CRISP Type 1/Collaborative Research: Computable Market and System Equilibrium Models for Coupled Infrastructures

This interdisciplinary research will develop computational tools and public data sets to enable the joint modeling of interdependent energy infrastructures. The work is motivated by increasing interdependencies between the U.S. electric power and natural gas infrastructures. These interdependencies arise from the dual, increasing roles of natural gas as a base-load resource (replacing coal-fired power plants retiring for economic or environmental reasons) and a balancing resource (to smooth fluctuations in variable renewable energy generation). While natural gas brings environmental benefits over coal, the increased coupling between electricity and gas systems and markets have been difficult to model with existing tools. This research program will develop tractable computational tools and supporting data sets to enable analysis of the operational or economic risks associated with this increasing interdependence and to articulate the economic and social value from increased coordination in system planning, operations and clearing of markets. The research will be beneficial to the energy systems and policy research communities through the development and dissemination of analytical tools, and will help to inform evolving U.S. policy on coordination between energy infrastructures, including electric power and natural gas. This effort will involve an integrated and interdisciplinary collaboration between experts in energy economics, computer science and optimization that will enrich not only the research community but also the education of energy systems scholars from multiple fields.

The research team will create a framework for computable market and system equilibrium models that: capture non-linear aspects of AC power systems and the Weymouth gas flow equations; accurately represent the market institutions in electricity and natural gas that lead to price formation; and capture the cyclic dependence between price formation in spot natural gas markets and the price calculations in spot electricity markets. This framework will embed a market equilibrium model for natural gas within an optimization framework for the joint planning of natural gas and electric power systems. The approach will be implemented on a model of the U.S. northeastern power grid and natural gas pipeline system that is drawn from publicly-available information. The awarded research will demonstrate that this framework can produce sensible outcomes with acceptable computational performance, illustrate the framework on a series of test systems including the U.S. northeast test system, and demonstrate the value of integrated infrastructure planning for natural gas and electric power systems.