Energy Market Integration Research Articles

A game model based optimisation approach for generalised shared energy storage and integrated energy system trading

In the context of integrated energy systems, the synergy between generalised energy storage systems and integrated energy systems has significant benefits in dealing with multi-energy coupling and improving the flexibility of energy market transactions, and the characteristics of the multi-principal game in the integrated energy market are becoming more and more obvious, but it is difficult to improve the flexibility of the transactions between “source-load-storage” in a one-way master–slave game structure, and the problem of how to establish an optimisation strategy for the coordination of integrated energy systems and energy storage systems is an urgent issue. How to establish a coordinated optimisation strategy of integrated energy system and energy storage system is an urgent problem. Therefore, this paper proposes a generalised shared energy storage and integrated energy system transaction optimisation method based on a two-stage game model, which improves the flexibility of the system transaction by constructing a two-stage game energy transaction model in which the subject acts as a leader and a gamer. Compared with the current one-way game model that does not consider the game on the energy storage side, the coordinated optimisation method proposed in this paper enables the energy storage side to participate more actively in the scheduling, which improves its revenue by 20.6%, the revenue on the energy-using side by 6.3%, and the overall revenue of the system by 5.4%, and at the same time, the load demand response regulation effect is more obvious, so the energy scheduling strategy proposed in this paper is able to weigh the interests of each subject and increase the overall economic benefits of the system.

Regional differences, source decomposition and formation mechanism of urban digital economy and energy market integration in China

The digital economy (DE) has profoundly transformed social production and life. With its characteristics of high efficiency, high productivity, and low emissions, it plays a significant role in the low-carbon transition of the energy market (EM). This study scientifically evaluates the integration level between urban digital economy and energy market (DEI) using panel data from 281 Chinese cities between 2011 and 2020. The Dagum Gini coefficient, variance decomposition, and QAP methods are employed to analyze the spatiotemporal evolution characteristics and reveal the sources and formation mechanism of integration differences. The findings are as follows: ①The integration level between China's urban digital economy and energy market exhibits an apparent upward trend, but significant differences exist among the four major regions. ②Inter-regional disparities serve as the primary spatial source of the integration differences between China's urban digital economy and energy market. ③The difference in integration efficiency is the primary structural source of the integration differences, with the western and northeastern regions experiencing the greatest impact. ④The four structural-layer factors, namely integration efficiency, integration foundation, integration structure, and integration scale, contribute positively to integration differences, with the effect intensity decreasing in sequence. Accordingly, several policy implications derive. These include implementing targeted measures to address inter-regional disparities and promote balanced integration across different region, efforts to enhance integration efficiency in underperforming regions, and prioritizing investment in infrastructure to enhance the overall integration level. In conclusion, this study provides valuable insights into the integrated development between China's urban DE and EM, offering guidance for countries seeking to optimize DE and EM.

Wired together: Integration and efficiency in European electricity markets

This study investigates the efficiency dynamics of spot and futures electricity markets across a sample of European countries, while taking into account the impact of market couplings. The analysis employs three distinct efficiency measures, namely entropy, Hurst measure, and fractal dimension, to examine the markets of ten different countries. Specifically, entropy is used to gauge the randomness in market prices, while Hurst measure captures the long-term memory of prices, and fractal dimension measures the roughness and irregularity of price series. Our results indicate that these markets display analogous patterns of behavior, with improvements in efficiency observed following the introduction of structural and regulatory changes, such as market couplings. These findings underscore the potential advantages of market liberalization and energy market integration for both consumers and industry players, thus offering important insights for policy makers in this area.

