The Effect and Value of End-Use Flexibility in the Low-Carbon Transition of the Energy System

Flexibility at end-use level can lower both the costs of end-use sectors, such as the building sector and the investment and operational costs of the electricity sector. For planning purposes, it is however a need to understand how end-use flexibility influences the design of the future energy system. This paper analyses the role and value of end-use flexibility in the Norwegian low carbon energy system transition towards 2050. This is done by using a stochastic energy system model, IFE-TIMES-Norway, to quantify how end-use flexibility impacts the energy system design and the corresponding sectoral profits and costs. The results demonstrate that facilitating a technoeconomic implementation of end-use flexibility lowers the cost of the energy transition towards 2050 between BEUR 4.4 and BEUR 8.3. This is primarily because end-use flexibility ensures a better match between local PV production and demand, lowers the capacity expansion needs of the electricity grid and increases profits from international electricity trade. Further, the results show that end-use flexibility reduces the need for hydrogen and thermal storage, where hydrogen storage capacity is lowered by 25 %-66 % in 2050, depending on storyline.