Electricity Market Prices Research Articles

Community Battery for Collective Self-Consumption and Energy Arbitrage: Independence Growth vs. Investment Cost-Effectiveness

Integrating a grid-connected battery into a renewable energy community amplifies the collective self-consumption of photovoltaic energy and facilitates energy arbitrage in the electricity markets. However, how much can energy independence really increase? Is it a cost-effective investment? The answer to these questions represents a novelty in the literature due to the innovative nature of the asset under consideration and the market and regulatory framework in which it is evaluated. Employing a net present value assessment, our analysis incorporated aging effects and conducts sensitivity analyses across various parameters: the number of community customers, electricity market prices, battery cost and size, and the decision to engage in energy arbitrage. Each scenario underwent a 20-year hourly simulation using an aging-aware rolling-horizon 24 h-looking-ahead scheduling, optimized with mixed-integer linear programming. Simulations conducted on the Italian market indicate that dedicating a battery solely to collective self-consumption is the most efficient solution for promoting a community’s energy independence, but it lacks economic appeal. However, integrating energy arbitrage, despite slight compromises in self-sufficiency and battery longevity, halves the payback period and enhances the attractiveness of larger battery investments. The net present value is contingent upon the battery size, customer number, and market prices. Nevertheless, if the battery cost does not exceed 200 EUR/kWh, the investment becomes cost-effective across all scenarios.

Analyzing the influence of web search behavior on electricity market price: a case study of Japan electric power exchange

The Japan Electric Power Exchange (JEPX) has introduced a feed-in premium to promote the trading of renewable energy electricity in the market; thus, the exchange has become increasingly important for RE companies to maintain profitability in market trading. However, electricity prices are not only affected by directly measurable factors such as electricity demand, fuel prices, and weather but also by corporate bidding strategies, social conditions, and other human behaviors, making it difficult to predict electricity prices. Given that electricity demand is related to human behavior, this study focuses on web search behavior and clarifies the relationship between keyword search volumes and electricity market prices in Japan. Correlation and vector autoregression analyses results show a moderately strong positive correlation between the logarithmic difference of the keyword search volume and that of the electricity price. In addition, we find that the logarithmic difference of the electricity price tends to increase when that of the keyword search volume on the previous day increases. These results suggest that search volumes of specific keywords can be effective explanatory variables for area price prediction models and can help identify signs of price spikes.

Risk-constrained bidding and offering strategy for sector-coupled electricity-hydrogen systems incorporating accessibility level of mobility sector

To enhance the economic viability of integrated energy systems, it is important to balance risk and reward while ensuring operational flexibility and compliance with regulatory constraints. Developing an integrated risk measurement method for energy trading in energy markets that complies with regulatory constraints adds another layer of complexity, especially when dealing with large-scale heterogeneous energy systems, such as those dominated by green hydrogen. Ensuring adherence to market regulations, grid codes, and flexible requirements requires a thorough understanding of legal frameworks and policy considerations, as well as integrating regulatory constraints into the bidding/offering strategies. To address these challenges and enable the profitable development of integrated electricity-hydrogen energy systems (IEHSs), this paper develops a risk-constrained bidding/offering self-scheduling strategy for IEHSs that allows for simultaneous trading in day-ahead energy and reserve electricity markets. The developed self-scheduling strategy regulates hydrogen and power flow in a centralized manner, taking into account the operational limits of the power sector, hydrogen fueling stations (HFSs), electric vehicle parking lots, fuel cell vehicle parking lots, and renewable energy sources. As a salient feature, the important human-related factors in the mobility sector are included in the proposed strategy to motivate private owners to collaborate with IEHSs and to accommodate the charging demand of vehicles with electricity market signals. To obtain the robust day-ahead schedule, economic risks associated with renewable power generation, calls for reserve deployment, and electricity market prices are taken into consideration. Towards this end, a stochastic adaptive robust optimization approach is proposed to control the risk of profit variability, which is solved by a nested column-and-constraint generation algorithm. The effectiveness and feasibility of the proposed strategy are verified using the modified IEEE 14-bus test system, as a standard scale of local IEHSs. The numerical results highlight the synergies impact between HFSs and the power sector, resulting in an increase in the profit of the IEHS from $101.654k to $275.078k. Furthermore, the IEHS can improve its profit margin and competitiveness by employing the tri-level stochastic adaptive robust optimization approach. This approach ensures that the IEHS is resistant to sudden changes in real-time interactions, even with an 8.14% increase in the imbalance cost.

