Additional revenues estimation in a market-based redispatch: An opportunity for flexibility
The technical constraints in the transmission networks are exerting significant strain on the functioning of electricity markets as the share of variable renewable energy sources is increasing. To manage this issue, the transition to a nodal pricing market has been proposed in the literature. Given...
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| Format: | Article |
| Language: | English |
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Elsevier
2024-10-01
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| Series: | Energy Conversion and Management: X |
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| Online Access: | http://www.sciencedirect.com/science/article/pii/S259017452400223X |
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| author | Erick Andrés Dorado Galatoire Ángel Arcos-Vargas José Luis Martínez Ramos |
| author_facet | Erick Andrés Dorado Galatoire Ángel Arcos-Vargas José Luis Martínez Ramos |
| author_sort | Erick Andrés Dorado Galatoire |
| collection | DOAJ |
| description | The technical constraints in the transmission networks are exerting significant strain on the functioning of electricity markets as the share of variable renewable energy sources is increasing. To manage this issue, the transition to a nodal pricing market has been proposed in the literature. Given that the current structure of the European Union electricity market corresponds to a zonal pricing, the transition to nodal pricing would imply fundamental changes in its market structure. In order to avoid the latter, this study develops a method to identify locational price signals in a decentralized market with zonal pricing and subsequent market-based redispatch. To this end, first, nodes with structural technical constraints are identified –using energy programmes–. Then, the additional revenues of physical units located at these nodes are estimated –using electricity prices–. Finally, this strategic information will guide the development of flexibility solutions –manageable generation capacity and demand response– in these geographic locations, mimicking the main advantage of nodal pricing. Our methodology has been empirically tested on the Spanish power system, using hourly data from the System Operator and Market Operator for four full years, from 2019 to 2022. The results show a higher and constant economic revenue in certain nodes of this system –upward redispatch price is 74.90% higher than day-ahead market price–. Thus, this method can be used by market participants to evaluate publicly available data from a decentralized market with zonal pricing and subsequent market-based redispatch, and obtain essential information to make the best investment decisions. |
| format | Article |
| id | doaj-art-46b3098352f6448eb46f66d12f7d4ac1 |
| institution | OA Journals |
| issn | 2590-1745 |
| language | English |
| publishDate | 2024-10-01 |
| publisher | Elsevier |
| record_format | Article |
| series | Energy Conversion and Management: X |
| spelling | doaj-art-46b3098352f6448eb46f66d12f7d4ac12025-08-20T02:37:03ZengElsevierEnergy Conversion and Management: X2590-17452024-10-012410074510.1016/j.ecmx.2024.100745Additional revenues estimation in a market-based redispatch: An opportunity for flexibilityErick Andrés Dorado Galatoire0Ángel Arcos-Vargas1José Luis Martínez Ramos2Department of Electrical Engineering, School of Engineering, University of Seville, Seville 41092, Spain; Corresponding author.Department of Industrial Organization and Business Management I, School of Engineering, University of Seville, Seville 41092, SpainDepartment of Electrical Engineering, School of Engineering, University of Seville, Seville 41092, SpainThe technical constraints in the transmission networks are exerting significant strain on the functioning of electricity markets as the share of variable renewable energy sources is increasing. To manage this issue, the transition to a nodal pricing market has been proposed in the literature. Given that the current structure of the European Union electricity market corresponds to a zonal pricing, the transition to nodal pricing would imply fundamental changes in its market structure. In order to avoid the latter, this study develops a method to identify locational price signals in a decentralized market with zonal pricing and subsequent market-based redispatch. To this end, first, nodes with structural technical constraints are identified –using energy programmes–. Then, the additional revenues of physical units located at these nodes are estimated –using electricity prices–. Finally, this strategic information will guide the development of flexibility solutions –manageable generation capacity and demand response– in these geographic locations, mimicking the main advantage of nodal pricing. Our methodology has been empirically tested on the Spanish power system, using hourly data from the System Operator and Market Operator for four full years, from 2019 to 2022. The results show a higher and constant economic revenue in certain nodes of this system –upward redispatch price is 74.90% higher than day-ahead market price–. Thus, this method can be used by market participants to evaluate publicly available data from a decentralized market with zonal pricing and subsequent market-based redispatch, and obtain essential information to make the best investment decisions.http://www.sciencedirect.com/science/article/pii/S259017452400223XWholesale electricity marketDay-ahead marketMarket-based redispatchTechnical constraintsFlexible resources |
| spellingShingle | Erick Andrés Dorado Galatoire Ángel Arcos-Vargas José Luis Martínez Ramos Additional revenues estimation in a market-based redispatch: An opportunity for flexibility Energy Conversion and Management: X Wholesale electricity market Day-ahead market Market-based redispatch Technical constraints Flexible resources |
| title | Additional revenues estimation in a market-based redispatch: An opportunity for flexibility |
| title_full | Additional revenues estimation in a market-based redispatch: An opportunity for flexibility |
| title_fullStr | Additional revenues estimation in a market-based redispatch: An opportunity for flexibility |
| title_full_unstemmed | Additional revenues estimation in a market-based redispatch: An opportunity for flexibility |
| title_short | Additional revenues estimation in a market-based redispatch: An opportunity for flexibility |
| title_sort | additional revenues estimation in a market based redispatch an opportunity for flexibility |
| topic | Wholesale electricity market Day-ahead market Market-based redispatch Technical constraints Flexible resources |
| url | http://www.sciencedirect.com/science/article/pii/S259017452400223X |
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