Economic and welfare analysis of integrated scheduling of hydrothermal power and natural gas systems: the Argentinian case

Abstract

The growing interplay between natural gas and electricity systems can be traced back to the increasing installation of natural gas fired power plants. Indeed, these generation units are significant demands for the gas system while they are important producers in the power system. This interrelationship has driven the need to model in detail these energy carrier systems in combined manner to properly capture these interactions and to optimize the management of energy resources from a centralized planning perspective. Presently, most electricity and natural gas systems are operated and optimized separately. Natural gas prices and available volumes for the electric power generation are used as fixed parameters for targeting coordination between both energy sectors. Nevertheless, this approach to coordination leads to substantial deadweight losses for both energy systems. With the aim of quantifying the economic impact of integrating the operational planning of both energy carriers, this paper assesses and compares the medium term scheduling of power and natural gas systems when the systems are considered in a coupled and decoupled manner. In order to obtain realistic results, the Argentinean energy system is used as exemplary case study including their associated power and gas networks.