Electricity market price forecasting using ELM and Bootstrap analysis: A case study of the German and Finnish Day-Ahead markets

Electricity market liberalization and the absence of cost-efficient energy storage technologies have led to the transformation of state-owned electricity companies into complex electricity market entities, each having a different time horizon. Deregulation has intensified competition, giving rise to increased uncertainty caused by a multitude of interrelated exogenous factors, resulting in unexpected fluctuations in electricity prices. As a consequence, market participants encounter elevated risks and seek effective mitigation strategies. In this paper, the challenges described in the literature are addressed by studying price distribution histograms in the German and Finnish electricity markets. The objective is to identify normal price intervals that can serve as a foundation for an integrated Day-Ahead price forecasting methodology. A novel approach utilizing the Extreme Learning Machine in combination with Bootstrap intervals is proposed and applied to both markets. The findings demonstrate that Bootstrap intervals effectively capture normal prices, whereas extremely high prices typically align with the upper limits of Bootstrap intervals. Conversely, negative prices tend to fall outside the lower boundaries of the intervals. In order to assess the performance of the proposed methodology, a comparative analysis of its forecasting accuracy against the well-established Generalized AutoRegressive Conditional Heteroskedasticity and AutoRegressive Fractionally Integrated Moving Average models is conducted. In addition, both the computational efficiency and forecasting accuracy of the Extreme Learning Machine in comparison to the Artificial Neural Network are assessed. The results reveal the superior efficiency of the Extreme Learning Machine. The developed forecasting model could potentially assist market participants in making well-informed decisions and executing optimal bidding strategies in response to various scenarios before the Day-Ahead market closes. Notably, the proposed methodology transcends the limitations of fixed price thresholds and effectively addresses market nuances, including the occurrence of negative prices, thus offering a more comprehensive approach for electricity price forecasting.

A multi-agent-based microgrid day-ahead optimal operation framework with liquid air energy storage by hybrid IGDT-STA

Liquid air energy storage (LAES) is a promising energy storage technology for net-zero transition. Regarding microgrids that utilize LAES, the price of electricity in the market can create significant uncertainty within the system. To address this issue, the information gap decision theory (IGDT) method has proven to be an effective tool for resolving uncertainties in system operation. The IGDT method is a decision-making tool designed to tackle uncertainty, which can significantly enhance decision-making abilities in situations where information is scarce. Additionally, the state transition algorithm (STA) is a highly intelligent optimization algorithm that leverages structural learning. This study proposed a novel IGDT-STA hybrid method to solve the optimal operation of a microgrid with LAES while considering the uncertainty of market electricity prices. The IGDT-STA offers two distinct strategies for decision-makers who are either risk-averse or risk-taking. These strategies are subsequently optimized by the STA method. In addition, the IGDT-STA is implemented within a multi-agent framework to enhance system flexibility. Through a case study, it was found that the IGDT-STA employed good performance compared with the IGDT-genetic algorithm, stochastic method, and Monte Carlo method.

A power dispatch allocation strategy to produce green hydrogen in a grid-integrated offshore hybrid energy system

A dedicated grid-tied offshore hybrid energy system for hydrogen production is a promising solution to unlock the full benefit of offshore wind and solar energy and realize decarbonization and sustainable energy security targets in electricity and other sectors. Current knowledge of these offshore hybrid systems is limited, particularly in the integration, component control, and allocation aspects. Therefore, a grid-integrated analytical model with a power dispatch allocation strategy between the grid and electrolyzer for the co-production of hydrogen from the offshore hybrid energy system is developed in this paper. While producing hydrogen, the proposed offshore hybrid energy system supplies a percentage of its capacity to the onshore grid facility, and the amount of the electricity is quantified based on the electricity market price and available total offshore generation. The detailed controls of each component are discussed. A case study considers a hypothetical hybrid offshore energy system of 10 MW situated in a potential offshore off the NSW of Australia based on realistic metrological data. A grid-scale proton-exchange membrane electrolyzer stack is used and a model predictive power controller is implemented on the distributed hydrogen generation scheme. The model is helpful for the assessment or optimization of both the economics and feasibility of the dedicated offshore hybrid energy farm for hydrogen production systems.

