Agent-Based Simulation of Interrelated Wholesale Electricity Markets
07 Sep 2014-pp 103-108
TL;DR: A detailed agent-based simulation model is presented that is able to simulate wholesale electricity markets including relevant interrelations with respect to time and point of delivery of electrical energy.
Abstract: In recent years, the increasing electricity generation from fluctuating renewable energy sources has created quite different challenges faced by operators of conventional power plants in the short and long run. In the dynamic and complex environment of electricity markets, model-based analysis can provide valuable support for decision makers. In this paper, a detailed agent-based simulation model is presented. Agent-based simulation as one particular modeling approach is especially suitable for modeling wholesale electricity markets with market participants making individual decisions on interrelated markets. The presented model is able to simulate wholesale electricity markets including relevant interrelations with respect to time and point of delivery of electrical energy. Long-term developments can be analyzed using an integrated investment module for generation capacity by supply agents. Two recent model extensions, namely the implementation of a market coupling algorithm and of an intraday market, and their exemplary applications are illustrated in the paper.
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TL;DR: In this article, the authors argue that the lack of demand side response, short-term reliability management procedures and uncompetitive ancillary services procurement often undermine market reflective scarcity pricing and distort long-term investment incentives.
Abstract: This paper argues that electricity market reform – particularly the need for complementary mechanisms to remunerate capacity – need to be analysed in the light of the local regulatory and institutional environment. If there is a lack of investment, the priority should be to identify the roots of the problem. The lack of demand side response, short-term reliability management procedures and uncompetitive ancillary services procurement often undermine market reflective scarcity pricing and distort long-term investment incentives. The introduction of a capacity mechanism should come as an optional supplement to wholesale and ancillary markets improvements. Priority reforms should focus on encouraging demand side responsiveness and reducing scarcity price distortions introduced by balancing and congestion management through better dialog between network engineers and market operators.
80 citations
TL;DR: In this article, the authors present a bidding strategy based on an optimization approach for deriving an optimal bid and for estimating the revenue potential on this market, where the focus is on the participation of battery energy storage systems (BESS) either in standalone mode or in conjunction with a virtual power plant (VPP).
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TL;DR: This study developed a core long-term agent-based model to assess different investment decision making algorithms from the literature and introduced a novel price projection method based on optimization modeling, which shows that investment decisions vary enormously depending on the assumptions and parameters used in investment decisionMaking algorithms.
Abstract: Long-term electric power system planning models are frequently used to provide policy support in the context of the ongoing transition towards a low-carbon electric power system. In a liberalized market, this transition relies on generation company investment decisions. These decisions are shaped by both economic and behavioral factors. Agent-based modeling allows the incorporation of both these factors in the description of the investment decision making process. Nevertheless, there are several challenges associated with the design of agent-based models such as the definition of the model structure and its lack of transparency. In this study, we aim to increase the transparency of investment decision making algorithms by shedding light on how implicit assumptions of the price projection methods used in these algorithms impact model results. To achieve this goal, we developed a core long-term agent-based model to assess different investment decision making algorithms from the literature and we introduced a novel price projection method based on optimization modeling. Our results show that investment decisions vary enormously depending on the assumptions and parameters used in investment decision making algorithms. We also found that our proposed price projection method is robust to parametric deviations. Thus, the proposed investment decision making algorithm enables agent-based modelers to mitigate the potential impacts of hidden implicit assumptions.
19 citations
01 Jan 2014
TL;DR: In this paper, the authors analyse the Entwicklung eines gekoppelten deutschen und französischen Strommarktes mithilfe eines agentenbasierten Simulationsmodells untersucht.
