Extended Social Welfare Decomposition for Multi-Energy Systems

The energy system will go through a significant transition over the next decades to reach EU’s goal of zero emissions in 2050. To substitute fossil energy carriers, renewable energy sources will be mainly integrated in the power system. Thereby, sector coupling will play a major role. On the one hand, by making flexibility from other sectors such as heat or transport accessible to the electrical system and on the other hand, to decarbonize all sectors. Hence, planning future energy systems requires a holistic system view across all sectors. This imposes the need for multi-energy system (MES) models with investment models and new indicators to assess cross-sectoral investments. We therefore propose an extension of the common social welfare assessment by cross-sector rents to account for the welfare distribution not only across producers, consumers and congestions but also across different coupled sectors. This is especially of relevance for the assessment of new projects in integrated energy-systems given the significant infrastructure investments in the upcoming decades. In the course of this we show how sector coupling affects prices in all sectors and why this underlines the need for combined modeling instead of decoupled approaches.