Energy Integration and Regional Development: A Comparative Analysis

This study presents a cross-regional analysis with the aim of understanding the dynamics between energy-integration and regional development. It draws on the premise that cooperative relationship in energy has a positive impact on the regionalization process. For this end, the paper examines renewable energy-based electricity grid interconnectivity in Europe, Southeast Asia and Northeast Asia through a study on their level of energy interconnection, platform sharing, market and policy integration, and institutionalization and formalization. The aim of this study is to illuminate the nexus between energy integration and regional development.
 Keywords: Energy Interconnectivity; Electricity Grid; Regional Development; Europe; Southeast Asia: Northeast Asia

Regional institutions’ contribution to energy market integration in the middle East

The energy market integration in the Middle East is assessed by comparing the acting institutions in the Levant and Persian Gulf sub-regions. Pami Aalto's regional institution's theoretical framework and the case-oriented comparative research method are adopted for this purpose. Changes in the Levant region coincided with the Arab League's establishment. This league did not develop due to inappropriate bi-lateral energy relationships and a lack of effort among the inter-state trade institutions. Regional institutions, lacking order creation, next to the Arab League members' sovereignty disturb gas transmission, transit, and environmental protection regulations. The Arab League has recognized Israel as an energy-producing member and has reduced the political conflicts' intensity to improve Arabic leadership in the Levant integration. The Persian Gulf states' unilateral trade negotiations, sanctions imposed by the US and EU on Iran's energy sector, and political disputes between Iran and some Arab states prevent coherent regional integration, liberalization, and the launch of joint energy projects. In bi-lateral energy diplomacy competition between the regional great energy powers, Iran and Saudi Arabia outside the region is evident. Though the environmental stewardship institution supports green energy, the profit-interest has priority in these regions. The outcome of this article reveals the existence of constraints imposed on energy market integration in these sub-regions.

A Multi-Agent Integrated Energy Trading Strategy Based on Carbon Emission/Green Certificate Equivalence Interaction

To meet the demand for constructing a market mechanism that adapts to the integrated energy system and promotes market-oriented reforms in the energy sector, in-depth research on integrated energy trading strategies is required. This study focused on the integrated energy trading problem and clarify the relationships among participants in the integrated energy market. A regional integrated energy system model was established that enables trading of electricity, gas, heat, and cold, and propose a integrated energy trading strategy based on the carbon emissions/green certificate equivalence interaction. Firstly, the trading process of carbon emissions and green certificates, the underlying representation of green attributes, and market transaction prices are analyzed. Combining with a tiered carbon trading system that includes rewards and penalties, a carbon emissions/green certificate equivalence interaction mechanism is constructed. Secondly, the paper utilized the flexible characteristics of loads within the industrial park to establish a integrated energy demand response model for electricity, heat, and cold. Finally, with the objective of minimizing regional operating costs, a integrated energy trading model considering the carbon emissions/green certificate equivalence interaction mechanism was developed. In the simulation, the operating cost of the system is reduced by 4%, and the carbon emission is reduced by 11.4%, which verifies the effectiveness of the model.

Energy market integration: Harmonizing tariff recourse policies in East Africa

This study uses pattern-matching to analyze the tariff recourse policies employed by East African Community (EAC) countries to cushion the distortionary effects of high tariffs. We describe the various tariff recourse policies adopted across the EAC domestic markets and assess their level of regional harmonization given the different market structures each member state operates. We found a sharp disparity in the tariff recourse policies adopted across the EAC. We recommend that EAC countries prioritize reforms that create linear market liberalization and competition growth as part of an overall strategy for accelerating electricity market integration.

