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Unlocking the potential

of Energy Systems Integration

An Energy Futures Lab Briefing Paper


Dr Richard Hanna
Dr Evangelos Gazis
Dr Jacqueline Edge
Dr Aidan Rhodes
Dr Rob Gross
Unlocking the potential
of Energy Systems Integration

Energy Futures Lab


Energy Futures Lab is an institute of Imperial College London founded in 2005 to develop
multidisciplinary, cross-faculty collaborations to tackle the broad range of energy challenges that
the world faces. The institute is a small team of dedicated professionals that assists in building
connections, coordinating projects and highlighting successes at the College.

The Energy Futures Lab Briefing Papers are periodic reports aimed at all stakeholders in the energy
sector. They bring together expertise from across Imperial College London to provide clarity on a
wide range of energy topics.

For more information visit: http://imperial.ac.uk/energy-futures-lab

Contents
EXECUTIVE SUMMARY 3
1 INTRODUCTION 4
2 ENERGY SYSTEMS INTEGRATION:
DEFINITIONS AND TECHNOLOGIES 5
2.1 Introduction and definition 5
2.2 Types of Energy System Integration 6
2.3 Scale 12
3 POTENTIAL BENEFITS OF ENERGY SYSTEMS INTEGRATION 13
3.1 Efficient use of resources 13
3.2 Decarbonisation 14
3.3 Improved system security and operation 14
3.4 Cost reduction 17
3.5 Service Provision 17
4 REALISING ENERGY SYSTEMS INTEGRATION 18
4.1 The role of the power grid 18
4.2 The role of the gas network 18
4.3 The role of district heating networks 20
4.4 The potential role of hydrogen 22
4.5 The role of transport 22
5 POLICY, MODELLING AND RESEARCH OPPORTUNITIES 24
5.1 Policy Opportunities 24
5.2 Modelling Opportunities 25
5.3 Research opportunities 28
6 CONCLUSIONS 30
Contents

6.1 Key points 30


7 LIST OF ACRONYMS 31
8 ANNEX: METHODOLOGY:
THE RAPID EVIDENCE REVIEW APPROACH 32
9 REFERENCES 34

2
Executive Summary There are many challenges involved, however, in
realising the potential of ESI. These include, but are
Energy Systems Integration (ESI), in general, not limited to:
refers to the connecting and combining of a wide
range of energy services and systems in order to » The complexity of highly integrated energy
maximise energy use and minimise waste and systems
carbon emissions. Building an energy system using » A possible need to change institutions, ownership
ESI could be a potentially cost-effective way to and markets
decarbonise the multiple facets of our energy sector,
use limited resources in a sustainable way and » The multidisciplinary efforts in research and
produce a more resilient system by incorporating development that will be required to bring about a
greater flexibility and diversifying energy sources. fully integrated, low-carbon energy system

Potential benefits of ESI include more efficient Strong policy support will be required to realise the
use of energy resources, especially in capturing benefits of ESI. Innovation in the design of markets,
and using waste heat, aiding decarbonisation policies and regulation is required to facilitate
by enabling electricity and lower-carbon fuels to coordination between different energy systems and
provide energy services traditionally provided by realise the potential benefits of energy systems
higher-carbon sources, and increase system security integration.
and resilience by allowing the incorporation of a
Market arrangements will need to be changed
more diverse set of energy sources.
so that they reward new and different types of
A further anticipated benefit of ESI is a reduction in flexibility, for example by improving the business
the capital and operational costs of energy networks case for power companies to invest in more flexible
through exploitation of the greater flexibility offered and hybrid generation and conversion technologies.
by integration – although there is little evidence to A whole systems approach, in which one single
support a quantification of this benefit at this stage. party has responsibility for optimising technical
performance, may be required.
ESI is made possible by three categories of
technologies: Research into the benefits of enabling technologies,
such as energy storage, microgrids and demand-
» Smart operations and Information and side response, has tended to consider single
Communications Technologies technologies or a single service from these
» Integration between different energy vectors technologies, rather than a hybrid portfolio. More
studies which quantify the multiple services enabled
» Using energy carriers, such as hydrogen, to by using technologies and systems together are
interface between vectors needed to showcase, quantify and validate the
Executive Summary

Integration of energy systems may occur at benefits of co-operative, integrated deployment


various scales, linking different energy sources, and design suitable compensation mechanisms for
technologies and services from individual buildings these services.
and customers through to community, city, regional, Energy systems models for techno-economic
national and international scales. Approaches and analysis should be fully integrated to include
potential benefits of ESI vary considerably between electricity, heat and transport and need also to
countries and regions. For example, approaches will account for the synergistic benefits of energy
differ distinctly between urban areas in a developed efficiency and demand response.
country and rural areas in developing countries, as
well as between countries with different climates. Additional research is required to evaluate the
feasibility and market-design impacts of integrating
ESI can provide opportunities for new business multiple energy sources in future scenarios and to
models, innovation and market structures, and quantify the associated flexibility value of multi-
moves towards a model of providing energy services energy integration.
such as heat, light or mobility across the system.
Unlocking the potential
of Energy Systems Integration

1: Introduction

The UK energy sector is undergoing a transition, driven by the Climate Change Act (2008) goals to
reduce its greenhouse gas emissions by at least 80% of the 1990 levels by 2050, and the need to
replace ageing infrastructure and address energy poverty, competitiveness and security concerns.
Taking a wider view and integrating multiple energy systems and sectors, such as transport,
buildings, industrial processes, water and waste treatment, may expand the scope for identifying
new ways to improve efficiency, reduce waste and lower costs.

Energy Systems Integration (ESI) has The aim is to reflect on the question:
been suggested as a cost-effective way to
decarbonise the multiple facets of our energy How can enhanced energy systems integration
sector, use limited resources in a sustainable ease the path to decarbonisation and increase
way and produce a more resilient, flexible and the flexibility required to manage variable
cost effective system. renewables and new energy demands?

ESI has many definitions, which we elaborate To that end, this report investigates and
on in Section 2. However in general it means outlines the current evidence on the different
connecting a wide range of energy services and opportunities, knowledge and implementation
systems together to maximise energy use and gaps associated with the potential for enhanced
minimise waste. A small example would be a ESI.
solar array that could feed electricity to the grid, After outlining the research methodology in
using any excess to generate hydrogen for use in Section 1.1, the report sets out the findings
the hydrogen fuel cell of a car. of the evidence review. Section 2 discusses
New and additional forms of ESI may help to different definitions and types of ESI. Section
lower carbon emissions, meet climate change 3 reviews the potential benefits of ESI, which
targets and incorporate increasing penetrations include the more efficient use of resources,
of distributed, renewable energy resources, better management of variable renewable
demand-side response, smart technologies, generation, facilitation of low carbon vectors,
energy storage and multi-vector energy systems. cost reductions and improved energy security
and flexibility.
This report investigates the multiple aspects of
1: Introduction

ESI and explores potential benefits, interactions Section 4 discusses the role of the different
with existing infrastructure and the features components of the energy system and other
of the technologies that may enable a higher sectors in realising a higher degree of ESI, and
degree of integration of energy systems. the effect on their respective infrastructures.
The features of the main technologies that will
enable this integration are outlined in Section
5. Section 6 synthesises the key findings and
conclusions regarding the challenges, policy
implications and research gaps.

4
2: Energy Systems Integration:
Definitions and technologies

2.1 Introduction and definition Mancarella (2014) refers to the concept of


integrated or ‘multi-energy systems’, contending
Energy systems encompass all the components that ‘…all energy systems are truly “multi-
related to the production, conversion, delivery energy” from a physical perspective, in the
and end use of energy (Intergovernmental Panel sense that multiple energy vectors and sectors
on Climate Change 2014). They involve a range interact at different levels, from demand to
of fuels, technologies, processes and physical generation, in case facilitated by networks…
infrastructures that interact to supply energy the concept of “multi-energy” rather refers
services, mainly in the form of fuels, electricity, to considering a whole system approach to
heat and transportation. optimization and evaluation of the specific
case under study (for instance, a building or a
Despite the inherent interdependence among
country). In particular, the analysis approach
these components, different aspects of
refers to explicitly expanding the system
the energy system have tended to operate
boundary beyond one specific sector of interest
independently, often using centralised
(for instance, beyond electricity only or beyond
production plants and dedicated networks
heat only, as typical study cases). Doing so
(Abeysekera et al. 2016).
allows bringing a new perspective in energy
However, the increasing need for a more system analysis, particularly in the light of
efficient, flexible and cost-effective energy reducing the environmental burden of energy
sector, and the development of a range of services subject to economic constraints as well

2: Energy Systems Integration:


enabling technologies have allowed for a as comfort level constraints.’

