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To alleviate conventional power system challenges through DES and to enable widespread DES implementation, a comprehensive DES design approach is required that encom-passes engineering, economic, environmental as well as regulatory aspects. Driven by this need for a new DES design approach, this thesis aims to develop a flexible multi-objective decision-making framework for residential DES design, from an engineering and regulatory perspective, using mathematical programming techniques. A superstructure optimisation approach is adopted that is aligned with the three central energy system objectives (see Section 1.1.3). The developed method provides a framework for design engineers and decision-makers to assess policy relevant design aspects while incorporat-ing consumer preferences. The followincorporat-ing research questions are addressed in this thesis:

1. What is the current status of DES design optimisation? A review of mod-elling approaches is conducted to both identify DES design model charac-teristics as well as the research gap addressed in this thesis.

2. How can DES be techno-economically designed with cost as driving objec-tive? A superstructure mixed-integer linear (MILP) optimisation approach is developed for the design of an energy integrated residential DES while minimising total annualised energy cost (competition), building further on the work of Mehleri et al. [95, 96] (see Section 4.2.4). This approach fa-cilitates levelling the playing field for DES as competitive energy supply alternatives within conventional power systems.

3. How can DES be techno-economically designed whilst balancing multiple stakeholder interests? The developed MILP model is extended to a multi-objective framework, which enables trading off three multi-objectives in the design process. The three central energy system objectives of competition, security of supply and sustainability are translated into DES design objectives. This design framework ensures DES applicability within the conventional system and its relevance to governing energy policy.

4. How can DES regulatory and organisational aspects be integrated and as-sessed within design optimisation frameworks? The developed MILP op-timisation model is employed to analyse DES regulatory aspects through identifying quantifiable relations between design, organisation and regula-tion of DES, enabling regulatory decision-making.

1.5 Scope

The developed framework is first and foremost a design decision-making tool for res-idential DES and is not intended to provide practical implementation or operational strategies. DES design is analysed as a system of black-box components (technologies) with interactions on a superstructure scale with respect to several objectives. Mathemat-ical programming techniques are here employed as a tool to facilitate decision-making.

An energy integrated residential neighbourhood is under research, in terms of electricity, heating and cooling, with a particular focus on the electrical system. Design aspects that fall beyond the scope of research are detailed below.

1.5.1 Design detail

Practical implementation and operation of DES requires detailed analysis of both ther-modynamic [77–79] and electrical [70–73] behaviour as detailed in Section 1.2.2.2. This thesis does not consider the above detailed design aspects. Detailed aspects are either simplified and integrated into the developed superstructure optimisation model, or, be-yond the scope of analysis. A black-box approach is used for all considered technologies

and interactions. This implies that a certain power or energy input is transformed in an output through constant efficiency, conversion and loss parameters.

Additionally, the presented methodology does not provide a business model for the deployment and cost effectiveness of DES. Although a techno-economic modelling ap-proach is presented, detailed economic analysis, including payback times of investment, is beyond the scope of this work. Furthermore, other economic issues, such as game-theory, real-time agent based internal DES market operation, trading, unit commit-ment problems or DES participation in central electricity markets, are not considered (see [86, 97, 98]). Economic viability of DER aggregator schemes is also not addressed.

No environmental impact life cycle analysis of DES is conducted. Water usage, upstream sectors (e.g. the natural gas market) and carbon footprints related to the manufacturing of DER fall beyond the scope of research. Environmental aspects are, however, included in the form of, amongst others, carbon intensities and related emissions of central grid electricity and natural gas usage.

Implementation of DES requires a regulatory framework. Although aspects of regulatory frameworks for DES are analysed, detailed regulatory framework and tariff design, total benefit sharing between stakeholders and remuneration schemes are not addressed [39, 99]. Furthermore, social acceptance of DER is not explicitly considered. Neither are activities, such as demand side management, time of use tariffs, payback schemes and smart metering [97, 99, 100]. These activities are only mentioned where relevant.

The system boundaries are determined by the neighbourhood, which receives inputs from other sectors (gas, water and electricity) and exports outputs to the central power system. Gas and electricity supply are considered available but detailed analysis of their supply chain is beyond the scope of this work. The developed framework focusses on DES design, not operational optimisation. Operational interactions and technology dispatch are, however, optimised under given demand profiles.

1.5.2 Technologies

Considered technologies and energy interactions are selected based on a rational choice of potential, cost-effectiveness, suitability to DES design and their ability to generate

energy with low carbon emissions. As such, less developed technologies, such as tidal, geothermal, and carbon capture and storage, are not considered. Electricity storage is only researched where relevant but the potential of its widespread adoption is not researched. Furthermore, electrical vehicles and other means of transportation are not touched upon since moveable DER are not included in the initial design approach.

1.5.3 Definitions and terminology

Several terms are used throughout literature to describe DER systems [81, 82, 94, 101–

105]. Poly-generation units, for example, refer to small-scale energy generation units based on several (poly) energy resources. A ‘distributed energy system’ (DES) or ‘multi-energy system’ refers to a system that combines several DER and multiple ‘multi-energy services (electricity, heating and/or cooling) into one whole. A ‘microgrid’, in contrast, refers to a DES that predominantly provides electrical services. ‘Microgrid operation’, lastly, is used in this thesis as the local sharing of electricity between DES participants.

1.6 Outline

The remainder of the thesis is divided into six Chapters. Chapter 2 addresses the first research question in providing an overview of methods, tools and techniques for DES design optimisation. Several categories to classify previous methods are discussed and the research gap addressed is detailed.

Chapter 3 details the employed methodology and its conceptual framework. The re-quired inputs, considered technologies, design aspects and model outputs are described.

Additionally, an overview of the neighbourhood design and interaction alternatives is presented together with the system boundaries. The employed optimisation tool and technique are detailed with respect to three objectives (financial, technical and envi-ronmental), aligned with the central energy system objectives (competition, security of supply and sustainability), and regulatory framework aspects.

The second research question is addressed in Chapter 4. A framework for DES design of a small residential neighbourhood is developed as single-objective MILP model. Total

annualised energy cost of a neighbourhood as a whole is minimised while meeting its yearly electricity, space heating and space cooling demands.

Chapter 5 addresses the third research question in extending the developed model in Chapter 4 to a multi-objective framework. Total annualised cost is traded off with two other objectives; electrical system unavailability minimisation (technical/security of supply) and annual CO₂ emission minimisation (environmental/sustainability). This allows for a design that fits in with central energy system objectives.

The fourth research question is addressed in Chapter 6. Regulation relevant to residential DES is introduced. The developed framework in Chapter 4 is extended to include interactions between engineering and regulatory aspects, facilitating decision-making discussions and policy relevance of ‘optimal’ residential DES designs.

Chapter 7, finally, summarises the main contributions of the thesis and provides sugges-tions for future work.