
pipe
(g, h) ≥ 0 (16)
The final demand at each consumption node is expressed by a linear demand curve:
DEM
gas
(g) = a
gas
(g) +b
gas
(g)PD
gas
(g) ⊥ DEM
gas
(g) ≥ 0 ∀g ∈ G
cons
⊂ G (17)
Final consumers are served by traders, which must provide the demanded quantity (procured at pro-
duction nodes). The market-clearing condition for each (consumption) demand node (where T
gas
(h, g)
corresponds to a trade flow and not to a physical flow) is:
¸
h
T
gas
(h, g)
. .. .
traded quantity, delivery at node g
≥ DEM
gas
(g) ⊥ PD
gas
(g) ≥ 0 ∀g ∈ G
cons
⊂ G (18)
The traders are supplied with gas from the producers and subsequently transfer the demanded quantities
to the consumers through the pipelines. The transportation service from node g to node h is priced at
PT
pipe
(g, h) (payable to the single pipeline network operator). The property of flow conservation must
apply for each node:
¸
g
F
gas
(gg, g, h) + T
buy
(gg)

gg=h
=
¸
g
F
gas
(gg, h, g) +T
gas
(gg, h) ⊥ PN
gas
(gg, h) ∀(gg, h)
(19)
The physical flow along each pipeline segment (constrained according to 16) is given by:
F
pipe
(g, h) ≥
¸
gg
F
gas
(gg, g, h) (20)
Based on this model of the network, the price PN
gas
(gg, h) of natural gas (expressed as the shadow
price of the flow conservation equation 19) is different at each node h (nodal pricing). Also, at the same
7
node, there are different prices for different “qualities” of natural gas (depending on the production node gg).
However, these price differences are “absorbed”, so that the final consumer perceives price homogeneity.
In addition to the agents described here, a realistic model should also include storage nodes and LNG
liquefaction and regasification nodes ([5]). Because we assume that no storage capacity is available, seasonal
demand fluctuations are ignored (average hourly quantities referring to a certain year in GWh/h are used
instead).
3.1 Data
The natural gas network is represented as a graph. For simplicity, the actual network has been condensed
into a 3x3 network, following [9]. Production nodes outside continental Europe are only taken into account
as sources of supply, but their inland consumption is ignored. The incidence matrix describing the test
network is shown in table 3.1.
Table 3: Incidence matrix for the natural gas model
RUS NOR ALG GER FRA ITA
RUS 1
NOR 1 1
ALG 1 1
GER 1 1
FRA
ITA 1
The model for the natural gas market will be expanded to include a realistic representation of the network
([11]) as well as LNG trading.
4 Interconnection between the natural gas and electricity models
In order to express the linkage between the two energy carrier networks, the following changes are applied:
• In the natural gas network, the demand becomes endogenous. Thus, equation [18] is modified to
divide natural gas demand into two parts: The demand from power producers and other demand (e.g.
from the residential or industrial sector).
¸
h
T
gas
(h, g) ≥
¸
e:GE(g,e)
X
el
(e, NGS)
η(f = NGS, i = NGS)
. .. .
demand from power plants
+ DEM
gas
(g)
. .. .
demand from other sectors
⊥ PD
gas
(g) ≥ 0
(21)
• In the electricity network, the price of natural gas as a fuel for electricity production becomes endoge-
nous. For nodes with production capacity from natural gas plants, the following modified equation
(which replaces [6]) must hold true:
¸
g:GE(g,e)
PD
gas
(g) +θ(i = ’NGS’)p
emi
η(f = ’NGS’, i = ’NGS’)
+PC
el
(e) ≥ PT
el
(e)+PHUB ⊥ X
el
(e, i = ’NGS’) ≥ 0
(22)
8
For power plants that are not fueled with natural gas (i = NGS), the price of the respective fuel
remains an exogenous variable (equation [6]).
