A decision model on grid replacement strategies for an energy distribution system operator

A decision model on grid replacement strategies for an energy distribution system operator

Geerlings, L.M.

Herder, P.M. (mentor)
Van der Lei, T.E. (mentor)
Bots, P.W.G. (mentor)
Engel, C.L.H. (mentor)

Technology, Policy and Management

Engineering, Systems and Services

Energy and Industry

2014-06-06

Dutch gas infrastructures are aged and need to be replaced in the next decades. Uncertainties surrounding the gas sector make it difficult to determine future requirements of the gas infrastructure. A decision model that analyses the performance of different replacement strategies under different scenarios of demand and supply is constructed. Part of Stedin’s network has been used as a case study. Decision variables were the replacement strategy’s capital expenditures and the maximal allowed sustainable gas feed-in. Sustainable gas feed-in entails biogas production and gas from the power-to-gas concept. From the analysis can be concluded that under high demand, more sustainable gas can be fed into the network than under low demand. The research also showed that the most important decision moments are 2015, 2020 and 2040. As replacement decisions on large parts of the infrastructure have to be made in these years. From the analysis can be concluded that there is not one specific replacement strategy that is efficient under all scenarios of demand and supply. Therefore, a flexible replacement strategy is required, this can be created by implementing real options: learning before investing and flexibility in the network capacity. The first real options creates a value 6.5 €M as it enables the network operator to steer away from over investments. However, if in the first 15 years a reducing strategy is chosen a lock-in is already created, switching to another strategy would be less sufficient. The second real options is only valuable when less than 550 m3/h of sustainable gas feed-in is expected. If more sustainable gas feed-in is required then it is more efficient to construct a storage facility. The model provides the network operator with an holistic view on the replacement task that lies ahead, what the costs of different replacement strategies are, and their direct effect on the performance of the physical network.

gas infrastructures
replacement strategy
investment under uncertainty
real options
decision model

http://resolver.tudelft.nl/uuid:d19c1cf9-5c8f-4493-b791-957f45a2b84a

Campus only

Student theses

master thesis

(c) 2014 Geerlings, L.M.