Definitions and technologies


higher degree of integration across traditionally
Ruth & Kroposki (2014) observe: ‘Instead of a
separate sectors.
one way delivery of electricity powered by fossil
The initial assessment of the evidence in fuels generating steam to turn turbines at the
the academic literature revealed a variety of local utility, this new era is about integration
definitions for ESI. The International Institute of energy – from coal and wind, natural gas
for Energy Systems Integration (iiESI) defines and solar, biofuels and geothermal, lithium ion
Energy Systems Integration as “the process batteries and hydrogen fuel cells’. The intended
of coordinating the operation and planning of outcome is a ‘modernised energy infrastructure
energy systems across multiple pathways and/ ... that can easily incorporate new clean energy
or geographical scales to deliver reliable, cost- technologies as they are developed’.
effective energy services with minimal impact on
the environment” (O’Malley et al. 2016).
Unlocking the potential
of Energy Systems Integration

O’Malley et al. (2016) makes a distinction 2.2 Types of Energy System


between examples of energy systems Integration
integration which are categorised under three
areas of opportunity: streamline, synergise and ESI involves the interaction of different energy
empower. vectors (e.g. electricity, natural gas, hydrogen,
heating and cooling) and their coordination
» Streamline ‘refers to improvements made across fuel, water, data and transport
within the existing energy system by infrastructures (O’Malley et al., 2016; Wu et al.,
restructuring, reorganising and modernizing 2016). The review of the international literature
current energy systems through institutional revealed a range of ESI options, which can be
levers (i.e. policies, regulations and markets) broadly classified into three categories:
or investment in infrastructure’. Examples
of streamlining include capturing system- » Smart operation and aggregation of energy
wide benefits from increasing the flexibility systems involves automation, communication
of energy end use, removing institutional and storage technologies, which take into
barriers between the electricity transmission consideration their respective characteristics
and distribution systems and investing in order to optimise the use of energy
in pipeline infrastructure to expand the resources.
penetration of bio- / synthetic fuels.
» Cross-vector integration refers to
» Synergise ‘describes ESI solutions that technologies that combine two or more energy
connect energy systems between energy vectors for the production or the delivery of
domains and across spatial scales to take energy services.
advantage of benefits in efficiency and
» Power-to-X technologies use an energy carrier
performance’. For example, O’Malley et al.
(mainly hydrogen) as an interface among
(2016) propose that at a system-wide scale,
different energy vectors.
‘Fuel, thermal, water and transport systems
2: Energy Systems Integration:

will be systematically planned, designed Figure 1 provides an illustration of the possible


and operated as flexible “virtual storage” relationships among the different energy
Definitions and technologies

resources for the electricity grid (and vice sources and networks and the key technologies
versa).’ that enable integration among them.

» Empower ‘refers to ESI actions that


include the consumer, whether through
their investment decisions, their active
participation, or their decisions to shift energy
modes’ (O’Malley et al. 2016)

6
Figure 1 Possible areas for integration between different energy systems (Source: Abeysekera et al., 2016)

Low carbon energy sources

Solar Energy Wind Geothermal Waste heat Bioenergy

Electricity
Storage CHP
Electricity networks
Fuel Cells Power to gas
Hydrogen system
Energy Networks/Systems

Compressors Steam
Heat pump reform
Gas networks
Compressors
C-CHP Thermal store
Heat networks
Pumps Absorption Electric
chillers chillers
Cooling networks
Pumps Cold store

Energy Demand
(Electricity, gas, heat, cooling, transport)

2.2.1 Smart operation and procedures, act to mitigate their effects and
aggregation identify opportunities for achieving specific goals,
such as lower costs, mitigating demand peaks,
Advances in Information and Communications reduced emissions and improved efficiency.

2: Energy Systems Integration:


Technology (ICT) have enabled the development Increased automation can also increase

Definitions and technologies


of devices that are able to adapt their behaviour the reliability of the system, by predicting,
according to feedback stimuli obtained through responding and adapting to disruptive events,
sensors, data and built-in algorithms, and their as well as being able to optimise the system
deployment across the energy system (Geidl & configuration according to the generation profiles
Andersson, 2005). These technologies increase of intermittent energy sources.
the degree of automation and interactions within
the energy network, facilitating the integration At the consumer level, smart devices – which
of intermittent renewables and enabling the include meters, monitoring systems and
combined operation (or aggregation) of multiple distributed system resources such as power
energy systems (Abeysekera et al., 2016, Hu, generators, electric vehicles and batteries – can
2016, Geidl and Andersson, 2005). increase the involvement of end-users in the
energy system and alter their consumption
Smart devices have two-way communications, patterns. At the electricity and gas grid level,
enabling them to send data about local automation is enabled by a network of smart
conditions and to respond to signals from meters, controls and flexibility options, such
other parts of the system (Römer et al. 2012). as storage, curtailment and demand-side
Information from these devices can be stored management technologies. The specific
in large data sets and actively analysed to spot technologies that accelerate the smart transition
trends and make predictions. Control algorithms of the energy system are further discussed in
can make use of the data and functions to Section 2.3.
actively forecast events, optimise operational
Unlocking the potential
of Energy Systems Integration

2.2.2 Cross-vector integration In warmer climates where heating needs


are minimal in the summer, the efficiency
Integration of different vectors in one energy of CHP declines sharply. Through seasonal
system may occur either by the use of multiple trigeneration, an absorption chiller can be
types of fuel for the production of energy coupled with a CHP plant to provide cooling
services (e.g. multi-fuel power stations and during the summer when there is a lower
hybrid heat pumps), or by the simultaneous demand for heating. Trigeneration is often
generation of multiple products using a single operated throughout the year by end-users such
energy source. The latter process is known as as offices, supermarkets and hotels (Jradi and
polygeneration (or multi-generation) and has Riffat, 2014).
two main types: cogeneration (heat and power)
and trigeneration (cooling, heat and power) Distributed multi-generation (DMG) is a wider
(Mancarella, 2014; Rong and Lahdelma, 2016). concept than cogeneration. It encapsulates
forms of both polygeneration and distributed
Combined heat and power (CHP) is a well- generation at the same time. Polygeneration
established and reliable technology that plants of relatively small capacity (e.g. less
produces electricity and useful heat at the same than 50 MWe) interact with each other via local
time (Jradi and Riffat, 2014). In comparison to distribution networks (e.g. gas, electricity,
a condensing power plant that only generates heat and potentially hydrogen) and are also
electricity, CHP provides the benefit of using interconnected through national scale energy
the excess heat from electricity production. For transmission networks (Mancarella, 2013;
example, the efficiency of a steam turbine can Mancarella, 2014).
be increased from 20-38% when power alone is
generated, to 80-90% when power and useful DMG technologies include polygeneration
heat is produced (Rong and Lahdelma, 2016). (CHP and CCHP), micro-CHP and reversible
electric heat pumps. Through DMG, electricity,
Cogeneration plants can be coupled with district hot water, space heating and cooling can be
2: Energy Systems Integration:

heating networks to meet both the thermal and provided from one or multiple energy sources
electricity demand of end users, benefit from (e.g. natural gas, biogas and biomass).
Definitions and technologies

aggregated and diversified loads and maximise


the use of fuel. While CHP plants are most DMG is particularly appropriate (and most likely
efficient when operating at full capacity, they to be cost-effective) in urban areas, where there
are typically set up to provide 50-60% of heat is a high density of heat and electricity loads
demand (with boilers providing the remainder), and sufficient availability of electricity, gas or
given the lack of consistency and synchronicity heat networks. District heat networks are well
in the electricity and heat demands of end-users suited for development with DMG, since heat
(Olsthoorn et al., 2016). networks aggregate multiple users of heat with
diverse temporal load profiles (e.g. residential
The efficiency of the CHP process can be and commercial), help to reduce peaks of
improved by combining it with thermally- demand, increase load factors and can provide
activated cooling (Jradi and Riffat, 2014), in a an adequate thermal load for a DMG system.
trigeneration system also known as combined
cooling heat and power (CCHP). The concept
of CCHP was first introduced in the early 1980s
as a means of providing municipal heating and
cooling. A CCHP system consists typically of
a prime mover, a power generator, thermally-
activated technologies, a heat recovery unit and
a unit to manage and control the system.

8
Electrical and thermal storage are also an P2G producing hydrogen uses relatively small
important component of DMG systems, enabling quantities of water (California Hydrogen
the production of electricity, heating and cooling Business Council, 2015), requires few
to be decoupled from local demand. Such conversion steps and can respond in less than
integrated urban energy systems are complex a second. The hydrogen can either be stored for
and demand powerful approaches to system later use on site, or injected into the gas grid,
modelling and assessment (see Section 4). An contributing to decarbonisation of the gas grid
energy service company or energy retailer can by increasing the proportion of low emission
set up a centralised commercial and technical fuel.
management system, in order to guarantee
a reliable supply of multi-energy services to The use of electrolytic hydrogen as an energy
a local community of end users (Mancarella, storage option in the gas grid, transportation or
2013). industrial sectors provides an effective way to
absorb excess energy and is a key application
for this technology (Qadrdan et al., 2015;
2.2.3 Power-to-X Eyer, 2010; Patel, 2012) . However, the round-
The term power-to-X refers to technologies trip efficiency of power-to-gas pathways are
that convert surplus electricity into alternative relatively low (around 35% for power to gas
products. The “X” may stand for fuel (e.g. systems compared to above 90% for battery
hydrogen, methane, methanol), ammonia, storage (Winkler-Goldstein and Rastetter, 2013).
chemicals, heat, mobility and syngas, among This efficiency can be improved up to 70% by
others. These products can be used directly, or using reversible solid oxide electrochemical
may be converted back to electricity in power-to- cells, recycling waste heat and providing both
power applications, making this option a flexible heating and electricity services (Jensen et al.
way to link power and fuel networks and an 2015).
effective way to integrate intermittent renewable
resources into energy systems and services.