5 Model
The model has been formulated as a Linear Mixed Complementarity Problem in the GAMS modeling sys-
tem. It is solved numerically using the Newton-based PATH solver ([8]).
5.1 MCP
Formally, the Mixed Complementarity Problem is defined as:
find x ∈ D subject to F(x), y −x ≥ 0, ∀y ∈ {x ∈ ℜ
n
| l ≤ x ≤ u} (23)
If l = −∞and u = +∞then problem [23] becomes a nonlinear equations system:
F(x) = 0, x ∈ ℜ
n
If l = 0 and u = +∞then problem [23] is equivalent to a nonlinear complementarity problem:
F(x) ≥ 0 ⊥ x ≥ 0
The equations used to describe the natural gas and electricity markets for this model were derived from
the Karush-Kuhn-Tucker (first-order optimality) conditions of the optimisation problems faced by each
agent. For each profit maximisation problem, the complementary variable represents an activity output
or flow (e.g. quantity of energy commodity that is produced, traded or transported). For each clearing
equation, the corresponding variable is a price (e.g. scarcity price of available infrastructure or commodity
price).
6 Results
6.1 Case A: Restricted supply of natural gas
By simulating a reduction in the quantity that is imported from the eastern (Russia) and south (North Africa)
interconnections, it is expected (according to equation [22]) that the price of natural gas will increase,
thereby driving the price of electricity up. Intuitively, it is also expected that in a more advanced version of
the model, including seasonal variations and storage capacity, the shadow value of existing storage capacity
would increase.
6.2 Case B: Increased price of emission allowances
In this case, we assume that the price for carbon dioxide emission certificates (exogenous variable) within
the context of the EU ETS is high enough to motivate electricity producers to switch to a less carbon-
intensive fuel portfolio (including natural gas fueled production). Therefore, it is expected that the demand
for natural gas will increase, according to equation [21], thus increasing the “pressure” (as expressed by
the scarcity price PC
pipe
(g, h)) at the congestion points of the natural gas network. By performing a series
of counterfactual runs of the model at different carbon prices, we derive useful observations regarding the
increase of the demand for natural gas (because of the inter-fuel substitution of carbon-intensive fuel in the
power sector).
9
Figure 9: Representation of an energy hub with natural gas and electricity as inputs.
7 Conclusion
It has been shown that the markets for natural gas and electricity interact, because the two commodities
are substitutes at the final energy demand level while natural gas is also an input for electricity production.
The infrastructure-bound nature of the markets creates further complications, since an activated capacity
constraint in one market can influence the state of the other market.
Thus, we conclude that it is especially meaningful to examine the two markets in conjunction through a
partial equilibrium model, which reveals important properties of this interaction.
10
References
[1] ENTSOE statistical database. https://www.entsoe.eu/resources/data-portal/; accessed April 19, 2011.
[2] ENTSOE statistical yearbook 2009. https://www.entsoe.eu/resources/publications/entso-e/statistical-
yearbooks/; accessed April 19, 2011.
[3] Jan Abrell and Hannes Weigt. Combining energy networks. Electricity Markets Working Papers WP-
EM-38, Available at SSRN: http://ssrn.com/abstract=1550712, 2010.
[4] G. Andersson. Modelling and Analysis of Electric Power Systems, Lecture 227-0526-00. ITET ETH
Zurich, EEH - Power Systems Laboratory, 2010.
[5] Egging, Gabriel, Holz, and Zhuang. A complementarity model for the european natural gas market.
1st CESSA conference, Berlin, Available at http://www.cessa.eu.com/?group=publications, 2007.
[6] ENTSOE. NTC matrix. https://www.entsoe.eu/resources/ntc-values/ntc-matrix/; accessed April 19,
2011, 2010.
[7] Eurostat. Energy balance sheets 2007-2008 KS-EN-10-001-EN-N, page 268. European Union, 2010.
[8] Michael C. Ferris and Todd S. Munson. PATH 4.6 solver manual.
http://www.gams.com/solvers/solvers.htm, 2011.
