Liberalized Electricity Market Research Articles

Contract design in electricity markets with high penetration of renewables: A two-stage approach

The interplay between risk aversion and financial derivatives has received increasing attention since the advent of electricity market liberalization. One important challenge in this context is how to develop economically efficient and cost-effective models to integrate renewable energy sources (RES) in the electricity market, which constitutes a relatively new and exciting field of research. This paper proposes a game-theoretical equilibrium model that characterizes the interactions between oligopolistic generators in a two-stage electricity market under the presence of high RES penetration. Given conventional generators with generation cost uncertainty and renewable generators with intermittent and stochastic capacity, we consider a single futures contract market that is cleared prior to a spot market where the energy delivery takes place. We introduce physical and financial contracts to evaluate their performance and assess their impact on the electricity market outcomes and examine how these depend on the level of RES penetration. Since market participants are usually risk averse, a coherent risk measure is introduced to deal with both risk neutral and risk averse generators. We derive analytical relationships between contracts, study the implications of uncertainties, test the performance of the proposed equilibrium model and its main properties through numerical examples. Our results show that overall electricity prices, generation costs, profits, and quantities for conventional generators decrease, whereas quantities and profits for RES generators increase with RES penetration. Hence, both physical and financial contracts efficiently mitigate the impact of uncertainties and help the integration of RES into the electricity system. However, each type of contract has different quantitative impacts on the market outcomes. Moreover, risk aversion increases profit and decreases generators’ risk under different levels of competition by shielding them from the risk associated with cost, demand, and RES uncertainties.

A Comprehensive Assessment of Fundamental Overcurrent Relay Operation Optimization Function and Its Constraints

The optimization of overcurrent relays’ operation is a topic associated with protection coordination of distribution networks. Usually, this refers to medium-voltage networks, since they are protected by numerical relay devices, as opposed to low-voltage networks, where utility operators allocate fuses. Correct setting of relays and optimal coordination is becoming a serious challenge to Distribution Network Operators around the world, since their networks’ passive operation has been greatly altered in the past two decades. Distributed generation units, a growing liberalized electricity market and more stringent legislation for distribution network planning and operation by state regulatory bodies have all indirectly affected the evolving of protection philosophy for distribution networks. In this paper the traditional optimization problem of overcurrent relay operation will be addressed and critically examined from both a theoretical and practical point of view. Optimization function, constraints and relay parameters will all be observed and compared with solutions used in distribution networks, and their modifications and improvements will be proposed and elaborated in detail.

Contracting Strategy for Consumers With Distributed Energy Resources in the Liberalized Electricity Market

The rapid growth of distributed energy resources (DERs) and the new trends related to the electricity market can represent economic advantages for consumers; nevertheless, these trends can bring economic risks, such as high prices when contracting, and the inability to forecast information related to offers and demand. A contracting strategy is essential to minimize possible financial losses due to consumer exposure in the liberalized electricity market. This paper proposes a contracting strategy based on consumption forecasting and a pricing methodology to optimize the contract portfolio for consumers with DERs. A consumer with a photovoltaic system and battery storage system has been considered to model the contracting strategy through a mathematical programming approach developed in four stages; the first and second stages are nonlinear programming problems, the third stage is linear programming problem, and the last stage is mixed-integer linear programming problem. The results of the case study, considering a real consumer with and without DERs, show that the strategy successfully minimized consumer exposure in the electricity market, since with operation of DERs was reduced by 45.8% the energy consumption from the main grid and by 49.7% the need for contracting, optimizing the average price of the contract portfolio and making it possible to determine an optimal contracting strategy.

Consumer's behavior determinants after the electricity market liberalization: the Portuguese case

<abstract> <p>Electricity markets have been liberalized worldwide, but the success of country specific experiences varied widely. Consumers' behavior is among the key factors for successful liberalization experiences namely regarding the decision to switch operator. This decision has been shown to be influenced by a multiplicity of factors. The goal of this article is to explore the analysis of the drivers for switching operator in a liberalized electricity market. With that purpose, we focused on the residential Portuguese case using a questionnaire. The logit estimation showed that men are more likely to switch supplier than women and that larger families are less likely to do so probably, due to the perception of high information search costs. Other sociodemographic variables were not found to be statistically significant. Regarding specific determinants, our results showed that past experiences with a supplier, dissatisfaction with the current operator, and family and friends' experiences were the most important determining factor for the decision to switch operator. Hence, the price was not the most important determinant. We also explored if different income groups had differentiated responses regarding the main drivers but concluded that there was no evidence that the income group affected the importance given to the price or to the other determinants for the decision.</p> </abstract>