2: Energy Systems Integration:


Definitions and technologies
Power-to-X technologies allow power from the
electricity sector to be used in other sectors,
such as transport, heat, the gas grid and
industrial processes. They vary in their efficiency
and the choice of the pathway in any location
depends on the desirability of the end product.
The main advantages of power-to-X systems
are the potential of long-term storage of the
intermediate products, which allows for daily
and inter-seasonal cover and the use of existing
fuel infrastructures.

The operating principle of power-to-fuel


technologies is based on the process of
electrolysis, which uses an electrical current
to break chemical bonds, particularly the bond
between hydrogen and oxygen in water. Power-
to-gas (P2G) pathways then generate a gaseous
fuel, such as hydrogen or methane, while power-
to-liquid (P2L) convert hydrogen into methanol,
a liquid fuel (Grond et al., 2013).
Unlocking the potential
of Energy Systems Integration

2.2.4 Smart Technology » Machine learning and big data, which offer a
range of approaches for the development of
Advances in Information and Communication optimisation routines and learning from data
Technology (ICT) have enabled the power grid to predict future system behaviour.
to become more interactive, automated and
responsive. This smart grid consists of a network Smart grids also make use of power electronics
of devices deployed throughout the system, to convert the power obtained from different
which allow for two-way communications renewable energy sources into a form
and sharing of real-time, location-specific compatible with the rest of the power grid.
information (Ekanayake et al., 2012). Power electronics are widely employed to
control the flow of power throughout the
An increasing array of sensors and measurement network and to improve the quality and
devices provide the smart grid with the sensory reliability of power during transmission and
input required to monitor the state of the distribution. They can also be deployed at the
system, respond to and correct faults and point of use, to ensure voltage stability by
ultimately predict disruptions. The technologies filtering the currents drawn from the network.
that have been developed include:
The Virtual Power Plant (VPP) refers to the
» Smart meters, which enable the grid to aggregation of distributed microgeneration
monitor gas and power flows by tracking the and other energy resources, which use ICT
loads on various parts of the network. technologies to act together as a single power
plant with the capacity to control the aggregated
» Phasor measurement units (PMUs), which
elements and manage the flow of electricity
enable system operators to monitor electrical
between them (Othman et al., 2017; Ekanayake
states and manage power quality throughout
et al. 2012).
the electrical system.
Integrating different energy resources into
» Advanced metering infrastructure (AMI),
a VPP allows them to have similar technical
2: Energy Systems Integration:

which includes the communications and data


and commercial characteristics as central
management systems that connect smart
Definitions and technologies

power plants and to become visible to the


meters and enable the coordination between
system operator, who is then able to control
the utility and its customers’ measurement
them actively. VPPs can help to overcome
and control devices.
the intermittency of renewable electricity
In addition to the devices for the collection of generation, by aggregating distributed
data, smart grids use a range of algorithms generation over large geographical distances
that enable the automated control of different and across different technologies (Ekanayake et
components in the energy system. (Ekanayake al., 2012).
et al., 2012). Examples of such advanced
The Internet of Things (IoT) refers to the inter-
methods include:
connection of multiple devices (e.g. computers,
» System identification, which is used to vehicles, smart phones, social media) to
develop models about complex, usually increase the level of human comfort or provide
dynamic, systems which are not well solutions to societal problems (Communications
understood, or to derive simplified models Alliance, 2015; Fischer & Madani, 2017).
from systems for which developing a IoT presents a substantial opportunity to
precise algorithm would be difficult, slow or combine information from devices and
uneconomical. systems in new ways and benefit from the
analytical power opened up by the vast data
processing capabilities associated with Big Data
(Communications Alliance, 2015).

10
IoT has been facilitated by the technological between operating synchronously with the
innovation that has developed ever smaller connected utility and islanded mode.
computing capacities, advanced algorithm
design and the proliferation of wireless Each microgrid can be viewed as a power
communication networks with enough cell within the larger system, presenting a
bandwidth to carry control signals and data controllable generation and load profile to
(Fischer and Madani, 2017). In the UK, the the grid (Pudjianto, 2008). Microgrids may
centralised system of electricity generation, have excess energy to supply to the grid when
transmission and distribution is being needed and the grid can send a disconnect
increasingly challenged by the increasing signal to the microgrid if the grid encounters
growth of decentralised energy resources and difficulties with load management.
the dynamic needs of energy suppliers and The key benefits of this technology are for
customers. In the energy sector and specifically its local customers, providing them with an
the power system, IoT has been used through affordable solution for locally-controlled power
the development of the smart grid concept which can be self-sustaining if outages occur
(Fischer and Madani, 2017). in the grid. While connected to the grid, power
The concept of a microgrid was originally reliability is improved by redundancy. Microgrids
defined by the Consortium for Electric Reliability can provide social benefits by encouraging
Technology Solutions (CERTS, 2003), as a way to increased customer participation and enabling
improve reliability or autonomy for critical loads, essential emergency services, such as medical
by breaking the electricity grid into discrete, care and food and water delivery systems, to
distributed energy islands, each capable of remain operational during disaster conditions.
operating independently of the grid during There are also benefits to the grid, as the
disruptive events. diversity of energy sources within microgrids
may enable some to assist with restoring the
Since then, the concept and its uses have grid during black-starts, following disruptive

2: Energy Systems Integration:


developed further, with the recognition that events (Montoya, 2013).
microgrids can be connected to form a robust

Definitions and technologies


distribution network architecture, connecting or The shorter distances between energy
disconnecting in response to grid signals as well generation and use greatly reduces transmission
as physical or economic conditions (Pudjianto et losses and improves system efficiency. The
al., 2008). diversity of energy sources which can be
accommodated enables greater integration of
Microgrids can be viewed as low-voltage, renewables. Consumption and generation of
miniature versions of the traditional grid, having a variety of energy vectors, such as heat and
a central system controller coordinating the power, can be coordinated, further improving
operation of energy generators (typically low overall efficiency (Pudjianto, 2008). Microgrids
carbon sources such as photovoltaics, fuel cells, are a cost-effective way for developing nations
hydro and wind turbines), storage and network to construct a nationwide, low carbon energy
devices, as well as a range of loads to provide system from the ground up. Microgrids enable
local energy services, such as lighting and heat aggregation of similar components to provide
(Hatziargyriou, 2006; Lasseter, 2007). ancillary services to energy markets, acting as a
Virtual Power Plant (VPP) (Pudjianto, 2008).
It is important to note that microgrids are not
exclusively electrical and can provide a number
of energy services beyond power, integrating
well with waste-to-energy and combined heat
and power (CHP) systems, among others.
Microgrids can use smart technology to switch
Unlocking the potential
of Energy Systems Integration

2.3 Scale The concepts of smart cities and smart


communities encompass interactions between
Integration of energy systems may occur at various energy vectors and services and
various scales, linking different energy sources, therefore extend ESI beyond the concept of
technologies and services from individual the smart grid which focuses on electricity
buildings and customers through to community, alone (Mancarella, 2014; O’Malley et al., 2016).
city, regional, national and international scales ESI is particularly relevant in decentralised
(Mancarella, 2014; O’Malley et al., 2016; Ruth energy networks where there is an increased
and Kroposki, 2014; Wu et al., 2016). contribution from small scale renewables
and local energy generation. Nevertheless,
At the building level, ESI can be exemplified by
ESI should be considered across a full range
the optimal coordination of different equipment
of scales since a focus on city, community or
to provide electricity, gas, heating and cooling
district scale may miss opportunities for ESI at
services, such as boilers, electric heat pumps,
different levels of aggregation (O’Malley et al.,
chillers and combined heat and power (CHP)
2016). Figure 2 provides an illustration of the
micro-generators (Mancarella, 2014). Buildings
different scales at which ESI may occur.
can be connected through district heating
networks which can distribute heat production
from different fuel sources such as natural gas,
biomass, waste heat and electric heat pumps.
Moreover, district heating systems can be
aggregated and optimised for provision at city
and even regional levels and integrated with
other vectors (e.g. to provide additional flexibility
for intermittent renewable generation through
the use of thermal stores) (Wu et al., 2016).
2: Energy Systems Integration:
Definitions and technologies

Figure 2 Integration of energy systems at different scales (Source: O’Malley et al., 2016)

12
3 Potential benefits of
Energy Systems Integration

Integration of energy systems is a potential A higher degree of ESI may allow for a higher
path to provide a means to improve resource utilisation rate of resources, by taking a whole-
efficiency, enhance power grid flexibility and system view and incorporating other energy
security in a cost-effective way and accelerate networks, such as gas and heating. A study
the transition to a low-carbon energy sector. of the UK energy system found that electricity
generation, domestic energy use and transport
The potential value of energy systems hold the greatest potential for efficiency
integration technologies varies from place to improvements (Hammond and Stapleton, 2001).
place – for example, approaches will differ
distinctly between urban areas in a developed Most energy losses in these sectors are due to
country and rural areas in developing countries. wasted heat. Capturing and reusing this energy
While in many regions increased penetration is therefore an important focus for reducing
of renewable energy is the principle driver fuel consumption and carbon emissions. In the
for ESI, in some regions there are alternative worldwide production and use of electricity
priorities such as better use of resources, wider and heat, up to 51% of energy is lost through
electrification, or the transitioning from coal to conversion (IEA, 2015).
natural gas generation (O’Malley et al., 2016).
In addition, polygeneration systems provide a
The following sub-sections outline the potential flexible bridge between electrical and thermal
benefits of ESI and highlight how different types energy streams and are an attractive option
of integration may realise them. for facilities having a large amount of waste
heat, such as underground metro systems,
3.1 Efficient use of resources data centres and large-scale cooling systems.

