Simon Sawatzki: Scenario Analysis of the German Electricity Generation Sector with Balmorel, Master's thesis. DTU, Technical University of Denmark, 2015.

This work applies the electricity and district heating market model Balmorel on the German energy system. With regards to the current developments of the German power and heat markets, the role of CHP generation and options for their increased flexibility was chosen as subject matter for a scenario analysis. The motivation and objectives as well as the underlying structure of this work are explained in the following.

The German energy system is currently undergoing a fundamental transformation, promoted by political incentives in the context of the Energiewende (= energy transition). The key drivers for this transformation are the targeted reduction of CO2 emissions on the one hand as well as the decided exit from nuclear power on the other hand. The incentivised measures include an increased usage of renewable energy sources as well as increased efficiency of consumption.

As a result, the amount of renewable electricity generation has increased drastically in recent years, posing a new situation for electricity market participants. The current key concerns include transmission grid constraints, provision of available backup capacity, cost of energy as well as integration within the European integrated power market. A key aspect that is relevant for all previous issues is the temporal variability of the two dominant sources for renewable electricity generation, wind and solar energy.

While a political discussion on how to handle this variability from a market perspective is ongoing, various technical solutions for providing flexibility to the power system are assessed. These include the option of increasing the flexibility of CHP generators by means of heat storage and electrical boilers. The relevance of this topic is emphasised by an imminent amendment of the CHP subsidy scheme, which is currently in the preparation phase.

This motivates the following research questions:

1. How does a development – "business-as-usual" – until 2020, with an increased share of VRE generation and an assumed reduction in heat demand due to efficiency improvements on the consumer side, affect the utilisation and profitability of CHP generators in an exemplary German district heating system?

2. What are the effects of investments in flexibility measures (HO-boilers, heat storage, electric boilers and heat pumps) on the operation and economy the assessed district heating system?

3. What is the impact of investments in the previously named flexibility measures on the overall power system?

At the same time the availability of data on CHP units and district heating systems in Germany is limited. This provides a challenge for a thorough evaluation of the research questions. This complements the analytical target of this work by the goal to compile, implement and verify a detailed dataset of the German electricity and CHP system based on open sources.