Showing papers on "Energy market published in 2011"

Bidding Strategy of Virtual Power Plant for Participating in Energy and Spinning Reserve Markets—Part I: Problem Formulation

Abstract: This paper addresses the bidding problem faced by a virtual power plant (VPP) in a joint market of energy and spinning reserve service. The proposed bidding strategy is a non-equilibrium model based on the deterministic price-based unit commitment (PBUC) which takes the supply-demand balancing constraint and security constraints of VPP itself into account. The presented model creates a single operating profile from a composite of the parameters characterizing each distributed energy resources (DER), which is a component of VPP, and incorporates network constraints into its description of the capabilities of the portfolio. The presented model is a nonlinear mixed-integer programming with inter-temporal constraints and solved by genetic algorithm (GA).

An Intelligent Auction Scheme for Smart Grid Market Using a Hybrid Immune Algorithm

Abstract: Smart Grid technology is recognized as a key component of the solution to challenges such as the increasing electric demand, an aging utility infrastructure and workforce, and the environmental impact of greenhouse gases produced during electric generation. This paper presents the application of a hybrid optimization algorithm for distributed energy resource (DER) management in Smart Grid operation. The approach emphasizes the advantages of using multiagent systems for profitable operation of a Smart Grid in the energy market. The trading strategy adopted for the auction process is a profit-maximizing adaptive bidding strategy based on risk and competitive equilibrium price prediction. The auctioneer manages the usage of DERs by receiving bids from buyers and asks from sellers. A hybrid-immune-system-based particle swarm optimization is used to minimize the fuel cost for generation assuming realistic market prices for power, distributed generator bids reflecting realistic operational costs, and load bids customized according to the consumers' priorities. The simulation results clearly indicate that the agent-based management is effective in coordinating the various DERs economically and profitably.

Bidding Strategy of Virtual Power Plant for Participating in Energy and Spinning Reserve Markets—Part II: Numerical Analysis

Abstract: This paper is to evaluate the presented model in part I for bidding strategy of virtual power plant (VPP) with centralized control in a joint market of energy and spinning reserve service. Two test VPPs are introduced and different scenarios are considered for markets prices. At first, the participation of VPP in only energy market is studied. Then, the spinning reserve market is taken into consideration and the bids of VPP in a joint market of energy and spinning reserve service is studied under different scenarios of markets prices and the results are analyzed. In all cases, the results show the effectiveness and the quality of the procedure and validate the proposed model.

Cooperatives of distributed energy resources for efficient virtual power plants

Abstract: The creation of Virtual Power Plants (VPPs) has been suggested in recent years as the means for achieving the cost-efficient integration of the many distributed energy resources (DERs) that are starting to emerge in the electricity network In this work, we contribute to the development of VPPs by offering a game-theoretic perspective to the problem Specifically, we design cooperatives (or "cooperative VPPs"---CVPPs) of rational autonomous DER-agents representing small-to-medium size renewable electricity producers, which coalesce to profitably sell their energy to the electricity grid By so doing, we help to counter the fact that individual DERs are often excluded from the wholesale energy market due to their perceived inefficiency and unreliability We discuss the issues surrounding the emergence of such cooperatives, and propose a pricing mechanism with certain desirable properties Specifically, our mechanism guarantees that CVPPs have the incentive to truthfully report to the grid accurate estimates of their electricity production, and that larger rather than smaller CVPPs form; this promotes CVPP efficiency and reliability In addition, we propose a scheme to allocate payments within the cooperative, and show that, given this scheme and the pricing mechanism, the allocation is in the core and, as such, no subset of members has a financial incentive to break away from the CVPP Moreover, we develop an analytical tool for quantifying the uncertainty about DER production estimates, and distinguishing among different types of errors regarding such estimates We then utilize this tool to devise protocols to manage CVPP membership Finally, we demonstrate these ideas through a simulation that uses real-world data