Energy Systems Integration


Combining heat with power and recovering
Although the need for optimal use of resources waste heat improves energy efficiency through
in energy systems has been present for the conversion efficiencies of storing and
centuries, the drive for ever more efficient harnessing thermal energy (Horlock, 1997).
3 Potential benefits of

systems became more prominent in the 1940s,


with the streamlining of industrial processes
yielding economic benefits (Sargent, 2005). To
a large extent, the key factors in achieving this
were coordination of overlapping systems and
reuse of waste products (Keirstead and Shah,
2013).

The achievable efficiency improvements vary


according to the vectors being converted from
and to, but combining three or more vectors
seems to yield greater opportunities for
synergistic economies than the use of a single
vector, or a combination of just two (Chicco and
Mancarella, 2008).
Unlocking the potential
of Energy Systems Integration

3.2 Decarbonisation 3.3 Improved system security


and operation
Increased efficiency in the energy sector can
directly lead to cost and emissions reductions, 3.3.1 Flexibility
through the more effective use of energy
resources. However, wider integration among Higher penetration of intermittent renewables
energy systems and across sectors may provide in the power grid may require greater flexible
additional opportunities to reduce the carbon capacity to balance supply with demand over
intensity of the respective systems. time and between locations. Flexibility services
can be incorporated into the energy system
Cross-vector integration enables the use through the use of interconnectors, flexible
of electricity for energy services that have generation, storage technologies and demand
traditionally been provided by carbon-intensive side response schemes (Strbac and Aunedi,
fuels. Electrification of the heat and transport 2016). Higher integration across energy systems
sectors is identified as a key decarbonisation may also enhance the flexibility of the whole
pathway in the UK (DECC, 2012; DECC, 2013). In system, by diversifying both input and output
most applications, electric machines are more streams, allowing demand to be shifted from one
efficient and more reliable than their combustion system to another (i.e. interconversion between
engine counterparts and consume less fuel (Tate vectors) (Mancarella, 2014).
et al., 2008). There are no emissions at the point
of use and the overall emissions of the electricity Flexibility is also important as a mechanism to
system can be further reduced by using clean protect against the high level of uncertainty
energy sources (Williams et al., 2012). Although in the structure and functioning of the future
greater electrification will increase the demand energy system, where demand and supply
peaks disproportionately from the base demand, patterns are changing in unpredictable ways
this does not necessarily result in increased (National Grid 2017). Therefore, technologies
emissions since wider penetration of renewable which can run on a variety of energy sources
energy technologies enabled by ESI may and/or produce a range of energy services have
compensate for the increased demand (Baruah an advantage in future energy systems, as they
provide flexibility and security of supply by
Energy Systems Integration

et al., 2014).
being able to exploit alternative pathways when
A high degree of ESI may also facilitate the some resources are not available. For example,
decarbonisation of the gas network. Natural gas cogeneration technologies and district heating
is currently a major component of the energy and cooling networks are able to simultaneously
3 Potential benefits of

system, generating over a third of electricity produce a range of useful energy vectors using a
in the UK, and is expected to play at least a wide range of energy sources (IEA, 2008).
transitional role in the ongoing low-carbon
transition, due to its advantageous carbon
profile compared to coal and oil, and the wide
penetration of gas infrastructure (Pearson and
Watson, 2012). The carbon intensity of the
gas network could be lowered through wider
integration of renewable gases, such as biogas
and synthetic methane, as well as hydrogen.

14
3.3.2 Reliability and resilience Smart operation of electricity storage can
improve the power system’s reliability by
Reliability is a well-established concept in maintaining stricter control of voltage and
existing energy infrastructures, with a set of frequency, while all forms of energy storage
metrics to quantify concepts such as the security provides back-up power and can assist in
and adequacy of the system (Panteli et al., 2015). restoration operations, including black-start
(Nguyen and Flueck, 2012). An effective way
Resilience is a relatively new concept, dealing
to confer resilience to the energy system is
with events such as multiple simultaneous
by diversifying the energy supply through
failures or extreme weather events which,
connected systems, such as CCHP and
while less likely to occur, have far-reaching
microgrids incorporating hybrid generation
consequences, often affecting a large number of
technologies.
customers and may involve long term outages.
A resilient system would recover rapidly from Microgrids have been shown to be key in
such an event and learn from it by adapting its supporting critical infrastructure during rare,
structure and/or operation to improve its ability high impact events and enable both grid
to prevent or recover from similar events in the isolation and recovery (Strbac et al., 2015;
future (Lin and Bie, 2016). IEC, 2014). Locally deployed cogeneration can
support continued operations in the event of
These events are mainly weather-related and
grid disruption. Demand side management
their frequency has increased over the last 30
strategies enable better control of energy
years, particularly in the first decade of this
demand and supply during such events (Lin et
century (Kenward and Raja, 2014). As climate
al., 2016).
change progresses, the frequency, intensity
and duration of extreme weather events are However, interdependencies may also lead to
expected to increase (IPCC, 2012). Existing new failure modes, such as cascading failures,
energy infrastructures have been designed for where an otherwise stable infrastructure may
reliability, but a highly reliable system is not be impacted by failures in other infrastructures
necessarily resilient, using the definitions above (Buldyrev et al., 2010) or where vulnerabilities to
(Lin et al., 2016). the same cause in multiple infrastructures result

Energy Systems Integration


in simultaneous failure (Little, 2003).
The integration of energy systems is expected to
enhance both reliability and resilience. Recent
work shows how smart technologies embedded
3 Potential benefits of

into interdependent systems could enable


more accurate prediction of weather-related
events (Martínez-Mares and Fuerte-Esquivel,
2013; Panteli et al., 2015) and allow automated
systems to respond faster and recover more
effectively to power outages from single
component failures (Li et al., 2016).
Unlocking the potential
of Energy Systems Integration

» BOX 1: Clean cold supply chains


Food production is an essential activity to support the global population. Population growth
is putting increasing pressure on limited resources which can be alleviated by improving
the efficiency of the food supply chain. The Food and Agriculture Organisation of the United
Nations estimates that 30-40% of total food production in developing economies is lost
before it reaches the market (Gustavsson et al., 2011). The main cause of food wastage
is poor temperature control during storage and transport. Medical supplies also require
adequate cooling (Rubin, 2010). Conventional distributed cooling is provided by diesel-
powered transport refrigeration units (TRUs), which can be attached to an engine. Improving
refrigeration standards across the whole food and medicine production and delivery chain can
address all of these problems and have additional benefits, such as improving farmers’ income
and boosting the nutritive value of all food reaching our plates.

Liquid air (aka liquid nitrogen) is commercially produced at scale, with a significant surplus
available for use. Liquid air can also be produced using off-peak electricity or through
integration with industrial processes, to capture waste cold or heat. This technology has the
unique ability to capture low grade waste heat (up to 150°C) at high efficiency (CLCF, 2013).
Liquid air is stored cryogenically (-196°C) in unpressurised insulated vessels, which can
be stationary or distributed to remote locations through established tanker and shipping
networks. The Dearman engine can be hybridised with a diesel engine or hydrogen fuel cell,
allowing exchange of waste heat and cold to improve the efficiency of both and reduce fuel
consumption (University of Birmingham, 2014).

The integration of transport with a cold energy vector which can simultaneously provide
cooling services directly, without needing to be converted to another energy form, improves
the overall system efficiency and provides a robust, distributed supply chain for temperature-
sensitive products. TRUs powered by liquid nitrogen produce no tailpipe emissions and, for
Energy Systems Integration

frozen produce, have been shown to save 56% of the CO2 emissions in India. Developing
countries with hot climates have the greatest need for such a cold economy, but little to no
cold chain infrastructure exists. The waste cold from the global LNG trade projected for 2030 is
estimated to be sufficient to provide cooling for over 4 million refrigerated trucks (University of
3 Potential benefits of

Birmingham, 2014). The development of a cold economy based on liquid air is both technically
and economically feasible and badly needed to preserve food and medicines, particularly in
the context of a warming world.

