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Estimating the revenue potential of flexible biogas plants in the power sector

Lauven, Lars-Peter, Geldermann, Jutta, Desideri, Umberto
Energy policy 2019 v.128 pp. 402-410
algorithms, biogas, economic feasibility, economic sustainability, electricity generation, equipment, income, islands, models, power generation, prices, supply balance, system optimization, Germany, Italy, Sardinia
The expansion of intermittent renewable power poses new challenges: Balancing fluctuations in power supply and demand requires additional flexibility. In this work, we model a unit commitment optimization problem to investigate the economic feasibility of concepts for flexible power generation from biogas. Because the economics of flexible power generation also depend on the availability of other flexibility options, we compared flexible biogas plants in power markets with different characteristics, namely Germany, northern Italy, and the islands of Sardinia and Sicily.Using an algorithm to optimize the constrained mixed-integer unit commitment of biogas plants, we determine hourly optimal production schedules in each region based on the prices from 2008 to 2017. The algorithm helps to assess whether the investment for equipment that required for flexible electricity production, such as a larger generator and storage facilities, would have been justified by the likely additional revenue in the investigated period.Our results show that the premium that flexible biogas plants can earn over non-flexible ones has decreased significantly between 2008 and 2017 in all investigated regions. Since 2015, additional incentives have been indispensable in all four investigated regions to make the concept of producing power from biogas flexibly economically viable.