Financing Renewable Energy in the European Energy Market

Abstract: The Directive 2009/28/EC on the promotion of the use of energy from renewable sources (RES) sets the overall target to reach 20% renewable energy in gross final energy consumption in 2020. This target is broken down into binding individual Member State targets. Reaching these targets will require a huge mobilization of investments in renewable energies in the coming decade. In order to improve financing and coordination with a view to the achievement of the 20 % target, Article 23 (7) of the Directive requires the Commission to present an analysis and action plan with a view to: (a) The better use of structural funds and framework programmes; (b) The better and increased use of funds from the European Investment Bank and other public finance institutions; (c) Better access to risk capital; (d) The better coordination of Community and national funding and other forms of support; (e) The better coordination in support of renewable energy initiatives whose success depends on action by actors in several Member States. This report presents the results of the title project. The study provides an up to date and thorough assessment of the costs of renewable energy and the support and financing instruments available for renewable energy R and D, demonstration projects and large-scale deployment. This includes details of each Member State's expenditure (via grants, support schemes, loans etc.) and use of Community funds, including loans of the EIB (European Investment Bank) and the EBRD (European Bank for Reconstruction and Development). It also explores the possible instruments for use in the future and constraints in the capital market, which hinder the development of renewable energy. Finally, it develops recommendations for improving financing and support instruments, improving the sector's access to capital, and closing the financing gap for reaching the 2020 targets. The chapters of the report represent separate tasks: (1) Costs of renewable energy technologies; (2) Overview of available support instruments and support expenditures in the Member States; (3) Current and planned EU funding inside and beyond the EU; (4) Cost scenarios for reaching the 2020 RES objectives; (5) Evaluation of financing instruments, support instruments, and the sector's access to capital; (6) Review and evaluation of existing and alternative support and financing instruments: reducing the costs of reaching the EU 2020 targets; (7) Conclusions and recommendations.

Renewable Energy Technology Cost Review

Abstract: This paper undertakes a review of current and future costs of three forms of renewable energy technology by comparing data from a range of international and Australian-specific studies, taking care to compare data on the same basis of financial assumptions (discount rates) and resource quality. The purpose was to compare the absolute costs and the rate of decrease in costs, and to understand the reason for differences between the studies. The Australian-specific datasets are the ‘Australian Energy Generation Technology Costs’ report by the Electric Power Research Institute (EPRI), and the 2010 dataset used by the Australian Energy Market Operator (AEMO), largely based on the EPRI data with a review from ACIL Tasman. The assessment reviewed technical and economic parameters of wind, photovoltaic (PV) and concentrating solar thermal (CST) energy generation technologies, considering technology specific learning rates and cost reduction potentials. It includes a detailed exploration of the factors contributing to the learning rates and cost reductions. Levelised Cost of Energy (LCOE) calculations were used to develop cost outlooks and compare the outlooks to other projections. Where relevant, LCOE is calculated from capital and operating cost data at a common renewable resource level, exclusive of subsidies or carbon costs. Common financial assumptions (in particular discounting rates) are used to provide a consistent basis of comparisons and analysis.

Review of best practices of solar electricity resources applications in selected Middle East and North Africa (MENA) countries

Abstract: Middle East and North Africa (MENA) countries present abundant solar potential, which to some extent has been exploited for electricity production. However, the largest part of this potential remains still unexploited. The scope of this paper is to present the best practices in exploiting solar energy in selected MENA countries. First the general structure of energy market related to Renewable Energy Sources (RES) for each analyzed country is presented. Then the exploitation of solar energy via PVs with special focus to the achievements in rural electrification, which could be used as a paradigm for other countries with similar problems, is displayed. MENA countries are promising for the wide application of concentrating solar plants (CSP), as recent research has shown, and some interesting applications in this area, also presented in this paper, have started being implemented.

Stochastic MPC for real-time market-based optimal power dispatch

Abstract: We formulate the problem of dynamic, real-time optimal power dispatch for electric power systems consisting of conventional power generators, intermittent generators from renewable sources, energy storage systems and price-inelastic loads. The generation company managing the power system can place bids on the real-time energy market (the so-called regulating market) in order to balance its loads and/or to make profit. Prices, demands and intermittent power injections are considered to be stochastic processes and the goal is to compute power injections for the conventional power generators, charge and discharge levels for the storage units and exchanged power with the rest of the grid that minimize operating and trading costs. We propose a scenario-based stochastic model predictive control algorithm to solve the real-time market-based optimal power dispatch problem.

