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Introducing stochasticity into the energy system model Times-CZ - a reflection of a war-related extreme environment
Thesis title in Czech: Zavedení stochasticity do modelu energetického systému Times-CZ - odraz extrémního prostředí souvisejícího s válkou
Thesis title in English: Introducing stochasticity into the energy system model Times-CZ - a reflection of a war-related extreme environment
Key words: stochasticita, energetický systém, model TIMES
English key words: stochasticity, energy system, TIMES model
Academic year of topic announcement: 2021/2022
Thesis type: Bachelor's thesis
Thesis language: angličtina
Department: Institute of Economic Studies (23-IES)
Supervisor: Mgr. Lukáš Rečka, Ph.D.
Author: hidden - assigned by the advisor
Date of registration: 01.09.2022
Date of assignment: 04.09.2022
Date and time of defence: 11.09.2023 09:00
Venue of defence: Opletalova, O314, místnost. č. 314
Date of electronic submission:01.08.2023
Date of proceeded defence: 11.09.2023
Opponents: prof. Ing. Karel Janda, Dr., Ph.D., M.A.
 
 
 
References
Abeydeera, L. H. U. W., Mesthrige, J. W., & Samarasinghalage, T. I. (2019, July 1). Global research on carbon emissions: A scientometric review. Sustainability (Switzerland). MDPI. https://doi.org/10.3390/su11143972
GlobalData (2022, March). Czech Republic Renewable Energy Policy Handbook, https://www.globaldata.com/store/report/czech-republic-renewable-energy-government-regulation-policy-analysis/
Goldstein, G., Kanudia, A., Lehtila, A., Remme, U., & Wright, E. (2021). Documentation for the TIMES Model Part III. IEA Energy Technology Systems Analysis Programme (p. 61). Retrieved from http://iea-etsap.org/index.php/documentation

International Energy Agency. (2021). Key World Energy Statistics 2021 - Statistics Report. IEA Publications (pp. 1–81).

Korkmaz, P., Schmid, D., & Fahl, U. (2021). Incorporating uncertainties towards a sustainable European energy system: A stochastic approach for decarbonization paths focusing on the transport sector. Energy Strategy Reviews, 38. https://doi.org/10.1016/j.esr.2021.100707

Köhl, M., Linser, S., Prins, K., & Talarczyk, A. (2021, November 1). The EU climate package “Fit for 55” - a double-edged sword for Europeans and their forests and timber industry. Forest Policy and Economics. Elsevier B.V. https://doi.org/10.1016/j.forpol.2021.102596

Loulou, R., Goldstein, G., Kanudia, A., Lettila, A., & Remme, U. (2021). Documentation for the TIMES Model - Part 1. IEA Energy Technology Systems Analysis Programme, (April), 1–78.


Loulou, R., & Lehtila, A. (2016, May). Stochastic programming and tradeoff analysis in times - IEA-ETSAP. Retrieved September 2022, from https://iea-etsap.org/docs/TIMES-Stochastic-Final2016.pdf [Original source: https://studycrumb.com/alphabetizer]

Loulou, R., Lehtilä, A., Kanudia, A., Remme, U., & Goldstein, G. (2016). Documentation for the TIMES Model PART II: Reference Manual. Energy Technology Systems Analysis Programme, (July), 1–78. Retrieved from http://www.iea-etsap.org/web/Documentation.asp

Rečka, L., & Ščasný, M. (2017). Impacts of reclassified brown coal reserves on the energy system and deep decarbonisation target in the Czech Republic. Energies, 10(12). https://doi.org/10.3390/en10121947

Rečka, L., & Ščasný, M. (2018). Brown coal and nuclear energy deployment: Effects on fuel-mix, carbon targets, and external costs in the Czech Republic up to 2050. Fuel, 216, 494–502. https://doi.org/10.1016/j.fuel.2017.12.034 [Original source: https://studycrumb.com/alphabetizer]
Preliminary scope of work in English
Research question and motivation
Tackling climate change relies heavily on energy modelling. The capacity to calculate greenhouse gas emissions allows us to express the environmental impact explicitly. The models enable us to prepare for the future and determine the best energy mix. This will aid us in determining whether the Czech Republic will be able to meet the European Energy Roadmap 2050 (Rečka and Ščasný, 2016) with more precision. As a result, energy modelling is critical. Modelling is particularly crucial these days, given the recent shock to the energy markets caused by the Russian-Ukraine conflict. Prices are beginning to vary even more now that the EU has agreed to a restriction on Russian oil arriving by sea. Furthermore, as the debate over banning Russian gas continues, analysts to a great extent cannot rely on existing models. As a result, there is a need for improvement and adaptation to the current circumstances.