[9] Franziska Holz. Modeling the European Natural Gas Market - Static and Dynamic Perspectives of
an Oligopolistic Market. PhD thesis, Technische Universitaet Berlin - School VII Economics and
Management, 2009.
[10] IEA. Electricity/heat data. http://www.iea.org/stats/; accessed April 19, 2011, 2008.
[11] A. Neumann, N. Viehrig, and H. Weigt. Intragas - a stylized model of the european natural gas network.
Dresden University of Technology Resource Market Working Paper WP-RM-16, 2009.
[12] A. Papaemmanouil, Le Anh Tuan, G. Andersson, L. Bertling, and F. Johnsson. A cost-benefit analysis
of transmission network reinforcement driven by generation capacity expansion. Power and Energy
Society General Meeting, IEEE, 2010.
11
A GAMS code
*
ENERGY ECONOMICS AND POLICY - HS2011
*
MARIA KANINIA
*
-------------------------------------------------------------------------------
$eolcom //
$setglobal fin inXLS.xls // input xls file
$setglobal fout outXLS.xls // output xls file
$setglobal gdxin inGDX.gdx
$setglobal gdxout outGDX.gdx
*
directories of building blocks to be imported - exported excel <--> gdx
$setglobal dirIn dirIn.txt // imported data coordinates - xls file
$setglobal dirOut dirOut.txt // exported data coordinates - xls file
set g ng_nodes /
RUS,NOR,ALG,
GER,FRA,ITA
/
alias (g,h,gg);
set g_prod(g) subset - ngas producers /RUS,NOR,ALG/;
set g_cons(g) subset - ngas consumers /GER,FRA,ITA/;
set e electricity network nodes (aggregated areas);
alias (e,ee,ei,ej);
*
mapping_1:
*
(i) electricity production nodes where natural gas is used as fuel
*
(ii) gas trading nodes
set GE(g,e) mapping_1;
*
mapping_2: sparse matrix populated with boolean values
*
represents the links (transmission network) in the electricity market
set EL(e,ee) cross-border capacities;
set i plant types /
HYD
NUC
CLG
NGS
/
set iNGS plant types fuelled by NGS
/
NGS
/
set fu fuels /
HYD
NUC
CLG
NGS
OIL
/
parameter
el_data(e,
*
) (auxiliary) parameters for nodes of electricity network
a_el(e) constant-1 for electricity linear demand curve (GWh per hour)
b_el(e) constant-2 for electricity linear demand curve (neg-slope)
gas_data(
*
,
*
) (auxiliary) parameters for gas network nodes
a_gas(g_cons) constant for n-gas demand curve
b_gas(g_cons) constant for n-gas demand curve (slope)
gas_cap_data(g,
*
,h) (auxiliary) parameters
cap_gas(g_prod) extraction capacity
c_gas(g_prod) extraction price
fuel_data(fu,
*
) (auxiliary) parameters for fuel data
pf(fu) fuel price (Euro | MWth)
theta(fu) emission coefficient (t-CO2 | MWth)
cap_line_el(e,ee) electrical transmission capacity
c_pipe(g,h) pipeline transportation cost
cap_pipe(g,h) pipeline capacity | uni-directional flows
cap_el(e,i) generation capacity by plant type;
table eff(fu,i)
HYD NUC CLG NGS
HYD 0.8
NUC 0.7