Environmental Regulations, Market Structure and Technological Progress in Renewable Energy Technology — A Panel Data Study on Wind Turbines

Abstract: We study the impact of environmental regulations on the patent activities for wind turbines between 1980 and 2008. We explicitly control for energy market liberalisation and take a potential interaction between liberalisation and policy instruments into account. We find a strong and highly significant effect of environmental tax revenues, which we regard as a proxy for the extent to which energy prices changed in favour of renewable energies, as well as foreign demand for wind turbines on innovation activities. In addition, we find that price-based policy instruments are more effective in fostering innovations in the wind turbine technology when energy markets are fully open to competition. In contrast, non-price-based policy instruments such as grants or low interest rate loans are largely independent from whether or not energy markets are liberalised.

Impact of demand response on distribution system reliability

Abstract: Demand response (DR) is a market driven and sometimes semi-emergency action performed at the utility level or at the Demand Response Service Provider (aggregator) with the objective of reducing the overall demand of the system during peak load hours. If implemented successfully, DR helps postpone the capacity expansion projects related to the distribution network, and provides a collaborative framework for the liberalized energy market of the Smart Grid. Customers subscribed to the DR program are requested to reduce their demand or turn off one or more energy consuming appliances in exchange for financial incentives such as extra payments or discounted electricity rates. This would change the concept of distribution system reliability as is traditionally known. From one hand, DR could lead to a higher amount of unserved energy; on the other hand, it does not qualify as an unwanted lost load. This paper tries to provide a qualitative analysis on the impact of demand response on distribution system reliability.

Consistent assessment of the energy and economic performance of second generation biofuel production processes using energy market scenarios

Abstract: This paper proposes a consistent way of assessing the performance of second generation biofuel production using energy market scenarios. During biofuel production a number of products and services can be co-generated while import of energy services (e.g. electricity and heat) in addition to the fuel supply may also be needed. This needs to be reflected by a welldefined performance indicator enabling a comparison between different process alternatives. A marginal production perspective is proposed for the definition of a general energy performance indicator, recalculating all services to primary energy on a system level. The Energy Price and Carbon Balance Scenarios (ENPAC) tool developed at Chalmers is used for the definition of the energy system background. Thereby, a scenario-specific comparison of the processes’ thermodynamic performance is possible. The usefulness of the approach is illustrated for production of synthetic natural gas (SNG) from biomass. The shortcomings of common performance indicators are also discussed.

Optimal transmission switching: economic efficiency and market implications

Abstract: Traditionally, transmission assets for bulk power flow in the electric grid have been modeled as fixed assets in the short run, except during times of forced outages or maintenance. This traditional view does not permit reconfiguration of the transmission grid by the system operators to improve system performance and economic efficiency. The current push to create a smarter grid has brought to the forefront the possibility of co-optimizing generation along with the network topology by incorporating the control of transmission assets within the economic dispatch formulations. Unfortunately, even though such co-optimization improves the social welfare, it may be incompatible with prevailing market design practices since it can create winners and losers among market participants and it has unpredictable distributional consequences in the energy market and in the financial transmission rights (FTR) market. In this paper, we first provide an overview of recent research on optimal transmission switching, which demonstrates the substantial economic benefit that is possible even while satisfying standard N−1 reliability requirements. We then discuss various market implications resulting from co-optimizing the network topology with generation and we examine how transmission switching may affect locational Marginal Prices (LMPs), i.e., energy prices, and revenue adequacy in the FTR market when FTR settlements are financed by congestion revenues.