Electricity price forecasting using quantile regression averaging with nonconvex regularization

AbstractElectricity price forecasting (EPF) is an emergent research domain that focuses on forecasting the future electricity market price both deterministically and probabilistically. EPF has attracted enormous interest from both practitioners and scholars since the deregulation of the power market and wide applications of renewable energy sources, such as wind and solar energy. However, forecasting the electricity price accurately and efficiently is an extremely challenging task because of its high volatility, randomness, and fluctuation. Although quantile regression averaging (QRA) has been demonstrated to be efficacious in probabilistic EPF since the global energy forecasting competition in 2014 (GEFCom2014), it is sensitive to nuisance variables especially when the number of variables is large. The forecasting accuracy will be negatively affected by these nuisance variables. To address these challenges, this study investigates a nonconvex regularized QRA in probabilistic forecasting. Two types of nonconvex regularized QRA select the important inputs obtained from point forecasting to obtain more accurate forecasting outcomes. To demonstrate the effectiveness of the proposed EPF model, two real datasets from the European power market are considered.

Optimal power flow of power system with Thyristor Controlled Series Compensation using moth flame optimization with locational marginal price

Consideration of transmission line capacity and the optimal power flow (OPF) determines the locational marginal price (LMP), which in turn determines the performance and profitability of a producing unit. Reducing the total cost of the generators can lead to a drop in the market price of electricity. It is recommended to use numerical and repetition-based approaches for solving power flow equations due to their nonlinear nature. In order to achieve the ideal power flow at an affordable price, this paper employs a Moth Flame Optimization (MFO) to solve the equations. We then enhance the MFO's structure to make it more effective at performing the simultaneous calculations of power passing through transmission lines. One FACTS tool that has been utilized to overcome this problem is the Thyristor Controlled Series Compensation (TCSC). Lastly, the proposed MFO algorithm would include the following parameters in its output: bus voltages, line losses, produced power, total generating expenditures, and generator profits. Testing the proposed method on the IEEE 57-BUS network also shows that it improves upon the OPF problem.

Role of Renewables in Energy Storage Economic Viability in the Western Balkans

Given the growing shares of renewable energy sources in the grids, the interest in energy storage systems has increased. The role of pumped hydro energy storage systems as flexible solutions for managing peak and off-peak prices from nuclear and fossil power plants in previous systems is now revitalized in the liberalized systems, with a volatile generation of wind and solar energy. Thus, understanding of the patterns behind the economics of energy storage is crucial for the further integration of energy storage in the grids. In this paper, the factors that impact the economic viability of energy storage in electricity markets are analyzed. The method of approach used in this study considers the electricity market price distribution, full load hours, the total costs of energy storage, and linear regression analysis. Using revenues from arbitraging a 10-megawatt (MW) pumped hydro storage system in the Western Balkans, resulting from the electricity market price distribution and the analysis of the total costs of storage, an econometric model is created. This model shows the impacting factors of energy storage development in the context of the rising renewables sector. Research shows that the previous hypothesis about the integration of energy storage systems in proportion to the increase in shares of renewables in the grids is incorrect. There is a significant correlation between energy storage revenues, the dependent variable, and the independent variables of hydro, wind, and solar generation. The conducted analysis indicates the future arbitraging opportunities of pumped hydro energy storage systems and provides useful insights for energy storage investors and policymakers. During the transitional period, until the deployment of renewables changes the effects of fossil power plants, energy storage price arbitrage is profitable and desirable for 500, 1000, and 2000 full load hours in the Western Balkan region. Despite the need for flexibility, with more renewables in the grids, large-scale energy storage systems will not be economically viable in the long run because of “revenue cannibalization”.

