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We discuss the impact of reserve constraints on energy prices in co-optimised electricity markets, a precursor to smart grids. These constraints impact energy prices and can lead to price spikes and opaque incentives. We illustrate the theoretical mechanisms through which these occur as well as empirical evidence from the New Zealand electricity spot market from the years 2008 to 2013. We present...
In the last two decades, the electricity industry has been reorganized to run on competitive lines in many countries. In the traditional cost of service structure of the electric power sector the costs were simply allocated to generation, transmission and distribution. After the restructuring, some activities were split up and new institutions were created, thus increasing the number of components...
This paper proposes a methodology for quantifying and allocating the economic benefits of implementing Photovoltaic Panels (PV) and Energy Storage Systems (ESS) in diesel powered isolated Remote Communities (RCs). The study, a cost-benefit analysis, proposes a set of benefits, incurred costs and stakeholders affected by the implementation from a long-term planning perspective. As a demonstration,...
Electric vehicles (EVs) can be an important building block of future power systems due to the flexibility of the charging process. In liberalized power systems, the objectives of using this flexibility vary for different actors in the system. In this paper we formulate the optimization problem of EV charging from the perspective of three different actors: 1) consumers (represented by an aggregator),...
The electricity sector liberalisation in Europe has contributed significantly towards the creation of competitive markets. The wholesale trading of electricity consists of a market-based segment often complemented by markets for ancillary services, including the provision of operating reserves. In this paper, the authors examine and classify operating reserves that are currently traded in the Netherlands...
Intermittent and uncertain nature of power output from weather-dependent renewable energy sources like solar is a major challenge in integrating them with traditional power grids that mostly consist of reliable power sources. We have created a framework for efficiently managing the weather-related uncertainty risk of solar generators and facilitating their integration into power grids while optimizing...
In the deregulated power systems, the interruptible load management (ILM) is widely used as an effective measure to ensure reliability and mitigate the market price spike. A critical issue is the incentive paid to the consumers to participate in the ILM. This paper addresses the quantification and allocation of ILM's benefit from mitigating the wholesale price spike. This benefit is calculated within...
In paper using possibility of algorithm of nodal prices determination for inhomogeneous networks taking into account carrying capacity of the lines is considered. In this case, active power distribution is also affected by reactive power, respectively, it influence on nodal prices. As a result of technological limitations, in different nodes of a power system differing prices could form. For illustration...
This paper proposes a systematic method for evaluation of optimal spot prices using genetic algorithm as well as classical method. Spot pricing of electricity in a power system was proposed during early eighties considering unit generation and consumer usage as decision variables. With restructuring followed by deregulation, a number of players have started participating in the competitive power market...
Climate change and security of supply have made it imperative for Europe to look at renewable sources of energy. Among the available sources, wind has emerged as the preferred option and this is evident from the fact that in 2008, wind formed the highest proportion of total capacity addition in Europe. Improvement in turbine efficiency, which in turn reduced the per unit generation cost of wind turbine...
Since 2004 changes in the regulatory framework of the Chilean public and electricity sectors have been taken place (19940 law in March 2004). Transparency rules must be following by the market agents in pricing procedures of the electricity market. Consequently, technical, economical, and reliability data of the Chilean power system are available for simulation and optimization purposes. The Chilean...
This paper proposes a new mechanism to give added incentive to invest in new capacities in deregulated electricity markets. An optimization problem to maximize long term social welfare includes binary variables for the building of new facilities, and continuous variables for generation, i.e. the model is a mixed integer nonlinear program. The new mechanism also includes a new approach to calculate...
This paper investigates a two stage equilibrium model for generators' strategic behaviors in contract signing in the forward market and electricity bidding in the electricity spot market. We propose a linear asymmetric supply function equilibrium model to develop generators' optimal bidding strategies considering a forward market equilibrium in the second stage, and show the existence and uniqueness...
The process of price formation in an electricity market is an extremely complex one in practice due to different endogenous factors, namely generator gaming, unexpected out-ages and transmission congestion, among others. As a result, the market clearing prices are of stochastic nature, bringing about uncertainty and risk to all participants. In this work, the role of the demand as determining factor...
The integration of wind resources into power systems entails new challenges at all levels of the electricity industry. In this paper, we discuss critical issues emerging due to the incorporation of wind power suppliers in existing electricity market designs. We discuss the impacts of wind power intermittency and uncertainty on the planning and operation of the system and markets. In particular, we...
The opportunities and challenges of implementing a smart electric supply system are discussed, including how to integrate the local public goods of electric system reliability, and increasingly of environmental compliance, in an efficient way. The full potential of the smart grid cannot be attained, however, without the wide-spread availability of real-time pricing for electricity so that all parties,...
The Smart Grid includes automatic responses to events on the grid, responses such as demand side management, the operation of storage devices, and the control of reactive power sources. Many of these actions will involve one party obtaining automated assistance from another party, often in a fraction of a second, and generally in time periods shorter than the settlement periods of conventional ISO...
Calls to improve customer participation as a key element of smart grids have reinvigorated interest in demand-side features such as distributed generation, on-site storage and demand response. In the context of deregulated market structures, these features can improve flexibility of demand, but at the cost of added uncertainty. Therefore, how to implement these features under deregulated power markets...
In this paper, the need of suitable mechanism for wind power trading is discussed and the tariff rate decided by state electricity commissions is compared with the rates a wind generator can avail if it opts for unscheduled interchange rates/ day ahead tariff. A Wind generator must buy or sell energy production deviations as per prediction errors when they bid in day-ahead energy markets. A suitable...
In a remote coastal region supply of energy from national grid is insufficient for a sustainable development. Integration and optimization of local alternative renewable energy sources is an optional solution of the problem. In this paper we have studied the energetic potential of local sources of renewable energy (hydro, solar and wind). A bottom-up energy system optimization model is proposed in...
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