A challenging approach for renewable energy market development

Abstract: This study demonstrates a challenging production-based and market-driven approach for the development of renewable energy (RE) market. The organized data in our research show that the countries that adopt more RE policies appear to generate more RE products. Among those instruments, incentives/subsidies for production are common and decisive to the popularization of RE products. Recently, the primary RE policy goal for governments is to promote RE products by removing various barriers. However, the energy market should be liberalized as RE products are ubiquitous and able to compete with fossil products. The priority of instruments that governments are supposed to take in order are to remove incentives/subsidies for fossil products, to tax fossil products for the sake of reduction of greenhouse gases emissions, and then, to remove all incentives/subsidies for both fossil and RE products. Furthermore, RE products may have adverse resource and environmental consequences and this dilemma can be averted by taking net energy output as a standard in incentives/subsidies instruments. It was suggested that RE markets are supposed to be classified into three market phases – undeveloped, developing and developed markets. As a promising policy approach, governments have to adopt suitable and flexible instruments to achieve policy goals in different RE market phases.

Differential Evolution Algorithm for Security-Constrained Energy and Reserve Optimization Considering Credible Contingencies

Abstract: Reserve services are an essential part of a standard market design and are under development in major electricity markets. This paper presents the development of differential evolution algorithm for optimal allocation of energy and spinning reserve. The optimization is performed in an integrated market with biddable spinning reserve and sectional price offer curves while considering all security and power systems constraints in steady state and system credible contingencies. The effectiveness of the proposed method is examined by application of the proposed algorithm on the IEEE 30-bus test system. Some comparisons are made with analytical and evolutionary methods in various cases.

Wholesale energy market in a smart grid: Dynamic modeling and stability

Abstract: The recent paradigm shift in the architecture of a smart grid is driven by the need to integrate renewable energy sources, the availability of information via advanced metering and communication, and an emerging policy of a demand structure that is intertwined with pricing. By using smart grid communication technologies that offer dynamic information, the ability to use electricity more efficiently and provide real-time information to utilities is expected to be significantly improved. The introduction of both renewable energy sources as well as efforts to integrate them through an information processing layer brings in dynamic interactions between the major components of a smart grid. In this paper, a dynamic model of the wholesale energy market due to the network constraints is derived. This dynamic model is fundamentally linked to one of the central features of the energy market, of optimal power flow. Beginning with a framework that includes real-time pricing, an attempt is made in this model to capture the dynamic interactions between generation, demand, locational marginal price, and congestion price near the equilibrium of the optimal dispatch. Conditions under which stability of the market can be guaranteed are derived. Numerical studies are reported to illustrate the dynamic model, and its stability properties.

Governing China’s Energy in the Context of Global Governance

Abstract: This article seeks to understand what role China can and will play in global energy governance by examining how its domestic energy context shapes the country’s attitudes toward the multilateral, market and climate change aspects of global energy governance. It finds that China demonstrates a preference for bilateral/regional to multilateral energy institutions, exhibits an inclination to blend state and market when pursuing energy security, and shows a principally consistent but pragmatically flexible approach to global negotiations on climate change. Contrary to the conventional wisdom, China’s engagement with the international energy order suggests that a rising and energy-hungry China has not and is unlikely to upset the very system that has benefited and will continue to benefit the country. Instead, this article argues that China has shown signs and promises of contributing to global energy governance by offering financial, technical solutions and stimulating the world to develop clean energy. However, energy governance in China has experienced considerable capacity decay in the era of reform and globalization. This decay not only bodes ill for the country’s ability to lead in global energy governance but also complicates international attempts to engage China on complex energy and climate challenges. Policy Implications • The fragmentation of the central government in China, together with the rise of substate actors and state-owned flagship energy corporations in the country’s energy governance, means that it is unrealistic to expect China to have a unified view and voice on global energy governance in the near term. • In light of the fundamental interests of China to engage the international system, the country’s absence from the world’s most important multilateral energy institutions says as much about its reluctance to join these restrictive organizations as these organizations’ lack of seriousness to engage China. • The blending of market tools to a state-dominated energy economy characterizes China’s state capitalism approach to addressing complex energy challenges and the country has largely exported this approach when it engages the international energy market. • China’s staunch positions on climate change bespeak its preoccupation with development, but its changing attitudes toward key issues in global climate negotiations reflect its flexible and pragmatic approach to development. • To seek effective participation from China in global energy governance, the international community cannot engage Beijing alone; instead, it must also engage local governments in China that have gained autonomy over energy affairs and those restructured and partially marketized energy SOEs that have exhibited entrepreneurship in shaping and implementing the country’s energy and climate policies.