Bidirectional linkage between a long-term energy system and a short-term power market model

This paper proposes a novel bidirectional linkage between a long-term energy system model and an operational power market model. This combined modelling framework provides long-term energy system investment strategies that explicitly consider the operational complexity of the power sector. The linkage is demonstrated using an energy system model of Norway and a European power market model with a specific high detail level of hydropower operation. For Norway, with its hydropower-dominated electricity sector, the linkage is designed to improve the modelling of hydropower generation and external electricity markets in the energy system model, and to provide consistent assumptions concerning Norwegian electricity demand and capacity in the power market model. The difference in income of hydropower producers, which is endogenous in both models, is used as a convergence criterion. The linkage is tested for various future developments of the European power market and is successful for three of the four analysed instances. However, when the linkage is evaluated in a system with a very high share of intermittent electricity generation and large variations in electricity price, it fails to converge on hydropower income. This is because the simulated Norwegian electricity prices differ significantly between the two models in this situation. (C) 2020 The Authors. Published by Elsevier Ltd.