IEEE Power & Energy Magazine - January/February 2017 - 21

The inevitable penetration of variable generation
and electrification of heat and transport will lead to increasingly
variable operation of thermal dispatchable generators.
gas demand changes. Therefore, they not only contribute
to energy security by diversifying supply but also provide
operational flexibility.

Gas/Electricity Market Coordination
Gas and electricity markets interact via gas power plant
operators buying fuel on gas markets to generate power,
which is sold to the electricity market. Plant operators may
do this by trading in a variety of markets, i.e., from longterm contracts and forward markets until shortly before real
time. While longer-term transactions are mainly important
with a view to the need for sufficient gas network capacity,
flexibility needs are primarily driven by trading in the dayahead and intraday/within-day markets as well as the need
to provide ancillary services and balance energy to power
system operators in real time.
Electricity and gas markets are often operated in isolation on different time frames throughout the day and have
often failed to create a homogenous structure. Among others, some of the key challenges include the following:
✔✔ different time scales, such as the difference between
the "gas market day" (6 a.m.-6 a.m.) and the calendar day or the use of subhourly settlement intervals in
electricity systems
✔✔ a system of fixed "gates" (day-ahead and/or during the
day) at which electric power and/or network capacity
is traded in the electricity markets, as opposed to continuous trading in the gas market
✔✔ different product definitions and mechanisms for allocation of network capacities
✔✔ widespread use of interruptible network capacities in
the gas market.
As a result, gas plant operators may be required to commit to a
certain gas volume before knowing if their electricity market
bids have been accepted, or vice versa. As gas plant operators need to account for such risks in their bidding behavior,
this may result in a suboptimal market outcome and increased
costs to consumers. Similarly, gas network operators are often
unable to predict the variability in gas off-take induced by the
electricity market, making it difficult to manage diurnal flexibility (such as line pack) in an optimal way.
As the deployment of varRE progresses, limited market coordination may lead to serious risks for flexibility,
such as the need for quickly ramping up generation by gasfired power plants. In recent years, the lack of coordination
between gas and electricity has already threatened reliability. For instance, insufficient stocks of natural gas in local
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storage contributed to the need for rolling blackouts in Texas
in February 2011. Similarly, in February 2012, parts of the
power system in southern Germany were close to breakdown because the interdependence of the gas/electricity system had not been considered. A cold spell drove electricity
demand to record highs, while direct gas demand for heating
was also high. As only interruptible gas pipeline capacity
had been contracted for, some gas power plants could not be
dispatched as required, and a rolling blackout could only be
avoided by actively reducing demand.
In response to these concerns, regulators and governments
are increasingly encouraging coordination between both
markets. In the United States, gas and electricity coordination activities and interdependence assessment are ongoing in
various regions, including California, Texas, New England,
and the Midwest. Likewise, this topic has been picked up
both at national and continent-wide levels in Europe. Besides
improved coordination and information exchange between
system and network operators for gas and electricity, some
of these initiatives have also suggested changes of market
design and network access arrangements. For instance, in
France, the gas transmission system operator introduced a
set of specific operating restrictions for a growing fleet of
gas-fired plants but in combination with a new commercial
product that allows such plants to purchase additional diurnal
flexibility on a daily basis.
To a certain extent, the coordination challenges are
linked to different time constants in electricity and gas balancing (see Table 2). While an efficient integration of varRE
requires shorter gate-closure times and settlement intervals,
physical gas pipeline flows can be changed only with a significant delay. This creates a dilemma for gas/electricity
market coordination as well as natural barriers for aligning
market opening/closing times. Regulators and system operators thus have to make a choice between either 1) exposing
gas power plant operators to the risk of diurnal restrictions
and different time scales for the gas and electricity market
or 2) allocating the risk of variations in the final two or three
hours to gas network operators.

Flexibility Through Hybrid Energy
Conservation Systems
Integrated energy conversion systems can provide high levels of flexibility when they are able to switch between input
(energy resources) and output (production service) as well as
to store the input resource and/or some intermediate or final
form of the converted resource. Such a system is commonly
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Table of Contents for the Digital Edition of IEEE Power & Energy Magazine - January/February 2017