SPECIAL FEATURES OF ENERGY TRANSITION IN ASIAN COUNTRIES

The current stage of development of the world energy industry is taking place in line with the fourth industrial revolution, characterized by the changing ways of life and the introduction of new technologies based on R&D. Environmental pollution has reached a large scale, and as a result it has become necessary to change the structure of modern fuel and energy balance in favor of renewable and non-traditional energy sources. Asian countries vary widely in terms of the level of economic development, making it difficult to create an integrated energy market in Asia. A typology of countries according to the level of economic development was elaborated on the basis of a multi-scale analysis using traditional methods of economic geography. In total these countries rank first in the world in terms of greenhouse gas emissions, accounting for almost 60% of pollutants released into the environment. The fuel and energy balance of Asian countries is characterized by a high proportion of coal, which contributes to the large-scale environment pollution. In accordance with international practice, the countries of the continent adopted energy programs aimed at lesser emissions by reducing the share of coal and switching to low-carbon energy sources. The energy transition can take place primarily in the leading Asian countries that have necessary financial resources. Most Asian countries are at the early stages of industrialization, and the energy transition is almost impossible at this stage because they use energy-intensive industrial technologies. The urgent need to stop climate change comes into conflict with rising energy consumption. Asia has become the world’s leader in energy consumption, as it takes place not only in industry, but also in the utility sector, because 4.2 billion people, or more than 50% of the world’s urban population, live in cities. China has become a leader in the introduction of renewable energy sources, the country has developed and implements new environmental standards that will achieve carbon neutrality by 2060 through the accelerated commissioning of new zero-emission power plants. The rejection of coal could aggravate socio-economic problemsof Asia because of its high share in the fuel and energy balance and the large number of people employed in the industry. In line with the sustainable development goals, the Asian countries try to introduce renewable energy sources based on the local comparative advantages.

A price mechanism design for regional integrated energy market considering carbon emissions

A price mechanism design for regional integrated energy market considering carbon emissions

Electricity Trading in Energy Market Integration: A Theoretical Review

This paper surveys theory and practice on how a larger and integrated energy market can propel electricity trading through economies of scale. We make a systematic presentation of theories and methods used by various scholars to generate knowledge on integrated electricity markets. We discuss paradigms, concepts, and practices emanating from the complex topic of a unified electricity market with an intent to identify gaps. We conclude that electricity trading in EMI has a propensity to drive both economic integration and sustainable energy access; that crafting ways and means for integrating cross-border systems without sacrificing the local economy could make the idea of EMI more palatable to partner countries; and that adoption of ex ante studies that are non-data oriented could improve the design of upcoming regional electricity markets.

Distributed tri-layer risk-averse stochastic game approach for energy trading among multi-energy microgrids

This paper discusses a tri-layer non-cooperative energy trading approach among multiple grid-tied multi-energy microgrids (MEMGs) in the restructured integrated energy market. The heterogeneous uncertainties from renewable energy, market prices, and electric energy loads are also considered via the risk-averse stochastic programming (SP) approach. First, comprehensive operation models of individual MEMGs are presented with the consideration of practical electric energy and thermal network flows as well as battery degradation. Second, to guarantee fair multi-energy trading among MEMGs and deal with adverse effects from all uncertainty sources, a tri-layer Cournot Nash game-based energy bidding method is developed and solved by the SP approach. In the first layer, i.e., day-ahead multi-energy market, optimal energy bids, dispatches of energy storage assets, and thermal flows against uncertainty scenarios are acquired in a risk-averse manner; In the second layer, i.e., intra-day multi-energy market, optimal intra-day energy bids and dispatches of all resources against uncertainty realizations are sequentially calculated; In the third layer, i.e., the real-time multi-energy market, transactions between each MEMG and the wholesale multi-energy market are finalized. Third, for protecting the privacy of individual MEMGs and alleviating the computation burdens, the distributed alternating search procedure is employed to compute the Nash equilibriums in the day-ahead and intra-day markets. In the end, numerical case studies are conducted to verify the effectiveness of our method. From the simulation results, it can be inferred that compared with the traditional cooperative, deterministic and risk-natural methods in the literature, our proposed method is more practical and economical for real-world applications since it comprehensively considers the market competition, uncertainty handling, and energy trading risk.