Abstract: Kurzfassung: In diesem Beitrag wird die Entwicklung eines gekoppelten deutschen und französischen Strommarktes mithilfe eines agentenbasierten Simulationsmodells untersucht. Das für die Analyse gewählte Modell bildet die wichtigsten Akteure am Strommarkt sowie verschiedene technische Rahmenbedingungen ab. Es simuliert zum einen die Kopplung von nationalen Day-ahead-Märkten und zum anderen Investitionsentscheidungen über neue Kraftwerkskapazitäten. Die Ergebnisse zeigen, dass die Kopplung des deutschen und französischen Marktgebietes dazu beiträgt, extreme Lastbzw. Einspeisesituationen auszugleichen. Sie gewinnt mit zunehmender Einspeisung aus fluktuierenden Quellen an Bedeutung. In Deutschland werden modellendogen in den untersuchten Szenarien vor allem Gas-und-Dampf-Kombikraftwerke zugebaut. Im französischen Marktgebiet wird lediglich in eine geringe Anzahl von Gas-und-Dampf-Kombikraftwerken investiert. Obwohl Anreize für Investoren für Neubauten bestehen, zeigt sich, dass in zukünftigen Jahren die Nachfrage in Frankreich und Deutschland unter den getroffenen Modellannahmen in vereinzelten Stunden nicht vollständig durch die nationale Kraftwerkskapazität und den simulierten Stromaustausch mit dem entsprechend gekoppelten Marktgebiet gedeckt werden kann. Aufgrund der vereinfachten bzw. statischen Berücksichtigung von Speichermöglichkeiten, der Stromnachfrage und des Stromaustausches mit weiteren Marktgebieten besteht zusätzlicher Untersuchungsbedarf insbesondere hinsichtlich des Zusammenspiels dieser Flexibilisierungsoptionen und deren künftige Auswirkung auf Erzeugungssicherheit.
4 citations
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TL;DR: In this article, the authors developed an electricity market simulator that includes the basics of a good practice guide starting from the use cases for generators or producers that compete on different electricity markets in order to maximize their financial results and efficiency.
Abstract: One of the most important and well-known characteristics of the electricity is the necessity to balance almost perfectly the load with generation for each moment of the power system operation. This characteristic, coming from the very beginnings of the power systems design and building, has shaped the operational rules of the power systems and more recently has also shaped the electricity markets structure. The basic parameter used for designing various electricity markets is time. Also, the recent developments of renewable energy lead to a higher complexity of the power systems operation and as a direct consequence a higher complexity of the electricity market structure. Hence, nowadays, it is very difficult for a generation owner to optimize the operation of his asset from all points of view: technical, financial, etc. The main objective of this paper is to develop an electricity market simulator that includes the basics of a good practice guide starting from the use cases for generators or producers that compete on different electricity markets in order to maximize their financial results and efficiency. Thus, this paper mainly proposes to uncover the functionalities a simulator should have to assist market players to access different electricity markets.
References
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TL;DR: In this article, the authors analyse the impact of renewable electricity generation on the electricity market in Germany and show that the financial volume of the price reduction is considerable, which gives rise to a distributional effect which creates savings for the demand side by reducing generator profits.
910 citations
"Agent-Based Simulation of Interrela..." refers background or methods in this paper
...The model has been successfully used for analyzing different types of research questions in the context of electricity markets (e.g. [1], [4])....
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...Providing electricity generation at quasi-zero marginal costs, fluctuating renewable energy sources not only directly affect the short-term price formation on electricity exchanges (see e.g. [1] on the merit order effect of renewables in Germany) they also add another layer of uncertainty in the…...
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TL;DR: In this article, a survey of the most relevant publications regarding electricity market modeling, identifying three major trends: optimization models, equilibrium models and simulation models, is presented, and most suitable approaches for conducting various types of planning studies or market analysis in this new context.
747 citations
"Agent-Based Simulation of Interrela..." refers background in this paper
...Finally, a summary and outlook on future research are given in section V....
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TL;DR: Agent-Based Computational Economics (ACE) is a fairly young research paradigm that offers methods for realistic electricity market modeling as discussed by the authors, and a growing number of researchers have developed agent-based models for simulating electricity markets.
