**1. Introduction**

196 Modeling and Optimization of Renewable Energy Systems

Rösch, C.; Skarka, J.; Raab, K. & Stelzer, V. (2009). Energy production from grassland –

Rychnovská, M. & Parente, G. (1997). Grassland and Environment: (I) Mutual effects and (II)

Schellberg, J.; Möseler, B.M.; Kühbauch, W. & Rademacher, I.F. (1999). Long-term effects of

*Science*, Vol.54, No.3, (September 1999), pp. 195-207, ISSN 0142-5242 Sims, P.L. & Singh, J.S. (1978). The structure and function of ten Western North American

Vol.88, No.2, (November 2010), pp. 197-213, ISSN 1385-1314

8698-15-1, Brno, Czech Republic, September 7-9, 2009

No.3, (August 1994), pp. 405-412, ISSN 0021-8901

Vol.4, No.2, (April 1993), pp. 203-212, ISSN 1100-9233

pp. 547-550, ISSN 0028-0836

Wallingford, United Kingdom

0015-5632

ISBN 0-444-98669-3, Prague, Czech Republic

Warszawa-Łomża, Poland, May 19-23, 1997

Assessing the sustainability of different process chains under German conditions. *Biomass and Bioenergy*, Vol.33, No.4, (April 2009), pp. 689–700, ISSN 0961-9534 Rychnovská, M. (1993). Functioning of grasslands in the landscape. In: *Structure and* 

*functioning of seminatural meadows*, Rychnovská, M. (Ed.), pp. 341-360, Academia,

Agricultural aspects, *Proceedings of Management for grassland biodiversity*, 9*th of the European Grassland Federation Symposium*, pp. 173-183, ISBN 83-908158-1-8,

fertilizer on soil nutrient concentration, yield, forage quality and floristic composition of a hay meadow in the Eifel mountains, Germany. *Grass and Forage* 

grasslands: IV. Compartmental Transfers and Energy Flow within the Ecosystem. *Journal of Ecology*, Vol.66, No, 3 (November 1978), pp. 938-1009, ISSN 0022-0477 Straka, F.; Dohányos, M.; Zábranská, J.; Jeníček, P.; Dědek, J.; Malijevský, A.; Novák, J.; Oldřich, J. & Kunčarová, M. (2006). *Bioplyn*, GAS, ISBN 80-7328-090-6, Prague, Czech Republic Soussana, J.-F. & Tallec, T. (2010). Can we understand and predict the regulation of

biological N2 fixation in grassland ecosystems? *Nutrient Cycling in Agroecosystems*,

state and changes in grassland in the past year, *Proceedings of Alternative functions of grassland, 15th of the European Grassland Federation Symposium*, pp. 1-10, ISBN 978-80-

decomposing plant materials in an upland grassland near Kameničky, Czechoslovakia. *Folia Microbiologica*, Vol.25, No.2, (March 1980), pp. 162-167, ISSN

nitrogen fertilizer application in cut grassland. *Journal of Applied Ecology*, Vol.31,

persist under phosphorus limitation. *Nature*, Vol.437, No.7058, (September 2005),

richness resulting from selective nutrient additions. *Journal of Vegetation Science*,

species and its role in a *Leymus chinensis* steppe community of Inner Mongolia, China. *Acta Ecologica Sinica*, Vol.27, No.11, (November 2007), pp. 4443-4451, ISSN 1872-2032 Zechmeister, H.G.; Schmitzberger, I.; Steurer, B.; Peterseil, J. & Wrbka, T. (2003). The influence

of land-use practices and economics on plant species richness in meadows. *Biological* 

Stypiński, P.; Hejduk, S.; Svobodová, M.; Hakl, J. & Rataj, D. (2009). Development, current

Úlehlová, B. (1980). Contents, accumulation and release of energy in green, dead and

Van Der Woude, B.J.; Pegtel, D.M. & Bakker, J.P. (1994). Nutrient limitation after long-term

Wassen, M.J.; Venterink, H.O.; Lapshina E.D. & Tanneberger, F. (2005). Endangered plants

Whitehead, D.C. (1995). *Grassland Nitrogen*, CABI Publishing, ISBN 0-85198-915-2,

Willems J.H.; Peet R.K. & Bik L. (1993). Changes in chalk-grassland structure and species

Yajing, B.; Zhenghai, L.; Xingguo, H.; Guodong, H. & Yankai, Z. (2007). Caloric content of plant

*Conservation*, Vol.114, No.2, (December 2003), pp. 165-177, ISSN 0006-3207

The world's natural gas market is rapidly global zing. Traditionally, gas supplies for electric power generation have been delivered entirely within regional markets—usually with little geographical distance between the source of gas and its ultimate combustion. However, a significant and growing fraction of world gas is traded longer distances via pipeline and, increasingly, as LNG. The rising role of LNG is interconnecting gas markets such that a single global market is emerging.