The Liberalised Electricity Market? A Critically Analysis As to Whether Liberalisation Was Successful in Achieving a Single, Competitive and Well-Functioning European Energy Market

The Liberalised Electricity Market? A Critically Analysis As to Whether Liberalisation Was Successful in Achieving a Single, Competitive and Well-Functioning European Energy Market

Modelling of overhead transmission lines with composite towers for 35-330 kV electric power networks

Based on the analysis of the technical condition of the equipment of the electric power networks of the UES of Ukraine, current challenges in the development of the energy sector and existing technologies for the transmission of electric energy, the expediency of using towers made of composite materials in the development, reconstruction and design of new overhead transmission lines for electric networks of different voltage classes is substantiated. The peculiarities of operation of towers made of composite materials in electric networks of many countries of the world are investigated, on the basis of which the prospects of using such towers for overhead transmission lines in Ukraine in the conditions of the introduced liberalised electricity market, as well as the requirements for the performance of electric power networks with the investigated towers made of composite materials are formulated. The article analyses the main characteristics and properties of composite materials that are most commonly used for the manufacture of towers in modern energy systems, as well as compares the physical and mechanical properties of towers made of different materials. The analysis of the obtained results confirms certain advantages of towers made of composite materials, which contribute to the widespread introduction of such towers in the Ukrainian energy system. To investigate the influence of the type of composite material and the design of the towers on the performance of electrical networks, a mechanical calculation of the towers was performed using the method of limit states. Using the obtained results, mathematical models of overhead transmission lines with composite towers for electric power networks with a voltage of 35-330 kV were developed, which take into account the technical characteristics of overhead transmission line elements and the operating conditions of electric power networks, and also allow forecasting quantitative indicators of further operation of the investigated electric power networks.

Design of the Model of Optimization of Energy Efficiency Management Processes at the Regional Level of Slovakia

This paper focuses on the issue of energy efficiency management in the region of Prešov self-governing region (PSR), Slovakia, as the energy market is liberalized and the behavior of electricity consumers is influenced not only by conventional but also by alternative suppliers of this type of energy. Based on the statistical evaluation of a questionnaire survey focused on the emotional, behavioral, and cognitive behavior of consumers, a model of optimization of system processes of energy efficiency management at the regional level is presented. A one-way ANOVA and t-test were used to determine statistically significant differences, and Pearson’s correlation coefficient was used to determine a statistically significant relationship. Based on the obtained results, a suitable candidate for efficient electricity management is an employee aged 36 to 50 with a technical focus. The proposed model of optimizing the processes of energy management efficiency at the regional level can also be applied to the supraregional level in the understanding of the geographical division of the European Union, where the same legislative regulations are applied within the liberalized electricity market.

Private Risk and Social Resilience in Liberalized Electricity Markets

Energy-only electricity markets, such as that operated by the Electric Reliability Council of Texas (ERCOT), rely on the decentralized investment decisions of market participants to lead to a resource mix providing an efficient level of reliability. During an exceptionally cold winter storm in February 2021, ERCOT experienced shortfalls on an unprecedented scale, with nearly half of the generation fleet experiencing outages at the peak. The depth of the resulting blackouts invites questions regarding the ability of systems relying on decentralized planning to appropriately prepare for and withstand rare events. Based on two mild assumptions, risk aversion among investors and incomplete risk trading, this paper offers an explanation for why decentralized markets are prone to underinvestment in resilience. We describe the nature of the incomplete risk trading that arises in the context of electricity markets and discuss potential market, market-like, and non-market remedies.