CLG 0.4
NGS 0.5
;
12
*
IMPORT_DATA_XLS_BEGIN----------------------------------------------------------
*
compilation phase--------------------------------------------------------------
*
load data
$call GDXXRW I=%fin% O=%gdxin% @%dirIn%
$gdxin %gdxin%
$load e, GE, EL
$load el_data, cap_el
$load gas_data, gas_cap_data, fuel_data
$gdxin
;
*
IMPORT_DATA_XLS_END------------------------------------------------------------
*
process parameters from input file
a_el(e) = el_data(e,’EL_DEM_a’);
b_el(e) = el_data(e,’EL_DEM_b’);
a_gas(g_cons) = gas_data(g_cons, ’GAS_DEM_a’);
b_gas(g_cons) = gas_data(g_cons, ’GAS_DEM_b’);
cap_gas(g_prod) = gas_data(g_prod, ’cap_gas’);
c_gas(g_prod) = gas_data(g_prod, ’c_gas’);
c_pipe(g,h) = gas_cap_data(g, ’c_pipe’, h);
cap_pipe(g,h) = gas_cap_data(g, ’cap_pipe’, h);
pf(fu) = fuel_data(fu, ’pf’);
theta(fu) = fuel_data(fu, ’theta’);
*
temporary assignment
cap_line_el(e,ee) = 1e+8 $(EL(e,ee));
execute_unload ’outGDX.gdx’, fuel_data, theta;
$exit
table PTDF(l,e)
DE FR IT
line1 0.5 0.5 0.5
line2 0.5 0.5 0.5
line3 0.5 0.5 0.5
;
positive variables
DEM_gas(g_cons) demand of final consumers for n-gas
PD(g) price for n-gas (consumption node)
PS(g) price for n-gas (production node)
XTR_gas(g) extraction quantity
PC_gas(g) scarcity price of extraction capacity
F_pipe(g,h) flow of n-gas along pipeline g-->h
PC_pipe(g,h) scarcity price of pipeline capacity g-->h
PT_pipe(g,h) price of pipeline transportation service g-->h
T_buy(g) quantity of n-gas bought by trader at node g
T(g,h) quantity traded (g:buy h:sell)
F(gg,g,h) quantity bought at node gg to be transported g-->h
DEM_el(e) demand of final consumers for electricity
PT_el(e) transmission fee chargeable at node e (congestion fee)
PHUB marginal energy price (entire system)
X_el(e,i) electricity generated at node e by plant type i
PC_el(e,i) scarcity price of capacity for plant type i
;
*
free
variables
PN(gg,h) nodal price (at node h) of n-gas bought at node gg
Y(e) electrical energy transported from node e to hub
PCl_pos(ei,ej) scarcity price of line capacity - direction ei-->ej
PCl_neg(ei,ej) scarcity price of line capacity - inv. direction ej-->ei
;
*
fixed variables
XTR_gas.fx(g)$(not g_prod(g)) = 0;
PD.fx(g)$(not g_cons(g)) = 0;
F_pipe.fx(g,h)$(cap_pipe(g,h) = 0) = 0;
PT_pipe.fx(g,h)$(cap_pipe(g,h) = 0) = 0;
equations
*
section_A: natural gas model
d_gas(g_cons) linear demand curve of final consumers for n-gas
xtr_cap_gas(g) extraction capacity constraint
zp_gas_prod(g) zero-profit condition | n-gas production
pipe_cap_gas(g,h) pipeline capacity constraint
zp_pipe_flow(g,h) zero-profit condition | pipeline flow
s_eql(g) equilibrium at supply market
zp_purch_gas(gg,h) zero-profit condition | purchased amount
13
zp_sold_gas(g) zero-profit condition | sold amount