An empirical analysis of the relationship among price, demand and CO2 emissions in the Spanish electricity market

CO2 emissions play a crucial role in international politics. Countries enter into agreements to reduce the amount of pollution emitted into the atmosphere. Energy generation is one of the main contributors to pollution and is generally considered the main cause of climate change. Despite the interest in reducing CO2 emissions, few studies have focused on investigating energy pricing technologies. This article analyzes the technologies used to meet the demand for electricity from 2016 to 2021. The analysis is based on data provided by the Spanish Electricity System regulator, using statistical and clustering techniques. The objective is to establish the relationship between the level of pollution of electricity generation technologies and the hourly price and demand. Overall, the results suggest that there are two distinct periods with respect to the technologies used in the studied years, with a trend toward the use of cleaner technologies and a decrease in power generation using fossil fuels. It is also surprising that in the years 2016 to 2018, the most polluting technologies offered the cheapest prices.

Optimization strategy of power purchase and sale for electricity retailers in a two-tier market

Against the backdrop of the gradual advancement of China's electricity market reform, the number of Power Trading Companies in China has been increasing year by year, and as of October 2022, the number has reached more than 10,000. As an important hub connecting the electricity market and users, electricity retailers face double risks from downstream user load fluctuations and electricity market price fluctuations. Therefore, a reasonable power purchase and sale strategy is very important for an electricity retailer. In this study, a block bidding mechanism is adopted to optimize the clearing of the medium-to long-term market and a DA-RBF neural network is established for spot electricity price forecasting model based on numerical feature similarity to improve the accuracy of electricity price forecasting. Furthermore, the model considers the differences in user demand responses and investigates the optimal power purchase and sale strategy, guided by differentiated time-of-use electricity pricing. The case study analysis demonstrated that the proposed power purchase and sale optimization strategy yields favorable results, improving profitability and enhancing the stability of the power system.

Research on energy purchase combination strategies for multiple energy commercial buildings considering multistage market uncertainties

With the gradual development of the power markets, various types of uncertainty are gradually increasing. The overlapping effects of various uncertainties have a significant impact on the operational economy of multiple energy commercial buildings (MECB) relying on various energy sources. MECB can purchase electricity from multiple stages of the market, such as spot from medium to long term and the market electricity price risk varies at different stages. Therefore, this paper investigates the energy purchasing strategies of MECB in multistage markets, taking into account various uncertainties. Considering the actual operational characteristics of MECB, this paper proposes a MECB low-carbon economic optimization model and establishes an energy purchase strategy model for MECB under various risk scenarios based on random optimization theory. Research has found that in scenarios with higher risks, MECB will participate more conservatively in the market. By simultaneously participating in the medium to long-term market and spot market, MECB can effectively avoid the cost risks brought about by various uncertainties.

A Machine Learning-Based Electricity Consumption Forecast and Management System for Renewable Energy Communities

The energy sector is currently undergoing a significant shift, driven by the growing integration of renewable energy sources and the decentralization of electricity markets, which are now extending into local communities. This transformation highlights the pivotal role of prosumers within these markets, and as a result, the concept of Renewable Energy Communities is gaining traction, empowering their members to curtail reliance on non-renewable energy sources by facilitating local energy generation, storage, and exchange. Also in a community, management efficiency depends on being able to predict future consumption to make decisions regarding the purchase, sale and storage of electricity, which is why forecasting the consumption of community members is extremely important. This study presents an innovative approach to manage community energy balance, relying on Machine Learning (ML) techniques, namely eXtreme Gradient Boosting (XGBoost), to forecast electricity consumption. Subsequently, a decision algorithm is employed for energy trading with the public grid, based on solar production and energy consumption forecasts, storage levels and market electricity prices. The outcomes of the simulated model demonstrate the efficacy of incorporating these techniques, since the system showcases the potential to reduce both the community electricity expenses and its dependence on energy from the centralized distribution grid. ML-based techniques allowed better results specially for bi-hourly tariffs and high storage capacity scenarios with community bill reductions of 9.8%, 2.8% and 5.4% for high, low, and average photovoltaic (PV) generation levels, respectively.

Implementation of an Optimal Energy Management within Islanded Microgrid

This paper proposes an optimal Energy Management System (EMS) based on Mixed Integer Linear Programming (MILP) optimization technique for an islanded Microgrid (MG). A local energy market (LEM) platform is employed which attempts to obtain the best electricity market price and to maximize the utilization of existing distributed energy resources. Besides, a single side auction market structure is used for the LEM which takes the offer prices from all microsources to calculate market clearing price. Simulation and experimental results from the proposed method over a real MG are compared with those from a Modified Conventional EMS (MCEMS). The proposed algorithm is flexible, extendable and too fast to be utilized for different MG structures with various capacities. The results demonstrate the effectiveness of the proposed method to solve the optimal operation problem in an isolated MG with 25% reduction in the cost of operation.