Long-term renewable electricity planning using a multistage stochastic optimization with nested decomposition

Renewable energy plays a key role in mitigating climate change and promoting the energy transition. In this context, we address two crucial consequences for planning the electricity transition: (a) substantially more complex uncertainties in variable renewable energy and (b) a requirement to co-ordinate extensive transmission investment with the newly located generating facilities. These features combine to present a major modelling challenge both for countries that have a liberalized electricity market, where long terms plans are needed to support subsidy policies, as well as for those countries which have retained central planning. This paper develops a new multistage stochastic mixed-integer model which uses a new decomposition algorithm based on stochastic dual dynamic integer programming, with a two-phase acceleration method. The scalability of the approach is demonstrated by application to China’s electric power requirements and it performs well in terms of computational tractability and policy insights.

Potential economic value of integrating concentrating solar power into power grids

Increasingly, climate neutrality is becoming a consensus among many countries. While this can motivate toward higher proportions of renewable energy, it can also result in significant increases in the volatility of power systems. Concentrating solar power (CSP) combines the features of zero-emissions and dispatching capability, rendering it an ideal technology for sustainable power systems. In comparison with other clean energy generation technologies, CSP remains expensive with a levelized cost of energy (LCOE) of 0.184 $/kWh in 2018. However, in addition to LCOE, the benefits of integrating CSP for the entire power system are worth considering for a liberalized electricity market. This paper presents the development of a multistage stochastic programming model, in which the uncertainty of variable renewable energy is indicated by a modified scenario tree approach. A case study is demonstrated based on three provinces in China with different generation structures. The results demonstrate the economic value of CSP integration, which increases its investment potential—especially when combined with more variable renewables.

Intelligent Photovoltaic Power Forecasting Methods for a Sustainable Electricity Market of Smart Micro-Grid

Smart micro-grid (SMG) is a growing segment of the modern power grid. Besides the benefits brought in terms of improving power reliability, power quality, security, and sustainability, and promoting competitiveness in a new deregulated electricity market, SMG is still in the early commer <sup xmlns:mml="http://www.w3.org/1998/Math/MathML" xmlns:xlink="http://www.w3.org/1999/xlink">c</sup> ial stage. This article introduces the SMG con-cept-based forecasting mechanisms. It highlights the role of the power production and profit forecasting methods to drive the SMG deployment with the liberalized electricity market concept. Finally, some open issues in SMG deployment such as standardization and regulations are presented as key drivers for SMG success.

Investing in generation and storage capacity in a liberalised electricity market: An agent based approach

The power sector is undergoing a period of significant change, in terms of the mix of generation technologies, as well as the structure of energy markets, regulation and assets ownership. The shift to a more liberalised electricity system has resulted in an increase in the number of decision makers. This paper demonstrates an agent-based approach for investigating the long-term investment in the GB power generation sector, whilst considering the operability of the system. A key focus of this study is to investigate the efficacy of a range of policies to reduce the emissions and facilitate investment in renewable generation and battery storage. In order to capture the value of battery storage, the hourly operation of the electricity system, considering short-term variation of demand, renewable generation and wholesale electricity prices (including negative prices during high renewable and low demand events), was incorporated in the long-term investment model. The modelling results show while the cost of battery storage is expected to decrease gradually in future, a substantial subsidy is still required to justify investment in battery storage. The deployment of battery storage provides a significant reduction in the overall power generation system cost, peak demand and carbon emissions.

ASSESSMENT OF CONSUMERS POWER CONSUMPTION OPTIMIZATION BASED ON DEMAND SIDE MANAGEMENT

To ensure the functioning of the energy system, coordination and increase the efficiency of its parts need new control mechanisms. Generation, transmission and consumption of electricity needed control mechanisms that include integration of self-organizing power and heat supply systems, built on multi-agent principle. Also they must correspond intellectual basis, monitoring and accumulation. This includes effectiveness assessment of the state and analysis of technical, technological and organizational management mechanisms. One of the main parts is interaction principles of energy systems in accordance with European Community policy at various levels at liberalized electricity market.&#x0D; In most developed countries, demand management programs are widely used as a means of harmonizing the modes of generation and consumption in the power supply system. The main direct methods are set in the form of electricity tariffs. Indirect methods are set in the form of programs to manage electricity demand and the possibility of their application to manage electricity demand. Methods for estimating the unevenness of the daily schedule of electricity consumption and the factors influencing the technological environment are presented.&#x0D; The work aims at scientific and applied problem – finding methods of estimation and features of managing the demand for electricity.&#x0D; The use of the proposed estimation methods of electricity consumption influence non-uniformity on the level of power supplies system losses based on Frize QF power and optimization of consumers’ operation modes in the power supply system is considered.&#x0D; Approaches and optimization mechanisms of the daily electricity consumption on the example of a residential complex with the possibility of energy accumulation are offered