zp_pipe(gg,g,h) zero-profit condition | pipeline
flow_cnsrv(gg,h) flow conservation
pipe_clr(g,h) market clearing condition | pipeline flow
*
linkage equation 1
dq_gas(g) clear demand market | trading
*
section_B: electricity model
d_el(e) linear demand curve of final consumers for electricity
el_gen_cap(e,i) electricity generation capacity constraint
el_mrkt_clr electricity market clearing condition
el_equil(e) equilibrium at each node
el_line_cap_pos(ei,ej) capacity constraint el-line-pos
el_line_cap_neg(ei,ej) capacity constraint el-line-neg
zp_tso(e) zero-profit condition | transmission system operator
*
linkage equation 2
***
zp_gen(e,i) zero-profit | generator (distinguish between ’NGS’ fuelled power plants and otherss)
;
*
section_A: natural gas model
d_gas(g_cons).. DEM_gas(g_cons) =e= a_gas(g_cons) + b_gas(g_cons)
*
PD(g_cons);
xtr_cap_gas(g_prod).. cap_gas(g_prod) =g= XTR_gas(g_prod);
zp_gas_prod(g_prod).. c_gas(g_prod) + PC_gas(g_prod) =g= PS(g_prod);
pipe_cap_gas(g,h).. cap_pipe(g,h) =g= F_pipe(g,h);
zp_pipe_flow(g,h).. c_pipe(g,h) + PC_pipe(g,h) =g= PT_pipe(g,h);
s_eql(g).. XTR_gas(g) =g= T_buy(g);
zp_purch_gas(gg,g).. PN(gg,g) =g= PD(g);
zp_sold_gas(g).. PS(g) =g= PN(g,g);
zp_pipe(gg,g,h).. PT_pipe(g,h) + PN(gg,g) =g= PN(gg,h);
*
unity matrix removed
flow_cnsrv(gg,h).. sum(g,F(gg,g,h)) + T_buy(gg)$(ord(gg) eq ord(h)) =e= sum(g,F(gg,h,g)) + T(gg,h);
pipe_clr(g,h).. F_pipe(g,h) =g= sum(gg, F(gg,g,h));
*
linkage equation 1
dq_gas(g_cons).. sum(h, T(h,g_cons)) =g= DEM_gas(g_cons)+sum(e$GE(g_cons,e),X_el(e,’NGS’)/eff(’NGS’,’NGS’));
*
section_B: electricity model
d_el(e).. DEM_el(e) =e= a_el(e) + b_el(e)
*
(PT_el(e) + PHUB);
el_gen_cap(e,i).. cap_el(e,i) =g= X_el(e,i);
el_mrkt_clr.. sum(i,sum(e, X_el(e,i))) =g= sum(e, DEM_el(e));
el_line_cap_pos(ei,ej)$EL(ei,ej)..
sum(e, PTDF(ei,ej,e)
*
Y(e)) =l= cap_line_el(ei,ej);
el_line_cap_neg(ei,ej)$EL(ei,ej)..
-sum(e, PTDF(ei,ej,e)
*
Y(e)) =g= -cap_line_el(ei,ej);
zp_tso(e).. PT_el(e) =e= sum((ei,ej)$EL(ei,ej),PTDF(ei,ej,e)
*
(PCl_pos(ei,ej)-PCl_neg(ei,ej)));
el_equil(e).. Y(e) =e= sum(i,X_el(e,i))-DEM_el(e);
*
linkage equation 2
***
attention re: multi-input production plants
zp_gen(e,i).. sum(fu$(eff(fu,i) gt 0), pf(fu)/eff(fu,i))$(not iNGS(i))
+ sum(g$GE(g,e),PD(g)/eff(’NGS’,i))$iNGS(i)
+ PC_el(e,i) =g= PT_el(e) + PHUB;
model ngasmod
/
d_gas.DEM_gas,
xtr_cap_gas.PC_gas,
zp_gas_prod.XTR_gas,
dq_gas.PD,
pipe_cap_gas.PC_pipe,
zp_pipe_flow.F_pipe,
s_eql.PS,
zp_purch_gas.T,
zp_sold_gas.T_buy,
zp_pipe.F,
flow_cnsrv.PN,
pipe_clr.PT_pipe,
d_el.DEM_el,
el_gen_cap.PC_el,
el_mrkt_clr.PHUB,
el_line_cap_pos.PCl_pos,
el_line_cap_neg.PCl_neg,
zp_tso.Y,
el_equil.PT_el,
zp_gen.X_el
/;
solve ngasmod using mcp;
%result processing
14

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