Analysis of design options for the electricity market: The German case

Keles, Dogan; Bublitz, Andreas; Zimmermann, Florian; Genoese, Massimo; Fïchtner, Wolf

doi:10.1016/j.apenergy.2016.08.189

Cited by 74 publications

(44 citation statements)

References 16 publications

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“…Even classic mechanism design has recently been discussed for energy storage. For example, Keles et al (2016) study energy and incentives to invest in renewables. Zou et al (2015) examine a mechanism design in the energy market.…”

Section: Introductionmentioning

confidence: 99%

A system operator’s utility function for the frequency response market

et al. 2018

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How can the electricity system operator determine the optimal quantity and quality of electricity ancillary services (such as frequency response) to procure in a market increasingly characterized by intermittent renewable electricity generation? The paper presents a system operator's utility function to calculate the exchange rates in monetary values between different frequency response products in the electricity system. We then use the utility function in a two-sided Vickrey-Clarke-Groves (VCG) mechanism combined of two frequency response products -enhanced and primary -in the context of the system in Great Britain. This mechanism would allow the market to reveal to the system operator the welfare optimal mix of speed of frequency response and quantity to procure. We show that this mechanism is the efficient way to support new faster sources of frequency response, such as could be provided by grid scale batteries. AbstractHow can the electricity system operator determine the optimal quantity and quality of electricity ancillary services (such as frequency response) to procure in a market increasingly characterized by intermittent renewable electricity generation? The paper presents a system operator's utility function to calculate the exchange rates in monetary values between different frequency response products in the electricity system. We then use the utility function in a two-sided Vickrey-Clarke-Groves (VCG) mechanism combined of two frequency response products -enhanced and primary -in the context of the system in Great Britain. This mechanism would allow the market to reveal to the system operator the welfare optimal mix of speed of frequency response and quantity to procure. We show that this mechanism is the efficient way to support new faster sources of frequency response, such as could be provided by grid scale batteries. ABSTRACTHow can the electricity system operator determine the optimal quantity and quality of electricity ancillary services (such as frequency response) to procure in a market increasingly characterized by intermittent renewable electricity generation? The paper presents a system operator's utility function to calculate the exchange rates in monetary values between different frequency response products in the electricity system. We then use the utility function in a two-sided Vickrey-Clarke-Groves (VCG) mechanism combined of two frequency response products -enhanced and primary -in the context of the system in Great Britain. This mechanism would allow the market to reveal to the system operator the welfare optimal mix of speed of frequency response and quantity to procure. We show that this mechanism is the efficient way to support new faster sources of frequency response, such as could be provided by grid scale batteries.

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Section: Introductionmentioning

confidence: 99%

A system operator’s utility function for the frequency response market

et al. 2018

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“…Keles et al. provide a more detailed description of the models of the mechanisms for capacity remuneration …”

Section: Modeling Future Energy Systems and Marketsmentioning

confidence: 99%

Meeting the Modeling Needs of Future Energy Systems

et al. 2017

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Structural changes in the energy sector have created considerable challenges for regulators, energy consumers, and suppliers. Energy researchers rely on quantitative modeling approaches to address these challenges. At the Karlsruhe Institute of Technology, we have developed several models to analyze today's and the future's energy markets to address the challenges for electricity networks as a result of intermittent renewable and decentralized power and heat supply and to find solutions for integrating demand response. This paper presents a survey of these approaches and discusses further challenges. The developed models have proved to be suitable for answering a range of research questions related to structural changes. As the energy sector remains in a constant state of flux, these models need to be further developed. This means coupling different energy sectors and markets and improving their technical accuracy as well as their spatial and temporal resolutions.

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“…As renewable energy generation has characteristics of variability and uncertainty, Ela et al [5] and Milligan et al [6] suggest that pay-for-performance wholesale market design may promote independent system operator (ISO) to procure renewable electricity. Concerning current Germany energy-only market design (EOM), Keles et al [7] and Bublitz et al [8] hold that an EOM extended with a strategic reserve can enhance supply security in a market with high share of renewable electricity. To achieve CO 2 abatement goal stipulated in the Paris agreement, there is an urgent need for market design to increase the compatibility among electricity market and carbon market [9].…”

Section: Introductionmentioning

confidence: 99%

An Optimal CO<sub>2</sub> Saving Dispatch Model for Wholesale Electricity Market Concerning Emissions Trade

Fu¹

2019

AJEE

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Deep CO 2 mitigation provides a challenge to fossil fuel-fired power industry in liberalized electricity market process. To motivate generator to carry out mitigation action, this article proposed a novel dispatch model for wholesale electricity market under consideration of CO 2 emission trade. It couples carbon market with electricity market and utilizes a price-quantity uncorrelated auction way to operate both CO 2 allowances and power energy trade. Specifically, this CO 2 saving dispatch model works as a dynamic process of, (i) electricity and environment regulators coordinately issue regulatory information; (ii) initial CO 2 allowances allocation through carbon market auction; (iii) load demands allocation through wholesale market auction; and (iv) CO 2 allowances submarket transaction. This article builds two stochastic mathematical programmings to explore generator's auction decision in both carbon market and wholesale market, which provides its optimal price-quantity bid curve for CO 2 allowances and power energy in each market. Through piece-wise adding up individual demand curve (supply curve) and matching with total supplied allowances (load demanded), market equilibrium is reached. Under this dispatch model, price upper-bound of bid allowances of generators is upward ordered and price lower-bound of bid electricity is downward ordered, according to their operational advantage from weak to strong. Meanwhile their bid electricity upper-bound gets respective capacity constraint or market share regulation. These features imply that the proposed model can prompt economic dispatch, improve resources allocation efficiency and bring about CO 2 mitigation effect. Numerical simulations also verified the validity of this CO 2 saving dispatch model.

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Analysis of design options for the electricity market: The German case

Cited by 74 publications

References 16 publications

A system operator’s utility function for the frequency response market

A system operator’s utility function for the frequency response market

Meeting the Modeling Needs of Future Energy Systems

An Optimal CO<sub>2</sub> Saving Dispatch Model for Wholesale Electricity Market Concerning Emissions Trade

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Analysis of design options for the electricity market: The German case

Cited by 74 publications

References 16 publications

A system operator’s utility function for the frequency response market

A system operator’s utility function for the frequency response market

Meeting the Modeling Needs of Future Energy Systems

An Optimal CO&lt;sub&gt;2&lt;/sub&gt; Saving Dispatch Model for Wholesale Electricity Market Concerning Emissions Trade

Contact Info

Product

Resources

About

An Optimal CO<sub>2</sub> Saving Dispatch Model for Wholesale Electricity Market Concerning Emissions Trade