ФОРМУВАННЯ ІНФОРМАЦІЙНОГО ЗАБЕЗПЕЧЕННЯ ЗАВДАНЬ КЕРУВАННЯ ВИРОБІТКОМ ТА ВІДПУСКОМ ЕЛЕКТРОЕНЕРГІЇ ТЕПЛОЕЛЕКТРОЦЕНТРАЛЛЮ В УМОВАХ ФУНКЦІОНУВАННЯ ЛІБЕРАЛІЗОВАНОГО РИНКУ ЕЛЕКТРИЧНОЇ ЕНЕРГІЇ

The liberalization of the electricity market aims at the most complete repletion of consumer needs for electricity and quality power supply, which requires the adaptive management of an energy using both by demand side and by the electricity producers – power plants. The successful solution of this task provides, in particular, for using the effective methods and reliable means for the formation of the informational support for the tasks of managing the power generation and delivery on the power plants in order to ensure conforming in real time the market power bids to current demand side asks. The article proposes a methodology, describes the implemented tools and analyzes the experience of managing the power generation and delivery on the cogeneration power plant based on the information which formed by the automated system for control, metering and energy management in the conditions of functioning of the liberalized electricity market of Ukraine. References 10, figures 5.

Breaking Iron Triangles: Beliefs and Interests in Japanese Renewable Energy Policy

Abstract This article analyses Japan’s renewable energy policy changes, with a focus on the interaction of multiple catalysts on changing positions, beliefs and interests of dominant-group members, and inducing non-incremental renewable policy changes (an innovative but less effective Renewable Portfolio Standard (RPS) in 2003 as well as a partial FIT for photovoltaics in 2009 and ultimately a more effective full-scale FIT to promote renewables in 2011). The examined multiple catalysts include the governing coalition change from the Liberal Democratic Party (LDP) to the Democratic Party of Japan (DPJ) in 2009 and four other catalysts (the oil crisis, climate change, electricity market liberalisation, and nuclear accidents) that relate to the values underlying Japan’s energy policymaking: energy security, environment, economic efficiency, and safety (3E+S). The article concludes that the latter four catalysts were critical in creating and expanding cleavages among dominant-group members over a long period sufficient to realise the introduction of RPS and a partial FIT, but not sufficient to introduce the full-scale FIT. The 3/11 disaster after the governing coalition change was indispensable to achieving a full-scale FIT as it affected dominant-group members’ interests in removing Kan Naoto from office, after Kan made the FIT law passage one of the conditions for his voluntary resignation. Based on the empirical study, this article also addresses one of the underexplored theoretical questions, the effects of and relationship between multiple catalysts in non-incremental policy change.

ENERGY MARKET LIBERALISATION IN GREECE: STRUCTURES, POLICY AND PROSPECTS

The ongoing regulatory transformation towards a single European electricity market started several years ago. The rationale of this transformation is that the liberalisation of monopolistic energy structures should lead to the building of sustainable and flexible energy ecosystems, through an energy policy that sets goals in line with the requirements of our epoch, such as sustainable development, energy security, and the promotion of renewable energy sources. In this context, the liberalisation of the electricity market in Greece is explored, which is a complicated case in terms of development as it has only recently begun to exit from a long-term socio-economic crisis and strict adjustment programs. The concepts of energy market liberalisation, energy ecosystems, and energy policy are presented and compared to the main directions of the EU institutional environment and the evolution of the political and institutional framework of Greece. In Greece, an attempt has been made in recent years to liberalise the electricity market, which is hindered for a long time by socio-economic forces favoured by the monopolistic system of the market. This liberalisation process is also an opportunity for the country to move towards enhancing the structures that can lead to faster and more sustainable development and to maintain the pace of “coupling” with the most developed energy economies of Europe.Keywords: Energy market liberalisation, Electricity market liberalisation, Energy business ecosystem, Energy policy, EU energy packages, Greek energy system JEL Classifications: Q40, Q43, Q49 DOI: https://doi.org/10.32479/ijeep.10804