Research on a price prediction model for a multi-layer spot electricity market based on an intelligent learning algorithm

With the continuous promotion of the unified electricity spot market in the southern region, the formation mechanism of spot market price and its forecast will become one of the core elements for the healthy development of the market. Effective spot market price prediction, on one hand, can respond to the spot power market supply and demand relationship; on the other hand, market players can develop reasonable trading strategies based on the results of the power market price prediction. The methods adopted in this paper include: Analyzing the principle and mechanism of spot market price formation. Identifying relevant factors for electricity price prediction in the spot market. Utilizing a clustering model and Spearman’s correlation to classify diverse information on electricity prices and extracting data that aligns with the demand for electricity price prediction. Leveraging complementary ensemble empirical mode decomposition with adaptive noise (CEEMDAN) to disassemble the electricity price curve, forming a multilevel electricity price sequence. Using an XGT model to match information across different levels of the electricity price sequence. Employing the ocean trapping algorithm-optimized Bidirectional Long Short-Term Memory (MPA-CNN-BiLSTM) to forecast spot market electricity prices. Through a comparative analysis of different models, this study validates the effectiveness of the proposed MPA-CNN-BiLSTM model. The model provides valuable insights for market players, aiding in the formulation of reasonable strategies based on the market's supply and demand dynamics. The findings underscore the importance of accurate spot market price prediction in navigating the complexities of the electricity market. This research contributes to the discourse on intelligent forecasting models in electricity markets, supporting the sustainable development of the unified spot market in the southern region.

Predicting Day-Ahead Electricity Market Prices through the Integration of Macroeconomic Factors and Machine Learning Techniques

Several events in the last years changed to some extent the common understanding of the electricity day-ahead market (DAM). The shape of the electricity price curve has been altered as some factors that underpinned the electricity price forecast (EPF) lost their importance and new influential factors emerged. In this paper, we aim to showcase the changes in EPF, understand the effects of uncertainties and propose a forecasting method using machine learning (ML) algorithms to cope with random events such as COVID-19 pandemic and the conflict in Black Sea region. By adjusting the training period according to the standard deviation that reflects the price volatility, feature engineering and by using two regressors for weighing the results, significant improvements in the performance of the EPF are achieved. One of the contributions of the proposed method consists in adjusting the training period considering the price variation. Thus, we introduce a rule-based approach given an empirical observation that for days with a higher growth in prices the training interval should be shortened, capturing the sharp variations of prices. The results of several cutting-edge ML algorithms represent the input for a predictive meta-model to obtain the best forecasting solution. The input dataset spans from Jan. 2019 to Aug. 2022, testing the proposed EPF method for both stable and more tumultuous intervals and proving its robustness. This analysis provides decision makers with an understanding of the price trends and suggests measures to combat spikes. Numerical findings indicate that on average mean absolute error (MAE) improved by 48% and root mean squared error (RMSE) improved by 44% compared to the baseline model (without feature engineering/adjusting training). When the output of the ML algorithms is weighted using the proposed meta-model, MAE further improved by 2.3% in 2020 and 5.14% in 2022. Less errors are recorded in stable years like 2019 and 2020 (MAE = 6.71, RMSE = 14.67) compared to 2021 and 2022 (MAE = 9.45, RMSE = 20.64).

An effective strategy for unit commitment of microgrid power systems integrated with renewable energy sources including effects of battery degradation and uncertainties.