1
Well-to-wheel carbon emissions are those which occur ‘from the mining of the energy source to a vehicle being driven’ (Woo et al., 2017)

16
3.4 Cost reduction 3.5 Service Provision
In addition to the direct savings from increased A service-level view of the energy system considers
energy resource efficiency and the implicit the energy needs of all users in the system and
economic benefits from decarbonisation, wider focuses on supplying these with the appropriate
integration may offer further opportunities for cost resources. ESI presents innovation opportunities
reduction. for new businesses to develop a range of
enhanced applications and services with regards
ESI provides the opportunity to maximise the use of to transport, agriculture, space heating, cooling,
existing infrastructures and avoid redundant assets lighting, hot water, water supply, water treatment,
through whole-system planning (O’Malley et al., communications, appliances, etc.
2016). For example, CHP is estimated to save 7% of
total projected power sector investment up to 2030, For example, polygeneration systems increase the
through avoided transmission and distribution scope for new business models and consumer
system upgrades (IEA, 2008). services to be developed through access to
multiple energy vectors. Box 2 gives an example of
Through integration, energy systems with low the provision or enhancement of a specific service
storage capacities could also access the benefits through integration of thermal technology. The
of storage available in other systems. This sharing global trend towards urbanisation makes it likely
of assets is another way in which ESI can reduce that citywide solutions will dominate innovation in
whole system costs. Recent whole systems analysis this area (Keirstead and Shah, 2012).
done on the value of integrating energy storage into
the UK electricity grid (Strbac et al., 2016) shows Cities require multiple services for providing
that the flexibility this technology can provide to basic requirements such as food, water, clean air
a low carbon grid leads to great savings in both and energy, as well as mobility, healthcare and
capital expenditure and operational costs, by waste collection and treatment. More coordinated
allowing better use of existing assets and reducing approaches to providing these services, the so
curtailments, as well as delaying or avoiding the called ‘smart city’ model, will benefit from increased
need for infrastructure upgrades and expansions. integration of energy systems across dense urban
areas.

Energy Systems Integration


Additionally, the high degree of automation in the
operation of energy systems that will be enabled
by smart technologies and big data is expected to
lead to cost reductions (Abeysekera et al., 2016).
3 Potential benefits of

This has been investigated for integrated gas


and electricity systems (Hu, 2016), as well as for
multi-vector integration including district heating
(Geidl and Andersson, 2005) showing that hybrid
systems enable optimum cost savings. Renewable
integration is facilitated by the development of
algorithms which can cope with the stochastic
nature of, for example, wind power generation
(Huang et al., 2017).
Unlocking the potential
of Energy Systems Integration

4 Realising Energy Systems Integration

This section outlines the opportunities for By contrast, the distribution network is
energy systems integration in existing power, largely passive with a lack of communication,
gas, heating and transport infrastructure and automatic controls or real-time monitoring.
markets, as well as the respective challenges. The distribution grid is very extensive but its
principal function remains to supply electricity
4.1 The role of the power grid to end users across the network. In order to
progress to a decarbonised electrical power
Long-distance transmission can provide system in OECD countries, a smart grid with
interconnection between different energy sufficient monitoring and control will be required
systems and therefore represents an external to operate cost-effectively a mixture of variable
means of providing flexibility to an energy renewable generation, nuclear power and fossil-
system, since it makes use of adjacent energy fuel plants with CCS (Ekanayake et al., 2012).
systems through the import and export of
electricity (Thellufsen and Lund, 2017). 4.2 The role of the gas network
Several studies (Ekanayake et al., 2012, Approximately a fifth of global residential heat
Karady and Holbert, 2013) investigate the use is supplied by natural gas, mainly in OECD
of transmission to achieve flexibility through countries (Dodds et al., 2015). Gas networks
different levels of interconnection in Europe. supply natural gas to industrial, commercial and
Becker et al. (2014) present a scenario where residential consumers for space heating, water
each country meets all of its electricity demand heating and cooking (Speirs et al., 2016). Natural
through a combination of wind and solar power, gas is used widely in Northern Europe and North
transmission cables interconnect 27 countries America and in the UK and Netherlands, over
across Europe and transmission capacity is 80% of homes are fitted with gas boilers (Dodds
unrestricted. In this scenario, which is not et al., 2015).
constrained by investment costs, transmission
cables are found to reduce the total backup As a result of a decline in the UK’s natural
capacity to 15% of annual electricity gas resources, a previous policy emphasis on
consumption (compared to 24% in a scenario national self-sufficiency was replaced by a new
without interconnections between countries) focus on international trade and interconnection
Systems Integration

(Rodríguez et al., 2014;Thellufsen and Lund, with other countries enabling the integration
2017). of gas systems (Arapostathis et al., 2014;
4 Realising Energy

Arapostathis et al., 2013). Today, the UK’s natural


The existing electrical power system already gas distribution network is well developed and
possesses good communication links which allows for the import and export of natural gas
enable integrated operation between large between the UK and other countries including
power generators and the transmission network, Norway, Belgium, the Netherlands and the
facilitate market transactions and maintain Republic of Ireland.
system security. Some automatic control
systems are also available to ensure that
generators and the transmission grid behave
predictably in the event of disturbances.

18
The UK also possesses two types of dedicated Nevertheless, current gas networks would
facilities for inter-seasonal gas storage (whereby require reinforcement since pipelines of the
gas is stored when prices are low in summer and same diameter and pressure drop would have a
extracted during the winter when gas is more 20%-30% lower capacity for carrying hydrogen
expensive) and fast-cycle storage (whereby in comparison to natural gas. The capacity of
gas can be stored and withdrawn at any time a hydrogen network to act as a means of gas
of the year depending on short-term market storage to meet daily peaks in gas demand
conditions), improving flexibility in the system (known as the linepack) would be less than 25%
(Bradshaw et al., 2014). of the current capacity for natural gas (given its
volumetric energy density relative to hydrogen).
At a global level, heating and cooling demand This issue could be resolved by creating
contributed to 30% of CO2 emissions in 2012 additional storage, or raising the operating
(IEA, 2015). Recent decarbonisation scenarios pressure across the network (Dodds et al., 2015).
(IEA, 2015; Shell Scenarios Team, 2013) feature
the increased use of electricity to meet heating The chemical and physical properties of
demand. However, in countries where a high hydrogen are different from natural gas and
proportion of heating is supplied by natural therefore the legislated amount of hydrogen
gas, such as the UK and Netherlands, it might which can be injected into the grid is currently
be preferable to maintain and decarbonise the limited, or modification is needed to enable
existing gas network infrastructure by injecting higher amounts of hydrogen to be distributed.
hydrogen or biomethane into the gas grid (see The volume fractions allowed vary by country,
Section 4.4). with the highest limit of 12% being in Holland,
while most countries restrict it to less than 5%
Another option in such countries is to reduce the (CHBC, 2015). Research suggests that volume
contribution of natural gas heating in the future fractions of up to 20% could be tolerated
in order to stay within carbon emissions targets. (California Hydrogen Business Council, 2015).
For example, natural gas could provide heating
only during periods of peak demand using A number of different technologies could be
hybrid gas/electric heat pumps, which could used to supply heating from hydrogen in homes.
help to avoid the need for electricity network These include fuel cell micro-CHP, direct-flame
reinforcement (Speirs et al., 2017). combustion boilers (which provide the same
function as gas boilers but burn hydrogen
A potential low-carbon transition pathway in instead) and gas heat pumps. While current
countries with established, significant gas fuel cell micro-CHP units feature built-in steam
networks would be to repurpose these networks methane reformers to extract hydrogen from
Systems Integration

for use with hydrogen (discussed in more detail natural gas, fuel cells could in the future be
in Section 4.4). Some existing high-pressure
4 Realising Energy

powered by hydrogen produced from low-carbon


pipelines are used to transport hydrogen from energy.
industrial producers to consumers (e.g. there
are approximately 1,600 km of such pipelines In the UK and Northern Europe, peak electricity
in Europe and 3,000 km globally), however it is demand occurs in winter at approximately
unlikely that high-pressure networks are suited the same time as the peak demand for space
to the transport of pure hydrogen. heating. Fuel-cell micro CHP could therefore
provide additional system integration value
to the UK energy system by simultaneously
generating heat and electricity during periods of
peak demand (Dodds et al., 2015).
Unlocking the potential
of Energy Systems Integration

4.3 The role of district heating Reddy, 2013). Low carbon heat sources are
networks also increasingly being incorporated into DH
networks, particularly in some Scandinavian
A district heating (DH) system comprises an countries. These energy sources include waste
energy source for the production of heat, a heat, biomass, heat pumps and solar thermal
network for distributing the heat to buildings (Hanna et al., 2016).
and more than a single end-user. In contrast
to individual systems for heating or cooling in Modern low temperature DH systems are more
buildings, a DH system needs to be designed energy efficient than previous generations of
to consider local energy sources, heating and DH, and can incorporate diurnal or seasonal
hot water requirements of all end-users and storage, particularly where the heat sources are
the location of energy suppliers in relation to of an intermittent nature e.g. industrial waste
customers (Olsthoorn et al., 2016). heat, solar thermal and heat pumps (Olsthoorn
et al., 2016). Most CHP plants in Denmark have
DH systems have the flexibility to integrate a short-term storage tanks to store heat for
variety of heat sources, which can vary from several hours of heat demand, thereby allowing
region to region depending on local resources the design of smaller plants which can operate
and climate. A DH system can improve the fuel at full capacity (Harris, 2011; Olsthoorn et al.,
utilisation factor in regions where electricity 2016; Toke & Fragaki, 2008). A case study on
is generated predominantly from natural gas the potential ESI capability of a DH system in
or coal (Olsthoorn et al., 2016; Srinivas and Denmark is presented in Box 2.
Systems Integration
4 Realising Energy

20
» BOX 2: Case Study: District Heating in Copenhagen, Denmark
Copenhagen’s district heating system is one of the oldest and most successful
implementations of district heating in the world, demonstrating the technology’s versatility,
waste use and low cost. The system supplies 97% of the city with clean, reliable and
affordable heating, maintaining a low heating price throughout the project’s lifetime.
The system substantially reduces emissions of carbon and a number of pollutants.

