abstract: Electricity infrastructure vulnerabilities were assessed for future heat waves due to climate change. Critical processes and component relationships were identified and characterized with consideration for the terminal event of service outages, including cascading failures in transmission-level components that can result in blackouts. The most critical dependency identified was the increase in peak electricity demand with higher air temperatures. Historical and future air temperatures were characterized within and across Los Angeles County, California (LAC) and Maricopa County (Phoenix), Arizona. LAC was identified as more vulnerable to heat waves than Phoenix due to a wider distribution of historical temperatures. Two approaches were developed to estimate peak demand based on air temperatures, a top-down statistical model and bottom-up spatial building energy model. Both approaches yielded similar results, in that peak demand should increase sub-linearly at temperatures above 40°C (104 °F) due to saturation in the coincidence of air conditioning (AC) duty cycles. Spatial projections for peak demand were developed for LAC to 2060 considering potential changes in population, building type, building efficiency, AC penetration, appliance efficiency, and air temperatures due climate change. These projections were spatially allocated to delivery system components (generation, transmission lines, and substations) to consider their vulnerability in terms of thermal de-rated capacity and weather adjusted load factor (load divided by capacity). Peak hour electricity demand was projected to increase in residential and commercial sectors by 0.2–6.5 GW (2–51%) by 2060. All grid components, except those near Santa Monica Beach, were projected to experience 2–20% capacity loss due to air temperatures exceeding 40 °C (104 °F). Based on scenario projections, and substation load factors for Southern California Edison (SCE), SCE will require 848—6,724 MW (4-32%) of additional substation capacity or peak shaving in its LAC service territories by 2060 to meet additional demand associated with population growth projections. / Dissertation/Thesis / Doctoral Dissertation Civil, Environmental and Sustainable Engineering 2018

Flera svenska storstadsregioner har börjat nå taket för nätkapacitet i elnäten, ett problem som även kallas kapacitetsbrist. Problemet med kapacitetsbrist grundar sig i de förändringar som sker för elproduktionen, med exempelvis en ökande grad av förnyelsebar, intermittent elproduktion, och förändringar i efterfrågan i och med samhällets ökande grad av elektrifiering. För att hantera och överkomma kapacitetsbrist har elnätsbolag traditionellt sett byggt ut elnätet för att därmed har möjlighet att leverera effekt under årets alla dagar, en metod som har långa ledtider och har höga investeringskostnader. Den accelererade problematiken kring kapacitetsbrist sätter ett förändringstryck på elsystemet och i synnerhet elnätsbolagen att hantera problemet. Ett alternativ till att hantera kapacitetsbrist är för elnätsbolag att upphandla flexibilitetstjänster. Det är en lösning som anses som resurseffektiv och samhällsekonomisk i förhållande till konventionell nätutbyggnad. Flexibilitet i elsystemet innebär aktörers medvetna förändring i elproduktion eller efterfrågan av effekt som avser att stabilisera elsystemet. Genom en flexibilitetsmarknad kan elnätsbolag ge aktörer incitament att erbjuda sin flexibilitet mot betalning och därmed hantera kapacitetsbrist när det behövs.  I det här examensarbetet har syftet varit att studera flexibilitetsmarknaders roll i att överkomma kapacitetsbrist i lokala elnät och vad konceptet innebär för möjligheter och utmaningar på aktörsnivå och övergripande marknadsnivå. Genom kvalitativa forskningsmetoder, semi-strukturerade intervjuer, litteratur- och dokumentstudier, har författarna kartlagt kunskapsläget om flexibilitetsmarknader och konceptets innebörd för enskilda aktörer. Examensarbetet presenterar även ett teoretiskt ramverk av ekonomisk teori som syftar till att ge större förståelse för marknadens etableringsprocess och vilka eventuella marknadsmisslyckanden som riskerar att ske. En förstudie har genomförts där två aktiva projekt, CoordiNet och Sthlmflex, av flexibilitetsmarknader i Sverige har studerats för att identifiera insikter om flexibilitetsmarknaders möjligheter och utmaningar. Vidare utfördes en semi-strukturerad intervjustudie med 15 olika företag i Göteborg, en region som ännu inte har en flexibilitetsmarknad, för att studera olika aktörers drivkrafter och hinder för att medverka på en flexibilitetsmarknad. Företagen var kategoriserade i fem olika segment; industrier, hamnindustrier, fastighetsbolag, elnätsbolag och aggregatorer. Resultatet från förstudien visar på att de existerande flexibilitetmarknaderna har varit viktiga för deltagande aktörer att lära sig förstå hur de bör arbeta med en flexibilitetsmarknad som en del av verksamheten. Det har visat sig existera ett antal utmaningar i projekten som exempelvis bristfällig kommunikation, avsaknad av automatiserade processer och låg likviditet på marknaderna. I intervjustudien kunde det urskiljas att de flesta industrier, hamnindustrier och fastighetsbolag har flexibilitetsresurser och potential för att medverka som leverantörer på en flexibilitetsmarknad. Hos samma segment identifierades dock hinder gällande bristen