Will the energy-only market collapse? On market dynamics in low-carbon electricity systems

Thomaßen, Georg; Redl, Christian; Brückner, Thomas

doi:10.1016/j.rser.2022.112594

Cited by 6 publications

(4 citation statements)

References 93 publications

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“…Flow battery (i) Independent energy and power rating a need to store surplus energy whenever it is available and discharging it when it is required [42,43]. As an additional beneft, energy storage can ofer auxiliary services such as voltage and frequency regulation to uphold the consistency and dependability of the power supply.…”

Section: Battery Type Advantages Disadvantagesmentioning

confidence: 99%

A Review on the Recent Advances in Battery Development and Energy Storage Technologies

Njema,

Ouma,

Kibet

2024

Journal of Renewable Energy

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Energy storage is a more sustainable choice to meet net-zero carbon foot print and decarbonization of the environment in the pursuit of an energy independent future, green energy transition, and uptake. The journey to reduced greenhouse gas emissions, increased grid stability and reliability, and improved green energy access and security are the result of innovation in energy storage systems. Renewable energy sources are fundamentally intermittent, which means they rely on the availability of natural resources like the sun and wind rather than continuously producing energy. Due to its ability to address the inherent intermittency of renewable energy sources, manage peak demand, enhance grid stability and reliability, and make it possible to integrate small-scale renewable energy systems into the grid, energy storage is essential for the continued development of renewable energy sources and the decentralization of energy generation. Accordingly, the development of an effective energy storage system has been prompted by the demand for unlimited supply of energy, primarily through harnessing of solar, chemical, and mechanical energy. Nonetheless, in order to achieve green energy transition and mitigate climate risks resulting from the use of fossil-based fuels, robust energy storage systems are necessary. Herein, the need for better, more effective energy storage devices such as batteries, supercapacitors, and bio-batteries is critically reviewed. Due to their low maintenance needs, supercapacitors are the devices of choice for energy storage in renewable energy producing facilities, most notably in harnessing wind energy. Moreover, supercapacitors possess robust charging and discharging cycles, high power density, low maintenance requirements, extended lifespan, and are environmentally friendly. On the other hand, combining aluminum with nonaqueous charge storage materials such as conductive polymers to make use of each material’s unique capabilities could be crucial for continued development of robust storage batteries. In general, energy density is a key component in battery development, and scientists are constantly developing new methods and technologies to make existing batteries more energy proficient and safe. This will make it possible to design energy storage devices that are more powerful and lighter for a range of applications. When there is an imbalance between supply and demand, energy storage systems (ESS) offer a way of increasing the effectiveness of electrical systems. They also play a central role in enhancing the reliability and excellence of electrical networks that can also be deployed in off-grid localities.

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Section: Battery Type Advantages Disadvantagesmentioning

confidence: 99%

A Review on the Recent Advances in Battery Development and Energy Storage Technologies

Njema,

Ouma,

Kibet

2024

Journal of Renewable Energy

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“…In reality, the perception of investors might differ from the actual profitability of investments. This is especially the case if investments rely on scarcity revenue, as scarcity events are correlated with extreme weather events, which are distributed very unevenly (Thomaßen, Redl, and Bruckner 2022).…”

Section: Limitations To the Approachmentioning

confidence: 99%

“…In addition, scarcity situations often occur during extreme weather events, such as cold spells (see for example Kemabonta 2021;Lavin et al 2020), and are therefore difficult to predict. This can lead to less investment in peak capacity than socially optimal, as investors might be unwilling to invest in such a risky environment (Fraunholz et al 2023;Thomaßen, Redl, and Bruckner 2022).…”

Section: Introductionmentioning

confidence: 99%

Resource Adequacy through Operating Reserve Demand Curves: Design Options and their Impact on the Market Equilibrium

Thomaßen,

Bruckner

2024

The Energy Journal

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Operating reserve demand curves (ORDCs) have become part of the electricity market design in several power systems. They improve the security of supply through enhanced peak prices that occur already when the system is running low on operating reserves, before an actual shortfall occurs. Previous research, however, suggests that the ORDC's impact on resource adequacy would be thwarted by the merit order effect.Hence, we propose a methodology to model the investment in markets with ORDC, which specifically captures the interaction with renewable deployment. A stylized power system setting is used to determine the market equilibrium at different stages of decarbonization, and compared to a conventional energy-only market. Classical ORDCs consistently increase reliability by attracting additional investments. This effect can be amplified by "shifting" the ORDC, increasing the willingness to pay for balancing reserves. Our results suggest that perfect reliability can be achieved with only moderate cost increases.

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“…The use of capacity mechanisms should be viewed as a backup solution, which is to be implemented only when long-term price formation is insufficient to ensure investment incentives. (Thomaßen et al, 2022) have extensively explored the suitability of an energy-only market for a decarbonization process, examining whether such a market will allow investors in generation assets to accommodate sufficient margins for the recovery of their original investment in such assets. Based on the combination of theoretical and analytical discussion, they established that current markets could align low carbon goals and scenarios with the outcomes of a competitive market.…”

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confidence: 99%

Should Electricity Market Designs be Improved to Drive Decarbonization?

Chattopadhyay¹,

Suski²

2022

Policy Research Working Papers

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The Policy Research Working Paper Series disseminates the findings of work in progress to encourage the exchange of ideas about development issues. An objective of the series is to get the findings out quickly, even if the presentations are less than fully polished. The papers carry the names of the authors and should be cited accordingly. The findings, interpretations, and conclusions expressed in this paper are entirely those of the authors. They do not necessarily represent the views of the International Bank for Reconstruction and Development/World Bank and its affiliated organizations, or those of the Executive Directors of the World Bank or the governments they represent.

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Will the energy-only market collapse? On market dynamics in low-carbon electricity systems

Cited by 6 publications

References 93 publications

A Review on the Recent Advances in Battery Development and Energy Storage Technologies

A Review on the Recent Advances in Battery Development and Energy Storage Technologies

Resource Adequacy through Operating Reserve Demand Curves: Design Options and their Impact on the Market Equilibrium

Should Electricity Market Designs be Improved to Drive Decarbonization?

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