377 citations
"Agent-Based Simulation of Interrela..." refers background in this paper
...Finally, a summary and outlook on future research are given in section V....
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01 Apr 2012
TL;DR: In this article, the BMU-Vorhabens "Langfristszenarien and Strategien fur den Ausbau der erneuerbaren Energien in Deutschland bei Berucksichtigung der Entwicklung in Eu-ropa and global" wurde the neueste and umfassendest Sze-narienanalyse unter Koordination von DLR-STB with For-schungspartnern veroffentlicht.
Abstract: Als Schlussbericht des BMU-Vorhabens "Langfristszenarien und Strategien fur den Ausbau der Erneuerbaren Energien in Deutschland bei Berucksichtigung der Entwicklung in Eu-ropa und global" wurde die neueste und umfassendste Sze-narienanalyse unter Koordination von DLR-STB mit For-schungspartnern veroffentlicht. Die Studie steht in einer Reihe mit den von DLR-STB in den letzten Jahren durchgefuhrten BMU-Leitstudien. Mit funf detaillierten Szenarien wird gezeigt, dass der zugige weitere Ausbau der erneuerbaren Energien (EE) bis zum Jahr 2050 uber 80 Prozent des in Deutschland verbrauchten Stroms und uber 50 Prozent der Warmeversorgung und der Primarenergie decken kann. Der zweite Pfeiler fur das Erreichen dieser Ziele ist die starkere Realisierung von Effizienzpotenzialen in allen Bereichen der Sektoren Strom, Warme und Verkehr. Hierzu mussen wesentlich konsequenter als bislang entsprechende politische Masnahmen auf den Weg gebracht werden. In der Studie wird gezeigt, dass eine grundlegende Voraussetzung fur beide Strategien (EE und Effizienz) eine Ausweitung des Stromeinsatzes darstellt, einerseits zur Warmeversorgung (Warmepumpen, Prozesswarme Industrie u. a.) und andererseits im Verkehr (Elektromobilitat). Wo Strom nicht direkt eingesetzt werden kann, ermoglicht eine chemische Speicherung in Form von Wasserstoff oder synthetischem Methan weitere Einsatzbereiche fur die „Primarenergie“ erneuerbarer Strom. Durch zeitlich aufgeloste Untersuchungen der Stromversorgung in Deutschland einschlieslich des europaischen Stromverbunds konnte in Kooperation mit dem Fraunhofer IWES gezeigt werden, dass auch bei uber 80 Prozent Erneuerbaren der Strombedarf in jeder Stunde eines Jahres gedeckt werden kann. Okonomische Analysen der Szenarien zeigen, dass die positiven volkswirtschaftlichen Wirkungen des Ausbaus der erneuerbaren Energien ab dem Jahr 2025 zum Tragen kommen. Die Bereitstellung von Energie aus erneuerbaren Quellen hat zu diesem Zeitpunkt etwa den gleichen Preis, wie der Einsatz, von Steinkohle, Ol und Erdgas. Kurz nach 2035 kann bereits so viel an teurer werdenden fossilen Energietragern eingespart sein, dass samtliche Vorleistungen fur die Investitionen getilgt wurden. Zur Jahrhundertmitte hat in den Szenarien die Versorgung mit erneuerbaren Energien der Volkswirtschaft dann bereits rund 570 Milliarden Euro gegenuber der Weiterfuhrung einer fossilen Energieversorgung eingespart.
350 citations
TL;DR: The results indicate that representing WPF uncertainty with wind power scenarios that rely on stochastic UC has advantages over deterministic approaches that mimic the classical models.
313 citations
"Agent-Based Simulation of Interrela..." refers background in this paper
...…exchanges (see e.g. [1] on the merit order effect of renewables in Germany) they also add another layer of uncertainty in the short-term operation of conventional power plants since the residual load and therefore the day-ahead prices are highly dependent on the renewable generation profile [2]....
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