Scalable method for administration of resource technologies under stochastic procedures

During the development of the S3Unica project (Smart Specialisation University Campus) and its application in the ASSET project (Advanced Systems Studies for Energy Transition), both within the European Commission, the resolution of the distributed energy generation model was proposed through the creation of an algorithm that would allow the shared market between producers and consumers. From this premise arose the need to create a replicable system to resolve this situation in the new shared generation environment, using low-cost technologies. This work develops the scalable method for resource management technologies (SMART), based on stochastic procedures, which generates microgrids with an integrated energy market. The interest of this work is based on the incorporation of real-time analysis, applying stochastic methods, and its fusion with probabilistic predictive methods that evolve and harmonise the results. The fact that the process is self-learning also enables the use of metadomotic as a tool for both comfort improvement and energy sharing. The most important results developed were the design of the internal scheme of the low-cost SMART control device together with the developments of both individual and collective resolution algorithms. By achieving the incorporation of internal and external producers in the same numerical procedure, the distributed and hybrid generation models are solved simultaneously.

Energy market integration and renewable energy development: Evidence from the European Union countries.

Based on the panel data of 20 countries in EU during the period of 2007-2019, this paper study the effect of energy market integration (EMI) on renewable energy development (RED). We develop a general equilibrium model to explain how EMI affect the RED and the role of different mechanisms. The empirical results reports that the European EMI increased both the consumption and power generation of renewable energy, which proves a significant positive effect of EMI on the RED. In line with our expectations of theoretical model, our estimates show that the increase of renewable energy consumption is mainly due to the fossil energy cost increased, technology advancement and regional environmental regulation strengthening. And the fossil energy cost is the main driven force which plays a completely mediating role between EMI and RED. Furthermore, we also observe a negative effect of FDI and industry structure on RED.

Research on the user comprehensive energy consumption decision-making method based on the evolutionary game

With the increasing diversification of human energy consumption forms in the integrated energy market, analyzing the comprehensive energy consumption behavior of user groups according to their changing energy demand characteristics is an important issue to be urgently addressed. To solve this problem, an analysis method of user’s comprehensive energy consumption behavior based on the evolutionary game is proposed in this article. First, three types of users including residents, large industries, and commercial users are considered for this purpose. Then, a utility model which takes into account the energy consumption characteristics of these users and their comfort factors is constructed based on the subjective and objective combination weighting method. Thereafter, an evolutionary game theory is used to analyze the dynamic selection process for users by selecting energy suppliers and then using the selection results when the evolutionary equilibrium is reached. Finally, the model is solved by using a distributed iterative method. The correctness and validity of the proposed method are verified by the simulation results.

European energy politics after Ukraine: The road ahead

By invading Ukraine and weaponizing its gas supplies to Europe, Russia has made natural gas what renewable energy used to be: unreliable and expensive. In this perspective, we use the paradigm shift concept developed by Florian Kern et al. to unpack the possible implications of the war for the European energy politics. We argue that the war and the uncertainty around natural gas it has produced will play a major role in the future development of the European energy transition. Reducing energy vulnerability and faster decarbonization will be pursued as the main policy goals, probably at the expense of the further development of the EU integrated energy market under its current design. We may also see more Europe and more state in the energy affairs as solutions to the crisis require levels of coordination and resource mobilization that individual member states or private actors cannot provide. We conclude that the EU has the resources, knowledge base, and determination to turn the crisis into an opportunity. If uncoordinated or mismanaged, however, the European response might make the matters even worse, triggering a political crisis and eventually also a crisis of legitimacy.

A Moving Target: Changing Priorities in the Energy Policy of the European Union

The EU’s strategic objective is to improve energy market integration while emphasising the goal of energy sustainability. This study summarises the progress made over the last six decades, particularly focusing on the latest steps, and outlines the present and future challenges of the European energy policy. In doing so, the study addresses the following research questions: Will the EU realise its original aspirations in the field of energy? Is the Energy Union on target to deliver the envisioned breakthrough for the EU? Are the benefits of the Energy Union tangible at the integrated EU level? What new conditions and expectations shape and influence the future of the Energy Union?

