Flexible Distributed Multi-Energy Generation System Expansion Planning under Uncertainty

A key feature of smart grids is the use of demand side resources to provide flexibility to the energy system and thus increase its efficiency. Multi-energy systems where different energy vectors such as gas, electricity and heat are optimised simultaneously prove to be a valuable source of demand side flexibility. However, planning of such systems may be extremely challenging, particularly in the presence of long-term price uncertainty in the underlying energy vectors. In this light, this work proposes a unified operation and planning optimisation methodology for Distributed Multi-energy Generation (DMG) systems with the aim of assessing flexibility embedded in both the operation and investment stages subject to long-term uncertainties. The proposed approach reflects Real Options thinking borrowed from finance, and is cast as a stochastic Mixed Integer Linear Programme. The methodology is illustrated through a realistic UK based DMG case study for district energy systems, with Combined Heat and Power plant, Electric Heat Pumps, and Thermal Energy Storage. The results show that the proposed approach allows reduction in both expected cost and risk relative to other less flexible planning methods, thus potentially enhancing the business case of flexible DMG systems.