Locational signals in electricity market design: Do they really matter?

Hadush, Samson Yemane; Buijs, Patrik; Belmans, Ronnie

doi:10.1109/eem.2011.5953086

Cited by 3 publications

(5 citation statements)

References 2 publications

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“…of significant strength (see also Wagner, 2019;Eicke et al 2020). Greater spatial locational signalling must prima facie be helpful, but, while zone splitting or nodal markets invariably enhance dispatch efficiency, they do not necessarily provide stable, predictable or strong signals as Hadush et al (2011) illustrate. Further, all markets (including nodal markets) use multiple signalling mechanisms and consequently there are multiple pathways to establish or enhance locational signals for VRE investment (Eicke et al 2020).…”

Section: Locational Investment Signals In Energy Marketsmentioning

confidence: 99%

“…Specifically, in their examination of 12 of the world's major wholesale power markets, Eicke et al (2020) For VRE investment commitment decisions, what matters are ex ante expectations and the strength of locational signals rather than ex post actual outcomes, because once a locational generation investment decision is made it is irreversible (Hadush et al 2011;Eicke et al 2020). Locational signals that are rules-based enhance predictability and therefore accuracy of ex ante expectations.…”

Section: Locational Investment Signals In Energy Marketsmentioning

confidence: 99%

“…Solving (real-timeframe) network congestion is a different problem to solving (planning-timeframe) investment commitment location signals. In practice, there are limited options for dealing with the former, and as noted earlier, multiple options for guiding the latter (Hadush et al, 2011). The purpose of this article is to add a new variable to that list, viz.…”

Section: Anticipatory Transmission Planner: 'Guiding the Market'mentioning

confidence: 99%

“…Additionally, asHadush et al (2011) explain, the stability, predictability and magnitude of locational signals are important variables in guiding location decisions of new plant but other factors can dominate investment decisions. Multiple studies show how policies such as ill-designed Contracts-for Differences auctions based on levelized costs can dismantle the efficacy of locational marginal prices, adversely impact location decisions or distort incentives…”

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confidence: 99%

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Renewable Energy Zones in Australia's National Electricity Market

Simshauser

2021

Energy Economics

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Australia's National Electricity Market operates in one of the world's longest and stringiest transmission networks. The 2016-2020 investment supercycle, in which 13,000 MW of renewables were committed, is slowly revealing the limits of network hosting capacity for renewable plant. In this article, side-effects arising from the supercycle are analysed. The majority sources of renewable investment failure relate to deteriorating system strength, viz. associated connection lags, remediation and curtailment costs. Although a multi-zonal market, the NEMs locational investment signals remain visibly strong. A change to nodal arrangements may refine dispatch efficiency but the bigger policy problem is rapidly diminishing network hosting capacity for new renewables, imperfect regulation and regulatory lag associated with augmentation. Markets participants seek to move faster than regulatory frameworks allow. Renewable Energy Zones (REZ) are examined through both i). a consumer-funded regulatory model and ii). a renewable generator-funded market model. A 'supersized concessional mezzanine' facility is presented as a critical element of REZ capital funding. It forms the means by which to optimise market-based REZ transmission augmentation and moderate sponsor risks of transient underutilisation.

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Section: Locational Investment Signals In Energy Marketsmentioning

confidence: 99%

Section: Locational Investment Signals In Energy Marketsmentioning

confidence: 99%

Section: Anticipatory Transmission Planner: 'Guiding the Market'mentioning

confidence: 99%

mentioning

confidence: 99%

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Renewable Energy Zones in Australia's National Electricity Market

Simshauser

2021

Energy Economics

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“…Only a few authors compare locational investment incentives across instruments. Hadush et al (2011) examine market splitting, loss factors, grid usage charges and grid connection charges associated with European case studies. The authors assess each instrument's effect on investment decisions based on the criteria stability, predictability and strength.…”

Section: Introductionmentioning

confidence: 99%

Locational Investment Signals: How to Steer the Siting of New Generation Capacity in Power Systems?

Eicke¹,

Khanna²,

Hirth³

2020

The Energy Journal

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New generators located far from consumption centers require transmission infrastructure and increase network losses. The primary objective of this paper is to study signals that affect the location of generation investment. Such signals result from the electricity market itself and from additional regulatory instruments. We cluster them into five groups: locational electricity markets, deep grid connection charges, grid usage charges, capacity mechanisms, and renewable energy support schemes. We review the use of instruments in twelve major power systems and discuss relevant properties, including a quantitative estimate of their strength. We find that most systems use multiple instruments in parallel, and none of the identified instruments prevails. The signals vary between locations by up to 20 EUR per MWh. Such a difference is significant when compared to the levelized costs of combined cycle plants of 64-72 EUR per MWh in Europe.

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Research on the Synergy of the Electricity Prices Providing Location Signals under Electricity Spot Market Environment

Tian

Shaolin

et al. 2021

2021 6th Asia Conference on Power and Electrical Engineering (ACPEE)

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Locational signals in electricity market design: Do they really matter?

Cited by 3 publications

References 2 publications

Renewable Energy Zones in Australia's National Electricity Market

Renewable Energy Zones in Australia's National Electricity Market

Locational Investment Signals: How to Steer the Siting of New Generation Capacity in Power Systems?

Research on the Synergy of the Electricity Prices Providing Location Signals under Electricity Spot Market Environment

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