Lecture 9 Power Sector Analysis

Gang He

October 24, 2022

Sample analytic questions

  • How much solar and wind capacity need to be built?
  • How cost delince of renewables and storage will change the capacity and generation mix of the power sector?
  • How much new transmission capacity is needed to harvest the benefits of interconnection?
  • Does CCS has role to play in the power sector decarbonization?

Power sector’s central role

Overarching strategy

  • Electrification
  • Decarbonization

Why power sector is special?

  • Essential good
  • Infrastructure
  • Technology/network complexity: balance on real-time
  • Supply/Demand inelasticity
    • Capital intensive
    • Investment takes time

U.S. electricity flow

U.S. transmission grid

Refresh the basics

  • Energy and power
  • kW, MW, GW, TW
  • Heat rate and efficiency (Carnot, 1st, 2nd)
  • Thermodynamics

Load factor and load curves

\(LF=\frac{Energy\ consumed}{Energy\ at\ peak\ demand}=\frac{Average\ power}{Peak\ power\ demand}\)

A low load factor means a “peaky” load shape

Supply curve and dispatch

Power system modeling family

Type Production Cost (Unit Commitment and Dispatch) Network Reliability (AC Power Flow, Dynamics) Capacity Expansion
Generator Adequacy Yes No Often
Flexibility Requirement Yes No Somewhat
Transmission Adequacy Partially Yes Typically No
Gen Contingencies Somewhat Yes No
Transmission Contingencies Somewhat Yes No
Frequency Stability Somewhat Yes No
Voltage Stability, Voltage control No Yes No
Examples PROMOD, GE-Maps, PLEXOS, GridView Positive sequence load flow (PSLF), power system simulator for engineering (PSSE) NEMS, ReEDS, SWITCH, Grid-path, GenX, PyPSA, Haiku

Capacity expansion models

  • Capacity expansion models simulate generation and transmission capacity investment, given assumptions about future electricity demand, fuel prices, technology cost and performance, and policy and regulation
  • What mix of generators should we build to meet load?
  • Does a policy affect cost of service regions and competitive regions in different ways?

Strength and limits

  • Strength: Examine the impacts of power sector policies (or alternative technology/fuel trajectories) on the generation and capacity mix in the mid-to long-term
  • Limits: Many do not have chronological unit commitment (i.e., every hour of the year chronologically); some use aggregate (model) plants for dispatch; transmission and power flow are a stylized representation (transport or DC)
  • Example questions: Quantifying the impacts of environmental policies on generation and capacity? What are the cost implications of alternative pathways to a low greenhouse gas emissions future? How will alternative future prices of natural gas impact capacity investment? What is the change in consumption and expenditures? What are the efficiency and distributional effects of various policy designs?

Model comparison

SWITCH Model as an example

Key questions in model selection

  • Spatial: 
    • Geographic: state, regional, national, international
    • Cost of service vs. competitive regions
  • Temporal: time of day, seasons, annual, decadal
  • Time steps: Building new capacity, dispatch
  • Time horizon: near (2025), medium(2030), long (2050)
  • Generating units: individual plants or model plants, representation of capital costs and other production costs
  • T&D: pipeflow, transport, DC powerflow, aggregated
  • Representation of renewables: RE technologies, availabilities, accessibility cost, variability
  • Link with economy wide model, environmental constraints

Typical output: capacity/generation mix

Typical output: transmission expansions

Unit committment and network reliability

  • Unit Commitment Model: Simulate detailed (hourly to sub-hourly) operation of a given system; Assess resource adequacy and other aspects of reliability of a system; Analyze the impact of changes in the system (e.g., retirement/addition of capacity) on system operation; Assess transmission congestion and locational marginal prices; Describe the daily pattern of emissions
  • Network Reliability Model: Detailed simulations of the transmission network including dynamic events that can occur in seconds (and cause big problems); these models aren’t run on a day to day basis –they are only run to examine significant changes to an existing system


  • Power sector’s central role in decarbonization
  • Capacity expansion model to analyze the optimized investment decisions
  • Decisions in the real world is much more complicated
  • Emerging trends in the power sector


He, Gang, Jiang Lin, Froylan Sifuentes, Xu Liu, Nikit Abhyankar, and Amol Phadke. 2020. “Rapid Cost Decrease of Renewables and Storage Accelerates the Decarbonization of China’s Power System.” Nature Communications 11 (1): 2486. https://doi.org/10.1038/s41467-020-16184-x.
Johnston, Josiah, Rodrigo Henriquez-Auba, Benjamı́n Maluenda, and Matthias Fripp. 2019. “Switch 2.0: A Modern Platform for Planning High-Renewable Power Systems.” SoftwareX 10: 100251. https://doi.org/10.1016/j.softx.2019.100251.
Masters, Gilbert M. 2013. Renewable and Efficient Electric Power Systems. John Wiley & Sons.