Short term wholesale electricity market designs: A review of identified challenges and promising solutions

Silva-Rodriguez, Lina; Sanjab, Anibal; Fumagalli, Elena; Virag, Ana; Gibescu, Madeleine

doi:10.1016/j.rser.2022.112228

Cited by 27 publications

(11 citation statements)

References 109 publications

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“…Silva-Rodriguez et al [6] studied short-term changes to the electricity market model proposed in the literature and assessed their suitability for improving market performance. The results of their analysis showed that there is a lack of a comprehensive solution to improve market design, as the literature offers solutions only for specific issues affecting the market model.…”

Section: Introductionmentioning

confidence: 99%

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A Systematic Review of European Electricity Market Design Options

2023

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The European electricity market model continues to evolve in the face of new challenges. This systematic literature review aims to assess the status of research and discussion on the current model and its market mechanisms. In addition, it aims to ascertain the kinds of modelling tools that have been used to model market mechanisms or formulate proposals for changes to current practice. The results show that the challenges of individual market mechanisms have been identified quite extensively in the research sample. However, the number of papers identified for inclusion in the systematic literature review was quite small, from which it can be concluded that there are surprisingly few publications focusing on this particular topic. Nevertheless, the trend indicates a probable increase in research in the subject area in the future. The general standpoint among researchers seems to be that the goals set by the EU are, as it were, a law of nature that cannot be deviated from. Consequently, new radical change proposals or comprehensive reforms were not encountered in the study. In addition, it was found that optimization was the most commonly used modelling method in the papers included in the literature review.

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Section: Introductionmentioning

confidence: 99%

“…In Ref. [6], for example, examination of market mechanisms is limited to short-term markets, and Winkler and Altmann [4] disregard market design developments at the European level. Furthermore, the analyses in Refs.…”

Section: Introductionmentioning

confidence: 99%

A Systematic Review of European Electricity Market Design Options

2023

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“…The increasing integration of distributed energy resources (DERs) and electrification of the consumer energy space (e.g., transportation and heating) pose challenges for grid operation, due to the induced uncertainty and changing load patterns [1], [2]. However, this new energy landscape also enables an unprecedented growing volume of invaluable flexibility 1 (from different voltage levels of the grid) thereby providing essential services (e.g., congestion management and balancing) for transmission system operators (TSOs) and distribution system operators (DSOs).…”

Section: Introductionmentioning

confidence: 99%

“…of flexibility [4], [7], to maximize the grid and system-level value of this flexibility 2 . In particular, a key focus has been shed on the need for coordination between SOs to achieve joint procurement, not only for optimization of economic efficiency but also to ensure that the activated flexibility meets grid operational constraints of all the grids involved [3]- [6], [16], [17].…”

Section: Introductionmentioning

confidence: 99%

“…Under a pool-based electricity market, the Shapley value (an allocation concept from cooperative game theory) has been adopted for tariff computation of transmission loss charges [22]. Cooperative game theory has also been employed to facilitate the planning [23] and 2 A number of works in the literature [10]- [15] has also focused on estimating and modeling the flexibility capacity at the TSO-DSO interface (i.e., the collective volume of flexibility that could be provided by distribution systems to TSOs, while taking distribution network constraints into account) -using, e.g., the identification of distribution system flexibility regions. This provides a main guide for TSO-DSO coordination for the procurement of flexibility but differs in scope from a co-optimized joint procurement process.…”

Section: Introductionmentioning

confidence: 99%

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TSO-DSOs Stable Cost Allocation for the Joint Procurement of Flexibility: A Cooperative Game Approach

Sanjab

Cadre

Mou

2022

IEEE Trans. Smart Grid

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In this paper, a transmission-distribution systems flexibility market is introduced, in which system operators (SOs) jointly procure flexibility from different systems to meet their needs (balancing and congestion management) using a common market. This common market is, then, formulated as a cooperative game aiming at identifying a stable and efficient split of costs of the jointly procured flexibility among the participating SOs to incentivize their cooperation. The non-emptiness of the core of this game is then mathematically proven, implying the stability of the game and the naturally-arising incentive for cooperation among the SOs. Several cost allocation mechanisms are then introduced, while characterizing their mathematical properties. A case study is then presented, considering an interconnected system composed of the IEEE 14-bus transmission system and the Matpower 18-bus, 69-bus, and 141-bus distributions systems. The numerical results showcase the cooperation-induced reduction in system-wide flexibility procurement costs, and identify the varying costs borne by the different SOs under different cost allocations methods.

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