This report describes the study carried out to develop and validate on test networks a Multi-Criteria Cost Benefit Analysis (MCA-CBA), which can evaluate the use of flexibility for the development of the distribution system.
The framework of the activity – which is part of Working Group 3 “Cost Benefit Analysis and toolkits” of IEA ISGAN TCP – is a line of research aimed at proposing a generally valid methodology for the design evaluation of development alternatives in the field of smart grids, which can consider non-monetary impacts and externalities.
During previous activities, an MCA-CBA web tool, called “smartgrideval”, was developed and progressively improved, up to launching the most recent extension towards the evaluation of flexibility services, also taking into account the interaction of different vectors (“sector coupling”). To make the tool more effective, improving the choice between alternatives and risk mitigation, one of the most critical aspects for the creation of the flexibility services market has been addressed, i.e., uncertainty. From the analysis of the decision-making techniques that can take into account uncertainty in the context of CBA and MCA, scenario analysis, i.e., the analysis of different scenarios characterized by simultaneous variations of one or more parameters, has emerged as the methodology that achieves the best compromise between effectiveness and ease of use.
During this year we focused on the validation of the CBA-MCA methodology based on this approach and on the identification of any changes to be included in the proposed model. For this purpose, a comparison of the results obtained using the identified CBA-MCA methodology with those of the main tools used for the assessment of strategic investments was first conducted. In the second phase, case studies were carried out by applying the methodology to test networks with different structural characteristics and belonging to different areas, which may require (or offer) different types of flexibility services. It was thus possible to compare the different development scenarios and identify the most advantageous choice, considering monetary (NPV associated with the different investments), technological (losses associated with the technical choice) and environmental (CO2 emissions) aspects. After this positive validation, it is planned to implement the methodology in the smartgrideval tool, also integrating sector coupling and other improvement changes.