Decision strategies in sequential power markets with renewable energy

Koolen, Derck; Huisman, Ronald; Ketter, Wolfgang

doi:10.1016/j.enpol.2022.113025

Cited by 4 publications

(2 citation statements)

References 59 publications

(68 reference statements)

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“…Modelling the supply and demand side of power markets in a closed system, allows us to relate forward and spot price formation processes back to the risk preferences of producers and retailers. For a more detailed discussion on the model, see Koolen (2019). We summarise the features of the model here, the complete derivation can be found in the Appendix A.1.…”

Section: Equilibrium Modelmentioning

confidence: 99%

Renewable Energy Technologies and Electricity Forward Market Risks

Koolen¹,

Bunn²,

Ketter³

2021

The Energy Journal

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We analyse how the introduction of the same renewable energy technology at different parts of the electricity supply chain has different price formation effects on wholesale power markets. We develop a multi-stage competitive equilibrium model to evaluate the effects on short-term price formation of a technology shift from conventional to both large-scale renewable energy production (e.g. wind and solar farms) and distributed renewable energy sources (e.g. rooftop solar). We find that wind and solar technologies oppositely affect the forward risk premium, and this is related to technology-varying, risk-related hedging pressures of producers and retailers. We form a multi-factor propositional framework and empirically validate the model by analyzing data from California and Britain; two markets which recently experienced significant increases of renewable power, in terms of utility scale and distributed sources. The work is innovative in showing theoretically and empirically how different types of renewable technologies influence market price formation differently. This has implications for market participants facing wholesale price risks, as well as regulators and policy-makers.

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Section: Equilibrium Modelmentioning

confidence: 99%

Renewable Energy Technologies and Electricity Forward Market Risks

Koolen¹,

Bunn²,

Ketter³

2021

The Energy Journal

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“…The electricity spot market is a market based on variable costs, and the variable costs of renewable energy are extremely low. It is conducive to participating in market competition and promoting consumption [8,9]. However, the market quotations are random and irrational, and there may be game quotations with excessively high renewable energy quotations, resulting in the failure of renewable energy producers to win the bid.…”

Section: Introductionmentioning

confidence: 99%

Research on the Electricity Market Clearing Model for Renewable Energy

Wang

2022

Energies

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The development of renewable energy in China has made remarkable achievements, but the problem of renewable energy consumption has become increasingly prominent. This paper establishes a power market trading system for renewable energy, with the aim of promoting large-scale renewable energy consumption and increasing the enthusiasm of renewable energy producers and users to participate in market transactions. First, according to the power generation cost, the backup cost of renewable energy power plants and the possible quotation strategies of other renewable energy producers, a quotation model of renewable energy producers is established. In the clearing of the spot market by renewable energy producers, the independent market operator conducts the first-stage clearing of the electricity market with the goal of maximizing social welfare. After the announcement of the clearing results, the renewable energy producers that did not win the bid will revise their quotations and carry out the second stage clearing to realize the consumption of renewable energy. In this paper, the particle swarm algorithm combined with the CPLEX solver is used to solve the problem, and finally, different scenarios are analyzed through example analysis. The results show that, compared with the conventional power market trading mechanism, the energy abandonment rate of the power market trading mechanism for renewable energy proposed in this paper drops from 8.2% to 2.1%, and the profit margin of renewable energy producers increase by 6.6%. It is demonstrated that the proposed electricity market mechanism can effectively promote the consumption of renewable energy and increase the income of renewable energy producers.

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