The system was proposed in 1984 by five mayors in the city of Copenhagen in Denmark, based
on an older waste-to-heat system, implemented in Frederiksberg in 1903.

The state-of-the art Avedøre units were built in 1990 and 2001. A lack of available space for
landfill waste and the coincidental energy needs of a locally constructed hospital was solved
by the Frederiksberg waste incineration and CHP plant, supplying power, heat and hot water.

Its success and over 80 years of experience gained through its running led to the choice of this
system for supplying the needs for most of the greater Copenhagen area. Regulatory changes,
such as a new heat supply act encouraging municipalities to work together and enforcing
household uptake of CHP in 1979, as well as a tax break for CHP in the mid-1980s, provided
good incentives for the implementation of this clean technology. Central authorities facilitated
the process, issuing guidelines, supervision and approval of plans, while the municipalities
consulted with energy utilities and experts to develop the plans.

The system consists of 10 CHP power plants with waste incinerators and over 50 peak load
boiler plants connected into one large pooled system, operated by more than 20 distribution
companies and producing a total of 30,000 TJ of heat.

Water captures the heat and is pumped directly into homes through a 1,300 km network
of pipes. CTR’s digital operations centre is in Frederiksberg and regulates, optimises and
monitors the system through automation. The CTR and VEKS networks are interconnected,
so that they can balance each other.

In addition, any excess heat from both networks is exported to the rest of Denmark. About
30% of the heat is obtained from refuse incineration and the rest is met by geothermal energy
and a range of fuels, including wood pellets, straw, natural gas, oil and coal. From 1995 to
Systems Integration

2000, the CHP plants switched from coal to natural gas and sustainable biofuels to further
4 Realising Energy

reduce CO2 emissions.

The Avedøre plant, built in 2001, is a multi-fuel unit powered by 50% carbon-neutral biofuels
and can produce 570 MW power and 570 MW heat. The district heating network supplies
clean, reliable and affordable heating to 97% of a 50 million m2 region, covering Copenhagen
and a number of surrounding municipalities. Average annual household bills have been
reduced by €1,400, in comparison to homes that use oil heating, and emissions of CO2 and
sulphur dioxide have been dramatically reduced compared to the original system.

21
Unlocking the potential
of Energy Systems Integration

4.4 The potential role of The linepack in the UK natural gas network
hydrogen enables a large energy storage capacity
(Abeysekera et al., 2016). It has been estimated
Hydrogen is an easily transferable vector for that all excess renewable energy currently in
both heating and transport. Existing natural Europe could be absorbed using this pathway
gas infrastructure and markets could be (FCHJU, 2015).
converted for use with hydrogen (Dodds et al.,
2015). As an interim measure, hydrogen could
4.5 The role of transport
be injected into the gas grid instead of (or in
combination with) biomethane, to achieve After electricity and heat, the transportation
partial decarbonisation of gas heating. However, sector is the third biggest emitter of CO2,
wholesale replacement of natural gas supply accounting for 23% of global CO2 emissions (IEA,
with hydrogen would require the replacement of 2015). Transportation is a very energy-intensive
existing burner heads in all appliances designed sector, with 85% of this energy coming from
for use with natural gas. oil-based fuels, while a significant portion of the
energy demand relates to road transport and
The production of hydrogen for industrial
personal vehicles.
purposes is well established, whereas its use as
an energy vector is restricted mainly to fuelling Decarbonisation of this sector remains a
spacecraft (Dodds et al., 2015). Steam methane significant challenge which can only be
reformation of natural gas is the dominant addressed by a greater uptake of ultra-low
method of producing hydrogen at present, emission vehicles (ULEVs), and the integration
but hydrogen could be produced through of low-carbon energy vectors such as electricity,
electrolysis of water using low-carbon electricity. biofuels and hydrogen. Additionally, ESI may
facilitate decarbonisation of transport through
However, given the comparative expense of
the development of cold supply chains (see also
low-carbon electricity, more cost-competitive
Box 1).
alternatives might be to use fossil-fuel or
biomass power plants equipped with CCS to Electro mobility (e-mobility), incorporating
generate electricity for hydrogen production battery electric vehicles (BEVs) and fuel cell
(Dodds et al., 2015). electric vehicles (FCEVs), employs efficient,
electric-powered drivetrains and produces no
As discussed in Section 2.2.3, power-to-gas
emissions. In BEVs, all the energy is stored in
(P2G) technology for the production of hydrogen
the on-board rechargeable battery, which can be
is technically mature, can provide rapid flexibility
plugged into the grid. In FCEVs, a fuel cell stack
with sub-second response times and long
Systems Integration

converts hydrogen to electricity.


duration storage that can be deployed at a range
4 Realising Energy

of scales and locations. There are also various forms of plug-in hybrid,
including extended-range vehicles, which
Some research bodies have suggested that
employ both an electric motor and an internal
deep decarbonisation by 2050 is only possible
combustion engine to propel the car. EVs could
if hydrogen plays a major role in the long
also have a significant role in improving urban
term (FCHJU, 2015; Ribera and Sachs, 2015).
air quality, reducing primary energy waste and
The use of electrolytic hydrogen as an energy
diversifying the supply of primary energy in
storage option in the gas grid, transportation or
transportation (O’Malley et al., 2016).
industrial sectors provides an effective way to
absorb excess energy and is a key application
for this technology (Qadrdan et al., 2015; Patel,
2012; Schoenung, 2011).

22
Electrified transport makes use of existing
infrastructure, but a charging infrastructure is
required and the additional load incurred even
with just 30% uptake of EVs, can lead to up to
7% higher national demand peaks (van Vliet et
al., 2011; ETI, 2016).

Household electricity consumption for EV


owners is estimated to increase by 54% in
developed nations (Van Vliet et al., 2011),
requiring upgrades and expansions to
distribution networks (Srivastava et al., 2010).
Hydrogen could be generated during low
demand periods for later use and offers the
opportunity for much cleaner air, as hardly any
pollutants are emitted (Demirdöven and Deutch,
2004), but costly infrastructure would need
to be built to store and distribute hydrogen
(Johansson and Åhman, 2002).

Vehicle to Grid (V2G) can help to increase


integration and flexibility in an energy system,
and make better use of variable renewable
electricity (Lund and Kempton, 2008). V2G
involves two-way communication between
BEVs or plug-in hybrids and the grid, to enable
the electricity stored in vehicle batteries to be
injected into the grid during peaks of demand,
and withdrawn to vehicle batteries during
periods of excess production from renewables
(Concept Consultancy, 2016; Lund and Kempton,
2008).

Demand management of electric vehicles, for


example through Time of Use tariffs, can help
Systems Integration
to reduce balancing and network reinforcement
costs (ETI and TRL, 2016). V2G may also lead
4 Realising Energy

to greater use of renewables locally, although


degradation of lithium ion batteries and the
impact of V2G on battery lifetimes is a concern
(Uddin et al., 2018; Concept Consultancy, 2016).

