Policy Implications of Power Exchanges on Operational Scheduling: Evaluating EUPHEMIA’s Market Products in Case of Greece

Abstract

A vital component for the development of a functioning internal electricity market is the adoption by each European member state of the Pan-European Hybrid Electricity Market Integration (EUPHEMIA) for the day-ahead market solution. The consideration of the national power market’s characteristics enables more realistic market design towards the implementation of the so-called “Target Model”. This work considers a series of factors, including the EUPHEMIA order types, their use by market participants, the relative competitiveness of power generators, the impact of interconnected markets, the existence of market players with dominant positions, and the existence of specific regulations such as the minimum average variable cost restriction on offers by producers, as well as the strategy adopted by market participants. The main goal of this paper is to provide a comprehensive analysis on the adoption of EUPHEMIA’s algorithm in case of the Greek wholesale market, based on a relevant research project funded by the Joint Research Centre of the European Commission to support the Hellenic Regulatory Authority of Energy on its decision-making. The paper contributes to the relevant literature on the quantification of the impacts of the EUPHEMIA algorithm in the case of the Greek wholesale market, providing insights on the crucial aspects affecting realistic, market-based decision-making.

Impact of Bilateral Contracts on Wholesale Electricity Markets: In a Case Where a Market Participant Has Dominant Position

“…As mentioned above, the Greek interconnected power system has been examined. Details on its characteristics are provided in recent papers [13][14][15][16]. In Greece, the Public Power Corporation (PPC) has a dominant position with about 80% of the retail market at the end of the year 2018.…”

“…As mentioned in the previous sections, the simulations have been done by an optimization model that provides the economic dispatch and clearing of the day-ahead electricity market. The model developed in a recent paper [15] is further extended to incorporate the impact of bilateral contacts, which is a supplementary mechanism to the energy exchange that clears the wholesale market. In Greece, the wholesale market is currently organized as a mandatory pool, where all producers and retailers are obliged to participate.…”

“…Li et al [14] identified the need for technical constraints towards a robust co-optimization of energy and reserves in real-time electricity markets Market reform might also include the adoption of other market algorithms for the clearing of the day-ahead market. Koltsaklis and Dagoumas [15] examined the adoption of the Pan-European Hybrid Electricity Market Integration Algorithm (EUPHEMIA) in the Greek electricity market, aiming to quantify the effects of different order types as well as of the strategy of a market participant with the dominant position. The paper identifies in its conclusions the need to focus more on the impact of bilateral contracts.…”

“…The paper identifies in its conclusions the need to focus more on the impact of bilateral contracts. The model developed in a recent paper [15] is further extended to incorporate the impact of bilateral contacts, which is a supplementary mechanism to the energy exchange that clears the wholesale market. The critical question that is addressed is if the liquidity of bilateral contracts among retailers and producers affects the wholesale market, namely the price signal of the energy exchange as well as the energy mix per technology and per producer.…”

“…The critical question that is addressed is if the liquidity of bilateral contracts among retailers and producers affects the wholesale market, namely the price signal of the energy exchange as well as the energy mix per technology and per producer. The methodology used in the paper builds on the work done at the Energy and Environmental Policy Laboratory of the University of Piraeus on unit commitment modelling [16,17], as well as on the European market clearing algorithm [15,18]. The simulations have been done by an optimization model that provides the economic dispatch and clearing of the day-ahead electricity market.…”