Techno – economic evaluation of market- based congestion management mechanisms: a case study

Abstract

This thesis examines the techno-economic evaluation of market-based congestion management mechanisms in the Goor Business Park. With grid congestion emerging as a major challenge due to increasing electricity demand and the limited capacity of existing infrastructure, this research investigates alternatives to grid expansion. The primary focus is identifying an optimal market-based congestion management mechanism to alleviate grid congestion in a business park environment, which is critical to advancing the energy transition. Using the Python for Power System Analysis (PyPSA) software, three congestion management scenarios were modeled: a scenario with storage units for each company, a scenario with a group transport agreement, and a scenario with a capacity market. The performance of each scenario was evaluated based on several critical indicators, including grid dispatch, storage and photovoltaic (PV) capacity, solar curtailment, load shifting, load shedding, and associated financial costs. The comparative analysis revealed that Scenario 3, which introduced a capacity market and limited storage units, emerged as the optimal solution. This scenario balanced operational efficiency and congestion reduction and minimized the need for costly infrastructure upgrades by dynamically allocating grid resources and integrating targeted storage and load-shifting mechanisms. In contrast, Scenario 1, while minimizing annual costs, required high initial investments due to the extensive use of storage units. Scenario 2, which relied on load shedding and shifting, had the highest operating costs due to frequent load shedding, making it the least feasible. The results suggest that market-based mechanisms, particularly capacity markets, offer a sustainable and cost- effective approach to managing grid congestion, especially in business parks where electrification is increasing. The study highlights the potential for these mechanisms to serve as an alternative to grid expansion, in line with EU directives to increase grid flexibility. This research contributes valuable insights into the practical application of market-based congestion management and provides a framework for its implementation in similar settings.