The emergence of driverless vehicles offers


opportunities for changing travel patterns
and associated time-of-use energy demand,
particularly if vehicle use is shared between
users through on-demand mobility services,
as an alternative to private purchase and
ownership (Wadud et al., 2016).
Unlocking the potential
of Energy Systems Integration

5 Policy, Modelling
and Research Opportunities

5.1 Policy Opportunities from simulation and modelling studies. To


achieve this aim, simulations should include a
Strong policy support is needed to integrate comprehensive range of energy technologies
significantly higher shares of variable renewable and controllable devices and use large energy
energy in time to mitigate climate change, data sets in building future scenarios (Ruth and
involving radically different forms of grid Kroposki, 2014).
planning and operation (Bazilian et al., 2013).
Market arrangements will need to reward
Various regulatory approaches are required to new and different types of flexibility, e.g.
integrate renewable energy effectively and these by improving the business case for power
include: companies to invest in conventional generation
technologies which have significantly enhanced
» Early engagement with the public, especially
flexibility (Strbac and Aunedi, 2016).
for new transmission capacity.
Policy strategies are required that facilitate
» Coordinated and integrated planning across
the optimisation of cogeneration and efficient
supply and demand and centralised and
DHC in integrated, low carbon energy systems.
distributed resources.
Such strategies may include streamlining grid
» The development of market rules to promote interconnection standards to use the flexibility
system flexibility (Cochran et al., 2014). potential of cogeneration and coordinating the
development of plans to deploy infrastructure
Energy supply systems and institutions are at local, regional and national levels with the
traditionally fragmented and separated development of smart business models for
and Research Opportunities

according to specific energy carriers, e.g. energy networks (IEA, 2014).


with independent markets and regulatory
frameworks for electricity, natural gas and The efficient use of energy can be promoted by
oil. A whole systems approach is required in creating market conditions where fuel prices are
which one single party has responsibility for transparent and fair and reflect the actual cost
optimising technical performance across the of heat and electricity generation. However, the
energy system (i.e. across different energy IEA cautions against applying cross-subsidies
5 Policy, Modelling

carriers) (Abeysekera et al., 2016). To a large between heat and electricity markets because
degree, electricity and gas supplies remain they may lead to energy prices which are
compartmentalised in national markets with artificially imbalanced (IEA, 2014).
insufficient physical interconnections.
Although different countries in the EU, the USA,
Innovation in the design of markets, policies China, Japan, Russia and Brazil have designed
and regulation may be required to facilitate and implemented energy policies to support the
coordination between different energy systems deployment of CCHP, significant regulatory, market
and realise the potential benefits of energy and financial barriers remain. In particular, a
systems integration (Abeysekera et al., 2016). technical standard for net metering interconnection
In order to effectively design markets and needs to be developed, together with guidelines
regulation to support energy system integration, on the role of distributed energy production in the
decision makers require objective information energy supply network as a whole (Jradi and Riffat
2014).

24
5.2 Modelling Opportunities From the review, the authors (Ibid.) classify the
energy tools into different types that include the
Powerful simulation and optimisation tools are following:
required to consider the various complexities
of integrating energy systems and carry out » Simulation tools model how an energy system
operational and planning analysis across operates in order to supply particular energy
technical, economic, energy efficiency and demands. They are typically run at hourly time-
environmental objectives. Different models are steps over a period of one year.
designed to address different scales and types
» Operation optimisation tools are typically also
of energy systems integration, from integrating
simulation models and optimise the operation
renewable energy at a national level to a focus
of a particular energy system.
on distributed generation at a community level
and for individual buildings (Mancarella, 2014). » Scenario tools aggregate a series of years into
a long-term scenario. They usually combine
A review of 37 different computer tools used for
one year time-steps into a scenario of 20-50
the analysis of renewable energy integration in
years.
energy systems found they vary considerably.
Particularly in terms of their scientific objectives, » Investment optimisation tools are typically
technologies considered, time parameters also scenario tools and optimise investments
applied and energy sectors and systems in an energy system, such as new power
within which renewable energy was integrated stations and technologies.
(Connolly et al., 2010).

TABLE 1: COMPARISON OF DIFFERENT ESI TOOLS AND ANALYSIS FEATURES

RETScreen EnergyPLAN DER-CAM eTransport

Operation Yes Optimisation Optimisation No

and Research Opportunities


Planning Yes No Optimisation Optimisation

Network Yes No No Optimisation

Resolution Monthly Hourly Hourly/Variable Hourly

Time scale Annual Annual Lifetime Lifetime


5 Policy, Modelling
Unlocking the potential
of Energy Systems Integration

Table 1 compares the characteristics of some RETScreen can assess initial techno-economic,
typical simulation tools used for modelling environmental and financial aspects of energy
energy systems integration. These models and projects at a low time resolution of monthly time
their comparative capabilities are considered in steps (e.g. system balancing in an integrated
detail by Mancarella (2014) and relevant parts of system with renewable energy, storage and
this assessment are highlighted here. demand response).

» RETScreen was developed by the Canadian EnergyPLAN is an appropriate choice for


government (Natural Resources Canada, 2017) conducting analysis on alternative energy
and is a scenario-based tool which can be system operational paradigms, since it
used to support the planning and operation of can perform cost-based optimisation to
integrated energy systems across a range of evaluate hourly interaction between different
scales. technologies – e.g. renewable energy and CHP.

» EnergyPLAN is an operational optimization While DER-CAM can be used to conduct


tool which accounts for electricity, heat and investment analysis over a project lifetime, this
transport supply options at regional and tool is focused on electric microgrids and is also
national scales (EnergyPLAN, 2017). constrained geographically in its application.
eTransport is the only tool in Table 1 which
» DER-CAM is, similarly, an optimisation can provide an analysis of optimal energy
model which can be applied to the design system growth, while accounting for network
of polygeneration microgrids (Marnay et al., development for regional or district systems
2008), by simulating the optimal operation (Mancarella, 2014).
patterns of best technologies selected
to supply electricity, heat and cooling in
microgrids under specific cost conditions.

» eTransport (Bakken et al., 2007) is an optimal


investment planning tool for local energy
systems and networks, which optimises the
and Research Opportunities

life cycle cost of energy supply for a specific


geographical area and a long-term planning
time horizon, while also optimising hourly
operation for typical days.
5 Policy, Modelling

» B OX 3: Case Study: Integration of the German heat and


electricity sector with 100% renewable supply
Background, purpose and vectors: Evaluating scenarios in which solar PV, wind and
hydroelectricity supply heat and electricity demand in Germany with 100% renewable energy.
The study assesses annual energy system costs and aims to understand how different sets of
technologies can be best combined in the overall system, i.e. renewable energy converters,
storage units, energy converters and energy-saving measures (Palzer and Henning, 2014).

Method: The authors have developed a model called REMod-D (Renewable Energy
ModelDeutschland) which seeks to minimize total annual costs by optimizing the sizing of
energy producers, converters, storage devices and consumers (Palzer and Henning, 2014).

26
» B OX 3: Continued
The study investigates different scenarios which meet German space heating, hot water and
electricity demand with 100% renewable supply. These scenarios include different conditions
to evaluate separately the influence of electricity imports, a certain percentage of fossil fuel
use and energy retrofit interventions in buildings.

REMod-D generates hourly energy balances for the integration of electricity and heat
resources (an example output is shown in Figure 1). The model includes five different types
of energy storage: pumped hydro-power storage and batteries, gas storage (typically in large
caverns), power-to-gas (from renewables) and centralized / decentralized heat storage.

FIG 1: ELECTRICITY GENERATION AND USE DURING A SUMMER WEEK: EXAMPLE REMOD-D OUTPUT
(CHP=COMBINED HEAT AND POWER; PHPS=PUMPED HYDRO-POWER STORAGE; HP=HEAT PUMP)

and Research Opportunities


5 Policy, Modelling

Source: Palzer & Henning (2014)

Findings: The results indicate that it is technically feasible to supply the electricity and heat
sectors in Germany with 100% renewable energy and that the total annual cost would be
comparable to current costs following energy system transformation. The modelled future
energy system relies upon long-term storage capacity and some renewable gas production
during hours with low wind, solar PV or hydroelectric generation.

Limitations and research gaps: The model used in this study does not represent the whole
energy system – it covers the electricity and heat sectors, equivalent to approximately 62%
of Germany’s current energy demand.
Unlocking the potential
of Energy Systems Integration

5.3 Research opportunities While many of these technologies have


much to offer by themselves, their value is
Identifying and defining the full range of enhanced when used in conjunction with
benefits of ESI is an emerging field of research, other technologies and mechanisms, such as
recognising that, in addition to their economic curtailment (Barton and Infield, 2004). More
value, including capital and operational studies which quantify the multiple services
savings, low carbon energy systems which work enabled by using technologies and systems
well together offer environmental and social together are needed (Bhatnagar and Loose,
improvements which can be indirect and difficult 2012), to showcase the benefits of co-operative,
to quantify. integrated deployment and design suitable
compensation mechanisms for these services.
A set of consistent performance metrics
for integrated energy systems and their Modelling of integrated energy systems is at a
shared technologies need to be defined relatively early stage of development. Energy
and incorporated into analysis tools for systems models for techno-economic analysis
quantitatively assessing the full benefits from a should be fully-integrated to include electricity,
whole-systems perspective, looking particularly heat and transport and need also to account
at the interplay between technical, economic, for the synergistic benefits of energy efficiency
market and regulatory issues. and demand response. Additional studies are
required which evaluate the feasibility and
Research into assessment criteria for quantifying
market-design impacts of integrating multiple
interdependencies and matching these against
energy sources in future scenarios and which
performance would identify those benefits which
quantify the associated flexibility value of multi-
can be specifically attributed to integration,
energy integration (Ruth and Kroposki, 2014).
as opposed to the benefits of the energy
systems by themselves (Abeysekera et al., Software tools and models will be needed to
2016). In addition to techno-economic benefits, plan and coordinate the design, operation and
additional or indirect benefits of energy systems development of integrated energy systems.
integration such as environmental and social In particular, these tools should consider how
services, need to be identified, quantified and different energy systems interact within different
and Research Opportunities

assessed (Montoya et al., 2013). system boundaries and at different geographical


scales, from community through to international
A better understanding of the benefits could
scales (Abeysekera et al., 2016).
help policymakers and research funders to set
targets for development and design appropriate Management tools for distributed resources will
rules and regulations which favour those become increasingly important as the share of
configurations which have been found to be these technologies grows and the complexity of
5 Policy, Modelling

optimal. situations arising from deployment of multi-


agent systems opens up a new field of research
Research into the benefits of enabling
(Coelho et al., 2017).
technologies, such as energy storage, microgrids
and demand-side response, has tended to Multisystem simulations incorporating a
consider single technologies or a single service high spatial and temporal resolution enable
from these technologies, rather than a hybrid new insights into the interconnections and
portfolio (Nolan and O’Malley, 2015; Castillo and interdependencies between systems and
Gayme, 2014). identify advantages and disadvantages. These
simulations in turn require increased validation
against real world data and more studies which
model the dynamic behaviour of coupled energy
systems (Abeysekera et al., 2016).

