The impact of limited electricity connection capacity on energy transitions in cities

Abstract

We study the impacts of the connection capacity for electricity transfer between a city and a regional energy system on the design and operation of both systems. The city energy system is represented by the aggregate energy demand of three cities in southern Sweden, and the regional energy system is represented by Swedish electricity price area SE3. We minimize the investment and running costs in the electricity and district heating sectors, considering different levels of connection capacity between the city and the regional energy systems; connection capacities equal to 100%, 75%, 50% and 0% of the maximum city electricity demand. We find that a system design with 50% connection capacity is only 3% more expensive in terms of total costs than a system with 100% connection capacity. However, shifting electricity generation capacity from the regional to the city energy system with 50%, as compared to 100%, connection capacity leads to a higher marginal cost for electricity in the city than in the region. With the highest connection capacities, 75% and 100%, the district heating sector in the city can support wind power integration in the regional energy system by means of power-to-heat operation. Modeling systems with different connection capacities makes our results applicable to other fast-growing cities with potential to increase local electricity production and sector coupling between the electricity, district heating and electrified transport sectors.