Introduction to the Special Issue on “Energy Market Transition, Financialization and Integration”

Due to difficulties in accessing detailed energy modelling and usage data that are required to estimate energy needs that are responsive to local circumstances, we propose an equivalence scale approach to the determination of required energy consumption. Our method requires the estimation of energy equivalence scales that are used to rescale reference household energy consumption and, thus, yield household-specific energy requirements. We apply the method using readily available income and expenditure data, finding that estimated required energy is well above actual energy expenditure for low- and middle-income households, which is consistent with an expectation that basic energy needs for poor households may not be met. The proposed approach is general enough to incorporate other features that might be deemed relevant and available in other settings, and, therefore, can be used to examine the affordability component of SDG 7, undertake energy poverty analysis or design appropriate policies.

A choice experiment for testing the energy-efficiency mortgage as a tool for promoting sustainable finance

The challenges currently facing the EU in the energy sector include increasing import dependence, limited diversification, high and volatile energy prices, decarbonization, and slow progress in energy efficiency. EU energy policy has provided a wide range of measures to achieve an integrated energy market and sustainability of the building sector. Various incentives and financial instruments have been promoted and financed by governments to help consumers in energy retrofit processes. These include direct investments and fiscal, financial, and market instruments. Public measures have been widely studied but private initiatives have not. In this study, the energy-efficiency mortgage (EEM) is investigated as a credit scheme to attract young people to a real estate market for sustainable buildings, characterized by high sale prices. A choice experiment (CE) was modelled to investigate the preferences of potential young buyers of a new home. The results of this exploratory survey showed an appreciation of the purchase of new A-rated properties according to the Energy Performance Certificate, compared to those that need to be retrofitted or not retrofitted. Consumers like the option of a home energy efficiency renovation being fully managed by a third party (i.e., following the one-stop shop model). The key appeal of energy efficiency for consumers ranges from its ability to support better energy management, to better property value management. The EEM seems to be a promising tool to stimulate investments in energy efficiency and to promote the accessibility and affordability of housing in the sustainable housing market. The results of this study can help private financial institutions to propose appropriate credit plans, which limit the risk of default by the borrower. They can also help public incentive policymakers to propose complementary instruments to EEM.

Integration of European Electricity Balancing Markets

Achieving a fully integrated energy market under the EU electricity target model constitutes an ongoing process. Given that the integration of spot markets is already at a mature stage, the next step forward is the successful integration of the balancing markets across European control areas. An analytical review of all the aspects governing the European balancing market integration is presented in this paper, providing a detailed description on the European regulatory framework on this topic. In addition, the design variables that need to be harmonized among national balancing markets as well as the available balancing market arrangements for the exchange of cross-border balancing services are presented. Numerical examples of the essence of the balancing market integration are provided, and the implementation projects initiated by European transmission system operators (TSOs) towards this direction are described. The review concludes that balancing market integration may indeed lead to a significant reduction in the balancing costs for the participating control areas, but further effort is still required to move from a regional level to a European-wide real-time balancing market, so that the whole potential of such a new landscape is revealed to the benefit of end-consumers.

ASEAN Energy Market Integration and Indonesia's Policy to Address Energy Poverty: Convergence or Divergence?

Access to modern energy among Association of Southeast Asian Nations (ASEAN) member countries has not been evenly distributed and some member countries are still in a status of energy poverty. Therefore, ASEAN has initiated the integration of energy markets. Indonesia is one of the ASEAN countries that still needs to overcome the problem of inequality in access to energy, especially in remote, isolated, underdeveloped, rural and border areas. ASEAN Energy Market Integration (AEMI) is based on the logic that integration of energy markets would allow national governments to address energy policy challenges more effectively and efficiently than they are able to do on their own; it therefore emphasizes interconnectivity through trade and energy investment. This study analyzed the linkage between the points of agreement in AEMI and the implementation of Indonesian policies in the context of harmonization of regulations, development of energy infrastructure, and subsidy policies. Using qualitative research methods, this study sought to rationalize whether the linkage between AEMI and Indonesian policies was convergent or divergent. This study concluded that there was a convergence between the AEMI agreement and the implementation of policies in Indonesia to address energy poverty.
 Keywords: AEMI, energy poverty, Indonesia, policy, electrification, new and renewable energy