This chapter discusses in a form not referenced in the literature in a convenient form heretofore the impacts of this globalization on the power generation industry. The electricity supply industry is increasingly turning to natural gas fuelled plants. Discussed in relation to the major gas producing and gas consuming regions is demand, infrastructure, price impacts and the possible responses of the power industry.

#### **2. Modeling and analyzing impact of interdependency between natural gas and electricity infrastructures**

With increasing investment in natural gas powered generation technologies, limitations in gas delivery capabilities are becoming increasingly relevant to operational planning of electric power systems. Thus it is essential to model and analyze the impact of the interdependency between natural gas and electricity infrastructures. Through integrated modeling of the two infrastructures, critical energy infrastructure vulnerabilities can be identified, thereby providing useful information for future planning of the natural gas delivery system and the electric power system.

A nation's energy security and sustainability that depends primarily on its energy infrastructure's security and sustainability are of critical importance to a nation's economic competitiveness and the improvement of people's daily lives. Natural gas infrastructure and electricity infrastructure are two essential elements of the nation's energy infrastructure.

Globalization of the Natural Gas Market on

prevailing constraints listed as follows:

4. Must-on and area protection constraints 5. Fuel and multiple emission constraints 6. Transmission flow and bus voltage limits 7. Load shedding and bilateral contracts 8. Limits on state and control variables

A complete model can be found in [6-8].

or Benders decomposition [6,7].

**2.2 More realistic modeling** 

power system operation.

2. System spinning and operating reserve requirements

**2.1.3 Gas pipeline and electrical network interdependency** 

**2.1.2 Electrical network model** 

characteristics of units

9. Scheduled outages.

[5].

1. Power balance

Natural Gas Prices in Electric Power Generation and Energy Development 199

The short-term operation of the electrical network can be simulated using a securityconstrained unit commitment (SCUC) model. The objective of SCUC is to determine a dayahead unit commitment (UC) for minimizing the system operating cost while meeting the

3. Minimum up/time limits, ramping up and down rate limits, start-up and shutdown

The coupling constraints between the gas and electrical network are the flow conservation constraints: the total gas entering a node is equal to the sum of the gas leaving the node and the total gas withdrawal. The inclusion of the flow conservation constraints enables gas usage limits to vary as a function of gas flow limitations instead of being fixed values. The current operating limitations on gas usage can therefore be directly represented in the problem. Mathematical formulations for the gas flow conservation constraints are given in

The addition of gas pipeline network modeling to SCUC will increase the size of the optimization problem in terms of number of variables and constraints. SCUC with gas pipeline network modeling is decomposed into two sub problems: UC and network analysis (NA). The UC problem is formulated for various types of generating units including thermal, combined-cycle, fuel switching, hydro, pumped storage, and renewable resources (wind or photovoltaic). The gas pipeline network model is incorporated as additional constraints in the UC problem for considering interdependency on gas network. A detailed MIP approach is applied to calculate the hourly unit commitment. The NA sub problem conducts security analysis based on the UC solution and coordinates with the UC problem through shift factor based method [9]

As the electricity industry becomes more and more dependent on natural gas-fired generation, limits in the natural gas delivery system are becoming increasingly relevant to

**2.1.4 Solution to the integrated gas network and electrical network model** 

It is reported that the majority (up to 90%) of the electric power plants that were built in recent years and will be built in the future are fuelled by natural gas [1, 2]. By 2030, generation by natural gas is expected to increase by 230%, the greatest relative increase of any generation technology [3].

