New stochastic optimisation model for Scandinavia

In future, the Scandinavian power supply system will have closer connections with Europe and an increasing proportion of uncontrollable renewable generation from, for example, wind and unregulated hydroelectric systems. There is therefore a need to develop a new model which takes into account unpredictable fluctuations in unregulated generation.

Power supply systems and energy markets on the Continent are evolving rapidly.

Scandinavian market players and system operators are faced with major investment decisions connected with possibilities for improved flexibility of the generation system (power output expansions and pumping schemes) and an increase in the number of cable connections to Europe.

From a Norwegian perspective, it is important to make sustainable decisions as to whether to invest in additional cables to the Continent and improvements in the flexibility of the hydroelectric generating system. Co-ordinated development of flexibility in the generating system and cables to other countries will call for accurate and verifiable modelling which documents the profitability and consequences of investments. The benefit of flexibility will increase and correct assessment of its value will become increasingly important.

In the Norwegian Research Council’s project “Stochastic optimisation model for Scandinavia with individual water values and grid restrictions”, the aim is to develop a computer program to simulate the northern European power supply market using individual water values in Scandinavia. The operation of each individual hydroelectric reservoir shall be based on the result of formal stochastic optimisation in which all the relevant physical attributes of the market are represented.

Arild Helseth  

Birger Mo  

Market Model including induvidual water values and power flow constraints