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This paper is concerned with zonal pricing as an approach to congestion management. The main contributions of the paper are summarized as follows. Algebraic characterization of optimal zonal prices is presented, where physical tie-line limits are explicitly accounted for without introducing conservatism. In a case of affine bids, it is shown that the optimal zonal price in a zone can be represented...
The offering strategies of Gencoes could change SCUC (Security Constraint Unit Commitment) convergence. As a result, the profit of generating plants will be adjusted. In this paper the minimum profit alteration with no changes in power production is named, as "discrete strategy". Different discrete strategies based on marginal cost is tested and compared with other strategies. Revenue is...
EU law promotes the use of renewable energy sources (RES) in Member States as a tool for sustainable development. Directive 2009/28/CE is the secondary legislation tool focused at promoting investments in RES technology and production. At the state level, legal instruments to promote the use of renewable energy include, renewable energy obligations, feed-in tariffs (FITs), green certificates, mandatory...
This paper examines a series of scenarios achieving progressively very high levels of renewable energy sources (RES) share in the European electricity generation mix in the context of a roadmap to a low carbon economy in Europe quantified using the PRIMES model. Such high RES penetration levels practically require particularly high deployment of wind and solar, which are variable, else intermittent,...
Electric vehicles (EVs) and plug-in hybrid electric vehicles (PHEVs), which obtain their fuel from the grid by charging a battery, are set to be introduced into the mass market and expected to contribute to oil consumption reduction. This research is concerned with studying the potential impacts on the electric utilities of large-scale adoption of plug-in electric vehicles from the perspective of...
In order to obtain a share of renewable electricity of at least 35% by 2020 and 80% in 2050, the German legislator created the German renewables Act (EEG) which has proven to be extremely successful (nearly 20% in 2011) in facilitating investment in renewable power plants and lowering their feed-in-tariffs. But this success currently imposes an evolution of the EEG: As a result of the introduction...
This paper analyses the application of levelized costs criterion to energy markets when there is a significant share of production from intermittent technologies in the power generation system. Under such scenario, the share of dispatchable technologies is often reduced, and producers may face difficulties to recover their production costs trough market.
In the European Union, electricity production from wind energy is projected to increase by approx. 16% until 2020. The Austrian energy plan aims at doubling the currently installed wind power capacity from approx. 1 GW to 2 GW until 2020 including an additional capacity of 700 MW until 2015. The aim of this analysis is to assess economically viable wind turbine sites by considering current feed-in...
In the course of its first (2005–2007) and part of its second (2008–2010) trading periods the EU ETS has revealed insufficient tightness and some inefficiencies in the allocation mechanisms used. Recent amendments to the Emissions Trading Directive will start applying after 2013, such as a reinforced EU-wide emission cap and the end of free allowances for the power sector. Even under stricter rules,...
In this paper we evaluate through simulations economic effects of active electrical energy trading for agile customers in hierarchic energy markets. The agile customers are those residential electricity customers who either have a capability to sell the so-called ”negawatts” (demand reduction), or who operate small renewable generators such as wind mills or solar panels and use storage (battery) to...
This paper investigates how carbon taxes and feed-in tariffs as well as combinations of these regulations influence investment decisions in power generation under uncertainty. Moreover, we analyze the interactions between market power and regulation instruments. To this end, we numerically simulate a microeconomic investment model with a two-stage time structure, different kinds of uncertainty, market...
Large-scale integration of renewable energy sources in today's European hydro-thermal dominated power system will challenge its future operation. In Northern Europe wind power production is expected to contribute the main share to renewable energy sources. Wind forecasting and its inherent forecast error lead to increasing system imbalances. This will require higher production flexibility and more...
This paper presents a perfect competition model of an electricity market that takes into account the starting-up, shutting-down and commitment variables. These variable are modeled through binary variables. The use of binary decision variables makes the cost functions discontinuous and dual variables questionable as equilibrium prices. If the market prices were set to the value of the dual variables,...
Thanks to "smart grids", consumers will gradually become active players in electricity markets, especially by voluntarily decreasing their consumption when receiving scarcity messages from the market operator. For a fast and efficient transition to a more dynamic industry, the regulatory and pricing scheme used both for the endowment of consumers with curtailment rights and the exercise...
During last years, the Italian Electricity Market has seen important changes, aimed at reducing the cost for consumers as well as at improving efficiency and transparency. In this context, the Ancillary Services and Balancing Market (MSD) is operated by the Italian Transmission System Operator, Terna, to procure resources to relieve grid congestion, to build operational reserve and to balance the...
Croatia, Hungary and Slovenia are three neighbouring countries in South East Europe well connected through 400, 220 and 110 kV high-voltage transmission network, thus having the basic prerequisite for the development of a common electricity market. Within the framework of the European energy legislation which is legally defined through the acquis communautaire, obligations of these countries in the...
We present an energy market equilibrium model that captures climate aspects, infrastructure constraints, fuel substitution, and market power ala Cournot in a single framework. The model represents the supply and transportation infrastructure, fuel transformation, power generation, and several demand sectors of fossil fuels, renewables and nuclear energy. We calibrate the model to market data from...
Electricity physical and financial contracts are common instruments used by generators to reallocate their risk among other market participants. Likewise, from the regulator point of view, contracts are understood and promoted as a way to mitigate the generators market power exercise. Therefore the analysis of the impact of these derivatives on the electricity market prices and on the agents' strategic...
Shale gas in Europe could potentially be a big thing, especially in particular regions. Whereas test drillings need to confirm the technical recoverability of deposits and further research is needed on the environmental and safety aspects of shale gas production, this paper illustrates that shale gas developments may have substantial implications for regional gas balances, gas flows, and infrastructure...
The European Union plans to include an energy efficiency binding target in addition to the renewable energy and CO2 emissions targets. This would be the third binding target in the Climate and Energy Package. In this paper, we develop a requisite framework to study interactions arising from the combination of instruments aiming at reducing emissions, promoting renewable energy production and reducing...
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