på teknisk utrustning för att kunna erbjuda flexibilitet och en osäkerhet kring ersättningsnivån som kan väntas från flexibilitetmarknaden för flexibilitetsleverantörer. Elnätsbolag ser flexibilitetsmarknader som ett bra alternativ till att hantera kapacitetsbrist och att potentialen är stor för framtiden. Aggregatorer tros ha en betydande roll på flexibilitetsmarknader och vara en möjliggörare för aktörer med mindre resurser och begränsad kunskap. Totalt var 12 av 15 tillfrågade företagen intresserade av att delta på en flexibilitets-marknad i Göteborg. Utifrån teori kan flexibilitetsmarknader ses som en innovativ marknad och att etableringsprocessen innebär olika marknadsstabiliserande aktioner. Flexibilitetsmarknader innebär även ett behov av innovativa affärsmodeller för marknadsaktörerna. Med hänsyn till hinder och utmaningar som identifierats hos flexibilitetsmarknaderna under examensarbetet existerar risker för eventuella marknadsmisslyckanden, orsakade av asymmetrisk information, transaktionskostnader, begränsad rationalitet och externaliteter. / Several Swedish metropolitan regions have begun facing issues regarding the capacity in the power grid, a problem that is also known as capacity shortage. The problem of capacity shortage is based on several changes within the power system, for example, an increasing degree of renewable, intermittent electricity production, and society's increasing degree of electrification. In order to manage capacity shortages, power grid companies have traditionally expanded the power grid to be able to deliver power during all hours of the year, a method that has long lead times and high investment costs. The accelerated problem of capacity shortages puts pressure for change in the power system, and in particular the power grid companies to deal with the problem. An alternative in managing capacity shortages is for power grid companies to purchase flexibility services. It is a solution that is referred to as a more sustainable, resource efficient and socio-economic in relation to conventional power grid expansion. Flexibility in the power system can be seen as changes in the electricity production or the demand for power that intends to stabilize the power system. In a flexibility market, power grid companies can give companies incentives to offer their flexibility against payment and thus handle capacity shortages when needed. The purpose of the thesis has been to study the role of flexibility markets in overcoming capacity shortages in local power grids, and the concept’s opportunities and challenges for different actors and from a market perspective. Through qualitative research methods, semi-structured interviews, literature- and document studies, the authors have mapped the state of knowledge about flexibility markets and the concept's meaning for the power system. The thesis also presents a theoretical framework of economic theory that aims to provide a greater understanding of the market's establishment process and what possible market failures that are likely to occur. A pre-study has been carried out where two projects, CoordiNet and Sthlmflex, of flexibility markets in Sweden have been studied to identify insights into the concept’s opportunities and challenges. Furthermore, a semi-structured interview study was conducted with 15 different companies in Gothenburg, a region that does not yet have a flexibility market, to study companies’ drivers and obstacles to participate in a flexibility market. The companies were categorized into five different segments: industries, port industries, real estate companies, power grid companies and aggregators. The results from the pre-study show that the existing flexibility markets have been important for participating players to understand how they should integrate a flexibility market as a part of their businesses. It has been shown that there are several challenges in the flexibility projects, such as inadequate communication, lack of automated processes and low liquidity on the markets. In the interview study, it could be discerned that most industries, port industries and real estate companies have flexibility resources and potential to participate as flexibility providers in a flexibility market. In the same segments, obstacles were identified regarding the lack of technical equipment to be able to offer flexibility and an uncertainty about the level of remuneration that can be expected from the flexibility market for flexibility providers. Power grid companies sees flexibility markets as a good alternative for managing capacity shortages and that the potential is great for the future. Aggregators are believed to play a significant role in flexibility markets and be an enabler for companies with smaller flexibility resources and limited knowledge. In total, 12 of the 15 companies surveyed were interested in participating in a flexibility market in Gothenburg. Based on theory, a flexibility market can be seen as an innovative market and that the establishment process involves various market stabilizing actions. Flexibility markets also imply a need for innovative business models for market participants. Regarding the obstacles and challenges identified in the flexibility markets during the thesis, there are risks of market failure caused by asymmetric information, high transaction costs, bounded rationality, and externalities.