Analiza ekonomske opravdanosti investiranja u solarnu elektranu sa vertikalno postavljenim bifacijalnim fotonaponskim modulima u perspektivnim uslovima slobodnog tržišta

After the expiration of governmental incentive measures for renewable energy sources integration, economic feasibility of investing into solar power plants will highly depend on compatibility between production and variable prices. In order to achieve the maximum possible profit of the power plant in liberalized electricity market, it is necessary to consider the possibility of investing in solutions that are not common today, but with the potential of being more profitable in the future. Such a solution is a solar power plant consisting of vertically placed bifacial modules whose active surfaces are oriented in the east-west direction. This configuration of the power plant can achieve higher production in periods of high prices, and thus higher profits from the sale of electricity. On the other hand, such a solution is more expensive than a standard solar power plant with monofacial modules. In this paper, a comparison of return on investment in a bifacial power plant and a monofacial power plant with existing and prospective market conditions is performed. The influence of solar power plant production on the price of electricity was investigated on the example of Germany. Based on this research, a prognostic model of the daily price diagram on the unified European market until 2040 was formed. It served for the analysis of the profitability of investments in the two considered variants of the solar power plant realization.

Issues and Potentials of Local PPS in Realizing a Japanese Version of Stadtwerke

This paper presented an overview of local power producers and suppliers (local PPS) that were established in Japan since the general liberalization of the retail electricity market, with particular focus on the current situation and issues of the local PPSs in terms of their operations and their renewable energy-related efforts. Further, this paper analyzed relevant cases in Ishikari city in Hokkaido, Karatsu city in Saga prefecture, and Sakura city in Chiba prefecture, to discuss and inform future efforts towards realizing a Japanese version of Stadtwerke.

The selection of predictive variables in aggregate hydroelectric generation models

The liberalization of the Italian electricity market has led to a situation where the logic of maximizing operators’ profits prevails. In this context, it is essential for electricity producers to be able to formulate supply strategies. Therefore, plants that can buy or store the energy resources they use to produce electricity are advantaged, because they can choose when to produce with more flexibility. This feature is often absent in environmentally sustainable electrical plants, although hydropower storage plants offer flexibility to the electricity system and allow their operators to formulate bidding strategies. This paper provides a method to identify the best predictive variables and the appropriate predictive indexes for an aggregate hydropower storage forecasting model. To this end, we use an entropy-based approach. The optimal subset can be considered complete, meaning it incorporates both market and physical variables, including those influencing the timing of snowpack melting. In particular, we show that the variables that incorporate the expectations of the operators always have a more dominant role than the realized variables in understanding the current hydropower generation. We find evidence of a cyclicality, over the year, of relevant drivers in the representative subset; in particular, we show the mechanism by which, during this cycle, some variables become more or less influential on others.

Optimal Energy Storage Allocation Strategy by Coordinating Electric Vehicles Participating in Auxiliary Service Market

The further liberalization of China's electricity market encourages demand-side entities to participate in electricity market transactions. Electric vehicles (EVs) are developing rapidly and have high regulating potential, and are the main force for demand-side participation in the auxiliary service market. Aiming at the problems of dispatching accuracy and economy in EV participation in auxiliary service market, this paper analyzes the bidding strategy and dispatching scheme of EV-storage participation in auxiliary service market, and proposes EV-storage optimal allocation strategy with the goal of economic optimum. In the process of optimal allocation, based on the market rules of third-party subject participation in auxiliary services, the bidding strategy of EV-storage coordinated EV participation in auxiliary services market considering daily load scale changes is designed, while the conditional value at risk (CVaR) method is used to determine the short-term coordinated energy storage capacity and efficiency storage capacity considering the uncertainty of EV response situation; then, based on the annual EV load scale change, the benefit calculation function is constructed by considering various factors such as auxiliary service market revenue, spread revenue, investment cost and market opportunity cost of EV-storage participation in the auxiliary market. Finally, taking EV aggregation participation in the valley-filling ancillary service market as an example, it is verified that the strategy proposed in this paper can effectively improve the responsiveness of EV participation in the ancillary service market and increase the revenue of electric vehicle aggregator (EVA).