28
6 Conclusions

This report has considered the role of increased structures and moves towards a model of
energy systems integration in transitioning to low providing energy services such as heat, light or
carbon, more flexible, resilient and reliable energy mobility across the system.
systems. It has identified different opportunities
presented by energy systems integration and the » Innovation in the design of markets, policies and
role of various energy distribution infrastructures, regulation is required to facilitate coordination
transport, markets and modelling tools. between different energy systems and realise the
potential benefits of energy systems integration.
Such opportunities include cross-vector integration, Market arrangements will need to be changed
the incorporation of flexibility services in the so that they reward new and different types of
energy system such as interconnectors, flexible flexibility, e.g. by improving the business case
generation, storage and demand-side response for power companies to invest in conventional
and the embedding of smart technologies in generation technologies which have been
interdependent energy systems for more accurate modified to significantly enhanced flexibility.
prediction of weather events and faster response to
power outages. » Research into the benefits of enabling
technologies, such as energy storage, microgrids
Diversifying energy sources and increasing cross- and demand-side response, has tended to
vector integration and flexibility can strengthen consider single technologies or a single service
the energy system, improving both reliability and from these technologies, rather than a hybrid
resilience, while the integration of storage and portfolio. More studies which quantify the
greater flexibility in the electricity grid can avoid multiple services enabled by using technologies
the costs of building, extending and maintaining and systems together are needed to showcase,
distribution infrastructure. quantify and validate the benefits of co-operative,
integrated deployment and design suitable
6.1 Key points compensation mechanisms for these services.

» Potential benefits of ESI include more efficient There are many challenges involved in realising the
use of energy resources, especially in capturing potential of greater energy systems integration.
and using waste heat, aiding decarbonisation These include, but are not limited to, the complexity
by enabling electricity and lower-carbon of highly integrated energy systems, a need to
fuels to provide energy services traditionally overcome the fragmented nature of institutions
provided by higher-carbon sources and increase and market structures in different energy sectors
system security and resilience by allowing the and the multidisciplinary efforts in research and
incorporation of a more diverse set of energy development that will be required to bring about
a fully integrated, low carbon energy system.
6 Conclusions

sources.
Traditional market structures for the energy sector
» Integration of energy systems may occur at are fragmented and require careful redesign to
various scales, linking different energy sources, ensure that the overall system’s needs are met,
technologies and services from individual low carbon technologies are favoured and all
buildings and customers through to community, participants have access to revenue streams. These
city, regional, national and international scales. challenges open up new avenues for research and
their solutions require a new approach, involving
» ESI can also provide opportunities for new
multidisciplinary expertise and holistic analysis of
business models, innovation and market
the entire system.
Unlocking the potential
of Energy Systems Integration

7: List of Acronyms

AMI Advanced Metering Infrastructure


BEIS Department of Business, Energy and Industrial Strategy
BEV Battery Electric Vehicle
CCGT Combined-cycle Gas Turbine
CCHP Combined Cooling, Heat and Power
CCS Carbon Capture and Storage
CHP Combined Heat and Power
CO2 Carbon Dioxide
DECC Department of Energy and Climate Change
DH District Heating
DHC District Heating and Cooling
DMG Distributed Multi-Generation
ESI Energy Systems Integration
EU European Union
EV Electric Vehicle
FCEV Fuel-cell Electric Vehicle
ICT Information and Communication Technology
IEA International Energy Agency
iiESI International Institute for Energy Systems Integration
IoT Internet of Things
IPCC Intergovernmental Panel on Climate Change
NOx Nitrogen oxides
OECD Organisation for Economic Co-operation and Development
Ofgas Office of the Gas Markets
Ofgem Office of the Gas and Electricity Markets
P2G Power To Gas
7: List of Acronyms

P2L Power To Liquid


PMU Phasor Measurement Units
REA Rapid Evidence Assessment
TJ Tera-joule
TRU Transport Refrigeration Units
ULEV Ultra-low Emission Vehicle
VPP Virtual Power Plant

30
8 Annex: Methodology:
The Rapid Evidence Review approach

The review of literature presented in this briefing Evidence has been identified through keyword
paper follows a rapid evidence assessment (REA) searches of two databases: Elsevier Science
approach developed by the UK Energy Research Direct (for academic literature) and Google (for
Centre (Speirs et al., 2015). For the purposes of grey literature), using Boolean combinations of
this study, an REA was carried out to establish relevant terms. Google was employed as a first
what evidence is available in academic and grey step in identifying grey literature and specific
literature on different types of ESI and their websites which host relevant material.
role in facilitating decarbonisation, increased
flexibility and higher penetrations of renewables
in current and future energy systems. The REA
also set out to extract benefits, opportunities,
challenges and policy gaps related to ESI.

TABLE A1: KEYWORDS USED TO IDENTIFY RELEVANT LITERATURE IN SCIENCE DIRECT AND GOOGLE

The Rapid Evidence Review approach


Technology Vector Demand Integration Intended /
infrastructure outcome

electric* water “end use*” “energy systems flexib*


integration”
renewable gas demand decarb*
integrat*
bio* transport DSR carbon
co-ordinat*
CHP heat prosumer* “climate change”
plan*
coal hydrogen customer “emissions”
multiple
fuel vector consumer
8 Annex: Methodology:

joined-up
energy pathway market
synerg*
power* thermal
cross*
“energy waste
system” interface
storage holistic
batter* whole
vehicle multi-scale
infrastructure nexus
interconnector aggregat*
grid
network
smart
Unlocking the potential
of Energy Systems Integration

For the database searches, technology/ Following the filtering of retained search
infrastructure keywords were combined with results, key descriptive information relating
vector, demand, ESI and intended outcome to the criteria for relevance was captured. The
keywords identified from a preliminary search geographic scope of the evidence considered
of literature related to ESI, variables renewables was global, but with a focus on OECD countries.
and decarbonisation (see Table A1). Returned Three ‘real world’ and three ‘modelling’ case
results were filtered for relevance based on their studies were selected from the review of the
title and abstract. If this was not sufficient to literature to demonstrate current, emerging and
determine relevance, further inspection of the potential future examples of energy systems
main text was performed. integration ranging from building scale, through
to national scale and integration of small island
The criterion for relevance was that, in relation energy systems.
to energy systems integration, the document
considers some or all of the elements: In addition to the keyword searches of literature
databases, evidence considered to be relevant
» Current and potential types of ESI in according to the above criteria has been
development or in an early stage of gathered from key research organisations
deployment and their purpose and role in working in the field of energy systems
current and future energy systems integration, in particular:
» Benefits of implementing additional or » National Centre for Energy Systems
enhanced types of ESI, over and above Integration, Newcastle University
existing forms of ESI
The Rapid Evidence Review approach

» National Renewable Energy Laboratory –


» Drivers and challenges in implementing these Energy Systems Integration Facility
new forms of ESI including research and
knowledge gaps » International Institute for Energy Systems
Integration
» Policy approaches used to support new forms
of ESI required for decarbonisation, greater » European Energy Research Alliance
flexibility and increased deployment of
renewable energy » Energy Technologies Institute

» Case studies of real world examples of energy » National Grid


8 Annex: Methodology:

systems integration which aim to achieve » Hubnet (a consortium of researchers from


increased decarbonisation or flexibility in eight universities – including Imperial College
energy systems London – tasked with coordinating research on
» Modelling case studies drawn from examples energy networks in the UK).
of how energy systems integration could The review of secondary evidence has been
help to achieve greater decarbonisation supported through consultation with a
or flexibility in incorporating intermittent small group of internal and external experts,
renewable energy / managing different energy representing a variety of opinions and
demands. perspectives, to advise the project team and
provide expert feedback. The project team
obtained feedback on interim drafts of this
report through meetings with external experts at
the National Grid, Energy Technologies Institute
and two internal experts: Marco Pantaleo and
Marko Aunedi at Imperial College London.

32
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38
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