Such rapid deployments have intensified the physical and economic interdependencies between natural gas and electricity infrastructures, which have introduced additional challenges for managing the security of such interdependent infrastructures. Specifically, the emergence of a large quantity of gas-fired units necessitates a more extensive gas supply and transmission infrastructure. This could greatly increase the vulnerability of gas pipeline infrastructure from the security aspect, and increase demand and thus market prices of natural gas from the economic viewpoint. There is evidence that natural gas usage for electric power in the summer may have a noticeable impact on working natural gas in storage and winter gas availability.

Conversely, the limitations of the gas delivery system become increasingly relevant to power system operations with the increased reliance on natural gas. An interruption or pressure loss in gas transmission systems could lead to a loss of multiple gas-fired electric generators that could jeopardize power system security. In the event of outages in gas transmission or power transmission systems, inconsistent control, monitoring, and curtailment procedures in the energy infrastructure could further constrain operations and may lead to cascading outages and blackouts.

The two infrastructure systems have become highly interdependent [4]. Gas market prices have a direct impact on unit commitment and economic dispatch in security-constrained power system operation. Changes in gas prices may mean the difference between using gas-fired units, or units which rely on coal or other fuels.

A framework for modeling the interdependency between natural gas and electricity infrastructures and impact of such interdependency on the economics and security of electric power system operation is necessary [5].

#### **2.1 Modeling the Interdependency between natural gas and electricity infrastructures**

#### **2.1.1 Gas network model**

**Pipeline Flow:** Gas pipelines are defined as either passive, for pipelines without a compressor, or active. For passive pipelines, the gas flows are determined only by the pressure difference. For active pipelines, a compressor allows the flow to exceed the pressure difference. Additionally, for active pipelines, the gas can only flow in one direction. A detailed mixed-integer-programming (MIP) based formulation can be found in [5].

**Gas Contracts:** Gas contracts may be modeled as interruptible, where the gas customer pays only for the amount of gas used, or take or pay, where the gas customer pays a fixed cost in advance for a specified amount of gas. In both cases, the total gas usage must be less than or equal to the contract amount. For interruptible contracts, the gas customer pays a fixed perunit price for the amount of gas used. For take-or-pay contracts, the gas customer pays a single fixed amount regardless of the gas actually used. Mathematical formulation for modeling gas contracts can be found in [5].

#### **2.1.2 Electrical network model**

The short-term operation of the electrical network can be simulated using a securityconstrained unit commitment (SCUC) model. The objective of SCUC is to determine a dayahead unit commitment (UC) for minimizing the system operating cost while meeting the prevailing constraints listed as follows:

1. Power balance

198 Modeling and Optimization of Renewable Energy Systems

It is reported that the majority (up to 90%) of the electric power plants that were built in recent years and will be built in the future are fuelled by natural gas [1, 2]. By 2030, generation by natural gas is expected to increase by 230%, the greatest relative increase of

Such rapid deployments have intensified the physical and economic interdependencies between natural gas and electricity infrastructures, which have introduced additional challenges for managing the security of such interdependent infrastructures. Specifically, the emergence of a large quantity of gas-fired units necessitates a more extensive gas supply and transmission infrastructure. This could greatly increase the vulnerability of gas pipeline infrastructure from the security aspect, and increase demand and thus market prices of natural gas from the economic viewpoint. There is evidence that natural gas usage for electric power in the summer may have a noticeable impact on working natural gas in

Conversely, the limitations of the gas delivery system become increasingly relevant to power system operations with the increased reliance on natural gas. An interruption or pressure loss in gas transmission systems could lead to a loss of multiple gas-fired electric generators that could jeopardize power system security. In the event of outages in gas transmission or power transmission systems, inconsistent control, monitoring, and curtailment procedures in the energy infrastructure could further constrain operations and

The two infrastructure systems have become highly interdependent [4]. Gas market prices have a direct impact on unit commitment and economic dispatch in security-constrained power system operation. Changes in gas prices may mean the difference between using

A framework for modeling the interdependency between natural gas and electricity infrastructures and impact of such interdependency on the economics and security of

**2.1 Modeling the Interdependency between natural gas and electricity infrastructures** 

**Pipeline Flow:** Gas pipelines are defined as either passive, for pipelines without a compressor, or active. For passive pipelines, the gas flows are determined only by the pressure difference. For active pipelines, a compressor allows the flow to exceed the pressure difference. Additionally, for active pipelines, the gas can only flow in one direction.

