Economic value of flexibility provided by power to gas conversion systems in low-voltage distribution grids

Congestion is widely considered a key challenge in low-voltage (LV) distribution grids due to the high penetration of rooftop photovoltaic (PV) generation. To deal with this problem, LV grids can be upgraded, however, this is a costly solution. Therefore, new approaches are needed to improve the LV grid’s flexibility. This paper investigates how power-to-gas (P2G) conversion systems can contribute to enhancing the grid’s ability to deal with high levels of solar PV production. To obtain this aim, firstly, dynamic congestion prices as network congestion signals are computed. Then, these prices are utilized as incentives for market participants to invest in P2G systems. In this paper, a mathematical model is proposed to determine the optimal sizing and siting for the installation of P2G conversion systems in LV grids in a way that not only leads to the maximal profit for owners of P2G but also enriches the grid’s flexibility. 

The proposed mathematical model has been formulated using bi-level programming. At the upper level, the owner of P2G systems determines optimal settings of them based on the received incentives from the grid. In addition, the network operator calculates congestion prices at different grid’s nodes according to given operation conditions at the lower level. Finally, this model is applied to the typical LV grid within the Dutch power system. The results indicate that market participants are willing to invest in P2G systems after receiving dynamic congestion prices. Furthermore, P2G can reduce the congestion problem in low-voltage grids in case of high penetration of rooftop PV power.