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As the aim of this study is to investigate the impact of different options for market electrification on the all-island electricity market, and as the Plexos model is not developed to work at individual household scale, the methodology represents the effect of domestic heat electrification on the wholesale market in accordance with the scenarios described. 4.1 Electricity market model overview The market model is designed to reflect real market structure and operation, therefore it consists of two regions (the SEM and the GB regions) linked together with two interconnectors with 1 GW of total capacity. The SEM region is modelled in detail. Thermal generators are presented at unit resolution and the model includes detailed techno-economic characteristics and constraints, such as: heat rate functions, start-up profiles, ramp rates, minimum up and down times, forced and maintenance outage profiles. Technical characteristics, combined with economic assumptions (fuel and carbon prices, variable operating and maintenance [VO&M] costs) replicate the complex bids submitted by SEM generators on a daily basis. The GB market has a simplified structure but is included to simulate power flows from/to the SEM. It is assumed that there are no direct links from the SEM to continental Europe, as the current Project of Common Interest funded by the EU is devoted to studies regarding capacity and route (EirGrid, 2017). Unit commitment and spot price settlement are optimised based on the unconstrained mandatory SEM gross pool market structure. They are defined by chronological market optimisation using a mixed integer algorithm, and total system costs minimisation as the objective function. The generation portfolio of the SEM is represented by taking into account the current generation fleet, as well as potential changes in future generation proposed by the system operators (EirGrid, SONI, 2015). As current projections only include changes in the generation portfolio up to 2024, further changes are based on the average technical life of thermal generators and the assumed progress in decarbonisation. The latter considers the adoption of stricter environmental targets, higher levels of renewable generation deployment, decommissioning of older and carbon intensive generators (i.e. coal, oil) and the deployment of environmentally friendly technologies (i.e. CCS, etc.). Figure 4.1 shows the SEM generation installed capacities by fuel type. More details about the market model and its generation portfolio are given in (Vorushylo I., 2016). As with the SEM generation portfolio, the GB market assumes further progress in renewable deployment and system decarbonisation. The market development scenario 7PDF Image | How heat pumps and thermal energy storage with wind power
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