**Gas Contracts:** Gas contracts may be modeled as interruptible, where the gas customer pays only for the amount of gas used, or take or pay, where the gas customer pays a fixed cost in advance for a specified amount of gas. In both cases, the total gas usage must be less than or equal to the contract amount. For interruptible contracts, the gas customer pays a fixed perunit price for the amount of gas used. For take-or-pay contracts, the gas customer pays a single fixed amount regardless of the gas actually used. Mathematical formulation for

A detailed mixed-integer-programming (MIP) based formulation can be found in [5].

any generation technology [3].

storage and winter gas availability.

may lead to cascading outages and blackouts.

electric power system operation is necessary [5].

modeling gas contracts can be found in [5].

**2.1.1 Gas network model** 

gas-fired units, or units which rely on coal or other fuels.


A complete model can be found in [6-8].

#### **2.1.3 Gas pipeline and electrical network interdependency**

The coupling constraints between the gas and electrical network are the flow conservation constraints: the total gas entering a node is equal to the sum of the gas leaving the node and the total gas withdrawal. The inclusion of the flow conservation constraints enables gas usage limits to vary as a function of gas flow limitations instead of being fixed values. The current operating limitations on gas usage can therefore be directly represented in the problem. Mathematical formulations for the gas flow conservation constraints are given in [5].

#### **2.1.4 Solution to the integrated gas network and electrical network model**

The addition of gas pipeline network modeling to SCUC will increase the size of the optimization problem in terms of number of variables and constraints. SCUC with gas pipeline network modeling is decomposed into two sub problems: UC and network analysis (NA). The UC problem is formulated for various types of generating units including thermal, combined-cycle, fuel switching, hydro, pumped storage, and renewable resources (wind or photovoltaic). The gas pipeline network model is incorporated as additional constraints in the UC problem for considering interdependency on gas network. A detailed MIP approach is applied to calculate the hourly unit commitment. The NA sub problem conducts security analysis based on the UC solution and coordinates with the UC problem through shift factor based method [9] or Benders decomposition [6,7].

#### **2.2 More realistic modeling**

As the electricity industry becomes more and more dependent on natural gas-fired generation, limits in the natural gas delivery system are becoming increasingly relevant to power system operation.

Globalization of the Natural Gas Market on

over 60 per cent of the world's total.

**3.2 Gas market – Brief overview** 

**3.3 Generation options in UK** 

Coal

Oil & Gas

Fig. 1. Macro Economy Factors

**3.3.1 Planning principles** 

and supply.

various levels.

Natural Gas Prices in Electric Power Generation and Energy Development 201

one third of countries total fuel consumption. On the other hand the total power generation of the developing world (including Asia, Latin America and Middle East) is expected to be

From the projection of fuel inputs to power generation, coal and gas today represent about

The main participants in the gas industry are suppliers, infrastructure owners, distributors and consumers. Most of the existing contracts for supply of gas to the distributors in Europe and UK are long term contracts based on steady increase in demand. The current pressure to supply local areas with gas and electricity at a new development pace requires fast response from the suppliers, which is difficult to achieve at competitive prices under the existing contract terms. Hence major changes are expected in restructuring of those contracts to reflect the dynamic changes in heat and electricity demand. The new open market would also need to adjust by providing prompt changes in price in accordance with the demand

The changes in the gas supply industry are visible in that the suppliers now tend to target more than one market. In an open market the consumers would equally have a choice of

Figure 1 illustrates a relationship between the main factors in a country's economy at

National Economy

Global Interactions Regional Interactions

Macro Economy

Energy Sector

Biomass

Other

Demand Supply

suppliers that would therefore result in a reduction and optimization of prices.

66% of fuel inputs, and by 2030 it is expected that it will reach over 70%.

The incorporation of natural gas network modeling is a start to comprehensively analyze the interdependency between the natural gas and electricity infrastructures. The gas network model suggested here is a very simplified model. Gas storage is not modeled; only gas usage for electric power production is considered; other non-power gas usages, such as residential and commercial, and the associated impacts are not modeled. A more detailed gas network model should be employed for a more realistic study on a practical system, for which the availability of data may be an issue. In addition, the impact of the interdependency between natural gas and electricity infrastructures mainly from the perspective of power system operation should be considered as should impact of such interdependency on gas network operation.
