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Designing Power Systems and Managing Markets to Achieve the Low-Carbon Transition


Using national economic and energy statistics as inputs, ESST provides an easy-to-use interface to enable experts to perform a first-order assessment of their national energy system’s possible future energy development paths. (Photo: O. Yusuf/IAEA)

To meet the challenge of climate change, countries are ramping up plans to accelerate the expansion of low-carbon technologies and to decarbonize their power systems. But the sun doesn’t always shine, nor are winds always sufficiently gusty. To ensure the continued, reliable operation of renewable power sources, there is a need for flexibility in both energy markets and power systems. From 12 to 16 July, more than 44 decision-makers and experts from Europe and Central Asia joined a virtual IAEA meeting to better understand the short to medium term impacts of low-carbon strategies on national and regional energy markets.

The Paris Agreement aims to limit global warming well below 2 degrees Celsius, and preferably to 1.5 degrees Celsius, compared to pre-industrial levels. To meet these ambitious targets, the IAEA assists countries charting out their energy strategies by providing methodologies, energy modelling tools and associated training. As part of this energy planning support, the IAEA hosted the five-day meeting to explore the operational challenges future power systems and grids could face as energy systems are decarbonized, and how adjustments in regional market designs and instruments may support investments in low-carbon technologies, such as nuclear power.

“In the last two decades, renewable energy technologies have seen a sharp increase in investments,” said Christoph Henrich, IAEA Programme Management Officer. “But uncertainty and variability pose challenges for the transition towards greener power systems. Nuclear power could be one of the solutions to those challenges.”

Whereas recent IAEA meetings focused on long-term strategies around energy demand and supply pathways, this July 2021 meeting explored how power systems are operated and how markets function today. “We considered what needs to be done to ensure we are on track to translate long-term strategies into action on the ground,” Manuel Welsch, IAEA Energy Planner and Economist.

The meeting’s participants—which included counterparts from 17 IAEA Member States—were introduced to a series of online resources and tools designed to help policy-makers evaluate future energy demand or assess and simulate the flexibility of power systems. (Photo: O. Yusuf/IAEA)

Linking communities of practice

Participants came from transmission system operators (TSOs), market operators, energy regulators and energy research institutions. They exchanged views and demonstrated tools to assess power systems and markets.  Guest speakers joined from the Energy Community Secretariat, the International Renewable Energy Agency (IRENA) and the European Network of Transmission System Operators for Electricity (ENTSO-E).  

“TSOs, national regulatory authorities and national market operators are three pillars on which the integration of renewable sources and decarbonisation lies,” said Mikheil Tavberidze, Deputy General Director of Georgia’s Electricity System Commercial Operator. “In other words, we need systems development and stability, proper financial support and tariffs, and competitive markets with the right signals to reach the goal. These elements should compensate and balance each other to keep the low-carbon transformation plan stable.”

Different tools for different assessments

The IAEA’s Energy Scenarios Simulation Tool (ESST) was one of the assessment models presented during the meeting along with the software Plexos and the open-source application Antares, developed by the French TSO Electricity Transmission Network (RTE). In a joint IAEA-IRENA side event, open to a wider audience from Europe and Central Asia, the functionalities of IRENA’s FlexTool were demonstrated, allowing participants to explore features and determine if they could complement existing national assessments.

“There is no single model that can assess all issues that are encountered in energy planning,” explained Stamatios Chondrogiannis from the European Commission’s Joint Research Centre (JRC). “An effective approach is to use different types of complementary tools. You analyse long term scenarios with a long term energy model, you simulate the power system with a unit commitment and economic dispatch model, then you analyse the future grid and perform grid security analyses.”

In Cyprus, this comprehensive approach was successfully applied to develop and analyse the country’s long term electricity supply model. This model, in turn, was used to support a dedicated grid study which soft-linked to various tools and models, and which was conducted with the help of the JRC.

“Our model is kept up-to-date to consider changing assumptions, policies and technologies in order to provide support for policy decisions and the country’s National Energy and Climate Plans (NECPs),” said George Partasides, an Energy Officer at the Cyprus Ministry of Energy, Commerce and Industry.

The meeting was organised as part of an ongoing, IAEA technical cooperation (TC) project[1]  to support the development of energy strategies for climate change mitigation. Activities under the project provide opportunities to discuss energy and climate strategies, supporting assessments of the techno-economic feasibility of energy mixes, including nuclear power.

From 15 to 19 November, the IAEA and the International Centre for Theoretical Physics will host the College on the Evaluation of Cost Effective Energy Options as Nationally Determined Contributions for Climate Change Mitigation. Applications are expected to open in early fall. More information on the virtual college will be posted closer to the event.

[1] RER2017, ‘Assessing the Role of Low Carbon Energy Technologies for Climate Change Mitigation’

Last update: 29 Jul 2021

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