The large use of renewable sources and plug-in electric vehicles (PEVs) would play a critical part in achieving a low-carbon energy source and reducing greenhouse gas emissions, which are the primary cause of global warming. On the other hand, predicting the instability and intermittent nature of wind and solar power output poses significant challenges. To reduce the unpredictable and random nature of renewable microgrids (MGs) and additional unreliable energy sources, a battery energy storage system (BESS) is connected to an MG system. The uncoordinated charging of PEVs offers further hurdles to the unit commitment (UC) required in contemporary MG management. The UC problem is an exceptionally difficult optimization problem due to the mixed-integer structure, large scale, and nonlinearity. It is further complicated by the multiple uncertainties associated with renewable sources, PEV charging and discharging, and electricity market pricing, in addition to the BESS degradation factor. Therefore, in this study, a new variant of mixed-integer particle swarm optimizer is introduced as a reliable optimization framework to handle the UC problem. This study considerssix various case studies of UC problems, including uncertainties and battery degradation to validate the reliability and robustness of the proposed algorithm. Out of which, two case studies defined as a multiobjective problem, and it has been transformed into a single-objective model using different weight factors. The simulation findings demonstrate that the proposed approach and improved methodology for the UC problem are effectivethan itspeers. Based on the average results, the economic consequences of numerous scenarios are thoroughly examined and contrasted, and some significant conclusions are presented.

Regulatory incentives for transmission system operators under flow-based market coupling

Flow-based market coupling is a critical element of the electricity market in Europe. Transmission System Operators determine the commercial transmission capacity that can be implicitly traded in a zonal day-ahead market. However, this entails a trade-off: higher commercial transmission capacities increase market efficiency, affecting the electricity market prices, but also increase redispatch costs, affecting the network tariff. The decision on the commercial transmission capacity should optimally balance day-ahead welfare and redispatch costs, but depends on the rules and regulated incentives enforced on the TSOs. A MinRAM criterion, i.e., imposing minima for the commercial transmission capacity, is a one-size-fits-all policy without variation in time and space that unlikely leads to optimal transmission capacity allocation and is hard to tune because regulators have incomplete information. Incentive regulation is an alternative policy instrument promoting welfare-maximizing commercial transmission capacities, robust against information asymmetry. We provide a set of mathematical conditions to properly design an incentive scheme that rewards price convergence and penalizes excessive redispatch costs. Therefore, this paper serves as a stepping stone towards tapping the full potential of cross-border trade in zonal markets for policymakers, regulators, TSOs and market participants.

A probabilistic forecast methodology for volatile electricity prices in the Australian National Electricity Market

The South Australia region of the Australian National Electricity Market (NEM) displays some of the highest levels of price volatility observed in modern electricity markets. This paper outlines an approach to probabilistic forecasting under these extreme conditions, including spike filtration and several post-processing steps. We propose using quantile regression as an ensemble tool for probabilistic forecasting, with our combined forecasts achieving superior results compared to all constituent models. Within our ensemble framework, we demonstrate that averaging models with varying training-length periods leads to a more adaptive model and increased prediction accuracy. The applicability of the final model is evaluated by comparing our median forecasts with the point forecasts available from the Australian NEM operator, with our model outperforming these NEM forecasts by a significant margin.

A generation and transmission expansion planning model for the electricity market with decarbonization policies

Globally, the power sector must undergo a profound transition to achieve the decarbonization development targets. Various roadmaps are implemented, but only from a macro perspective, lacking the consideration of the electricity market rules. In this paper, we develop and present a market-driven generation and transmission expansion planning (MGTEP) model considering the effectiveness of the electricity market. Specifically, generation and transmission companies incorporate hourly market trading and annual capacity investment into strategic decisions to maximize their profits, with the supply function equilibrium model to analyze bidding behaviors. An equivalent quadratic programming formulation is deployed to solve the trilevel MGTEP model. Meanwhile, the MGTEP model is coupled with decarbonization policies to support the state and federal government in assessing energy transition strategies. We implement the MGTEP model with carbon emission allowance and carbon tax policies for the southern China electricity market to achieve carbon peaking by 2030. Carbon emission allowance adopts an intensity-based cap based on generation companies' historical output. The case study results show that 50 % carbon emission allowance or 400 CNY/t carbon tax is required but with several drawbacks, including unsatisfactory decarbonization effect, excessive economic sacrifice, etc. Finally, the case study is extended to dual-track policies with different combinations of policies. An optimal combination is 70 % carbon emission allowance and 160 CNY/t carbon tax. In this case, the power sector's carbon dioxide emissions and electricity prices in the southern China electricity market would increase to 554.6 Mt and 864.34 CNY/MWh in 2030, respectively, along with a carbon price of 850 CNY/t.