With the sustained deployment of distributed generation capacities and the more proactive role of consumers, power systems and their operation are drifting away from a conventional top-down hierarchical structure. Electricity market structures, however, have not yet embraced that evolution. Respecting the high-dimensional, distributed and dynamic nature of modern power systems would translate to designing peerto-peer markets or, at least, to using such an underlying decentralized structure to enable a bottom-up approach to future electricity markets. A peer-to-peer market structure based on a Multi-Bilateral Economic Dispatch (MBED) formulation is introduced, allowing for multi-bilateral trading with product differentiation, for instance based on consumer preferences. A Relaxed Consensus+Innovation (RCI) approach is described to solve the MBED in fully decentralized manner. A set of realistic case studies and their analysis allow us showing that such peerto-peer market structures can effectively yield market outcomes that are different from centralized market structures and optimal in terms of respecting consumers preferences while maximizing social welfare. Additionally, the RCI solving approach allows for a fully decentralized market clearing which converges with a negligible optimality gap, with a limited amount of information being shared.
When the share of variable renewable energy, such as wind energy, in the energy system becomes large, the integration cost increases in accordance with the depletion of flexible ramping capabilities of the system. Therefore, integration of large shares of wind power into power system operations calls for market integration as well as for additional flexibility. Among the various available options, wind power plants themselves have the technical potential of offering flexibility. Using the Danish market conditions as a case study, we model and analyze four strategies for the participation of a wind power producer in day-ahead and real-time electricity markets, and compare how they affect the value of wind power production. Our findings suggest that wind power plants can have a more solid business case if they are active on both day-ahead and real-time power markets, which increases the economic value of wind energy as well as reduces the system integration costs. We also highlight that support schemes can affect the incentives for active participation on real-time power markets. This type of insight is valuable for wind power's potential to expand its market share while keeping a high economic value in power markets, where the political trend is towards market based deployment of renewables and focus on low system integration costs.balancing markets, electricity markets, market design, value of wind, wind energy
| INTRODUCTIONWind energy constitutes an increasingly large share of the energy supply in many countries around the world (IEA, 2017). Together with solar photovoltaic, wind energy is one of the major renewable energy technologies that will substitute fossil fuel based generation in the future decarbonized energy system. Therefore, a large expansion of additional wind energy deployment is expected in the years to come.Some countries have already good experiences with large-scale integration of wind energy and in creating framework conditions that facilitate this. In Denmark, wind energy covered more than 42% of the annual domestic electricity consumption in 2015 and 2017 with as much as 55% in Western Denmark (Energinet.dk). These shares are expected to increase substantially in the years towards 2035, where the political target is a 100% renewable based electricity sector.One could argue that the present power markets are not designed for such high shares of wind power production and that it would be hard to get reliable and stable prices. However, Skytte and Grohnheit (2017) show that the Nordic power market
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