The TIMES model strives to provide energy services at the lowest possible global cost. It determines equilibrium and seeks to maximise marketplace surplus. The TIMES model's scope extends beyond energy-related issues to include environmental concerns (Rečka and Ščasný, 2017 & 2018).

Current energy challenges notify for even more precise and accurate energetic mix design models. The Russian-Ukrainian conflict that is currently affecting energy markets was indeed artificially driving up gas and electricity prices. Nuclear and hydropower plants can't operate to their full potential because of droughts and too warm water in rivers. Due to Rhyne's water shortage, Germany is unable to meet the demand for transporting coal to coal-fired power plants. All these issues combined with others create an unprecedented situation that affects both the current and future transformation of the energy market. When a model is unable to adapt to this new environment, it is unable to make precise predictions. Therefore, redesigning some features and options is necessary (International Energy Agency, 2021).
The EU's decision on energy has a substantial impact on the energy markets contemporaneously. The most current acceptance of ICE car sales is ceasing in 2035. It was decided to include nuclear and gas as green energy sources at least initially in 2022. The EU accepted the Fit for 55, which mandates that all EU members reduce their emissions by 50% by 2030 (Köhl, Linser, Prins, & Talarczyk, 2021). Decisions and approved plans significantly impacted the Czech Republic's future demographic makeup. As a result, they must also be considered when this model is adjusted.


Contribution

In order to transform the TIMES-CZ model, this thesis will emphasize on stochastic programming, which explains the best way to proceed to minimise any negative effects that uncertain future developments might have. Finding a strategy that optimises the expectation of a certain function of the decisions and random variables while being practicable for practically all conceivable data instances is the objective here. This strategy was chosen to introduce new energy market characteristics while taking the Russian-Ukrainian War into consideration. Electricity and natural gas prices have officially peaked, but the present paradigm wasn't designed for this kind of economic behaviour or magnitude of unrest. Because of the above, including these additional characteristics in the TIMES-CZ model may improve his accuracy and provide consumers with reliable information on prospective changes.

As current Russian policy tempted to reduce natural gas export to EU, the prices rise to extreme size moreover the scenario that Russian gas exporters will close rooster fully. Thus, the EU might be forced to remove all gas production from other alternatives (OTE, 2022). Additionally, TIMES- CZ model, was produced in times when emission permits will relatively cheaper than today, then the model wasn’t designed to accept their high prices of them. Therefore, an increase offer of higher prices and relevant processing is necessary. Due to war and the various challenges already described, along with the higher level of uncertainty that a new model with stochastic programming can display, energy markets today experience these issues.


Methodology

The thesis will use stochastic programming, a technique for making the best choices under risk, to modify the TIMES-CZ model. Uncertainty regarding the values of some of the parameters as the cost coefficient constitutes the risk. At the resolution time, or the moment the parameter's true value is revealed, uncertainty on a given parameter is said to have been resolved, either completely or partially (Loulou, Lehtila, 2016). When the parameters are known only within certain bounds, one approach to tackling such problems is called robust optimization. Stochastic programming may be included in energy system models to generate potential recourse strategies for a constrained, limited number of uncertainties taken into consideration. The impacts may be assessed using these techniques by minimising processing time because we only explore a small number of uncertainty. As a result of sensitivity analysis, stochastic programming also enables us to measure, evaluate, and compare the associated costs of the uncertainties with the deterministic results (Korkmaz,, Schmid, & Fahl, 2021).

It will precisely adapt a design model, but the current, unprecedented conditions render it insufficient in certain aspects. Those certain input data will be changed in accordance with the authorities in charge of various elements. Openly utilisable sources from the Czech electricity and gas market operator (OTE). will be used to adjust the prices of electricity and natural gas Using Europe's emission allowances (EUA) would then result in accurate data for emission permits. Changes to the potential gas usage conclusions will be made in accordance with the Czech Ministry of Industry (GlobalData, 2022). Because the energy markets are changing so rapidly, many of the conclusions in this thesis could be changed or revised while it is written.
 
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