Stochastic approaches to sustainable energy in Iran: Enhancing power system flexibility and renewable integration

Abstract

In the quest for a sustainable future, transitioning to a low-carbon power sector is essential. This transition is increasingly reliant on intermittent renewable energy sources, introducing significant uncertainty into power sector expansion planning. Understanding and managing this uncertainty is crucial for making informed decisions about future generation and capacity mix, as well as for estimating the associated costs. Addressing a gap in the current literature, we introduce an innovative multi-stage stochastic optimization model that uniquely optimizes investments in both generation and energy storage devices. Our model considers the integration of power system flexibility requirements with a nuanced understanding of national-level energy demand and supply uncertainties. The introduced model is employed to explore the effects of two distinct renewable penetrations on the power sector. Additionally, the impact of carbon emission policies is investigated, providing insights into the complex interplay between these factors. We apply the advanced stochastic dual dynamic programming technique, enabling us to handle the complexities of large-scale multi-stage stochastic expansion planning. The methodology and models proposed in this paper are applied to the generation and storage expansion planning of Iran power system, providing practical insights and demonstrating the viability of these strategies in a real-world context. The study indicates that the effectiveness of carbon policies is closely coupled with the level of renewable resource integration. Also, we identify a low-carbon pathway, involving the strategic retrofitting of existing natural gas combined cycle units and the gradual phasing down of gasoline-fired steam units. Furthermore, our study suggests that, for natural-gas dominated power system’s economic transition to low-carbon emissions, equipping all new natural gas combined cycle units with carbon capture, utilization, and storage technology is viable despite efficiency decrease and higher investment costs, an insight not previously established.