An Insurance Contract Design to Boost Storage Participation in the Electricity Market

Aguiar, Nayara; Gupta, Vijay

doi:10.1109/tste.2020.3011052

Cited by 11 publications

(7 citation statements)

References 24 publications

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“…While termed differently, both competitive exchanges of trading rights and regulated storage have the financial characteristics of revenue swap style arrangements, where the purchaser receives entitlements to the inter-temporal arbitrage gains that storage generates, and the investor receives fixed payments. Given shorter-timeframes, Aguiar and Gupta (2021) propose an insurance contract between storage and a renewable producer to address the problem of imbalance shortfall allocation in two-settlement markets.…”

Section: Figure 2: Structural Categorization Of Storage Contractsmentioning

confidence: 99%

Contract design for storage in hybrid electricity markets

Billimoria

Simshauser

2023

Joule

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Section: Figure 2: Structural Categorization Of Storage Contractsmentioning

confidence: 99%

Contract design for storage in hybrid electricity markets

Billimoria

Simshauser

2023

Joule

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“…Implementation of economically viable storage systems in the electricity markets can be achieved with the future decrease in technology costs or increase in electricity market prices. Contrary to many economic assessments that prove electric energy storage systems currently to be unprofitable in today's day-ahead markets, [66] proposes a hedging mechanism with insurance contracts between a renewable producer and storage system. With such a contract, renewable producers can avoid penalties if they are unable to meet day-ahead production because storage reserves are contracted for such renewable shortfalls.…”

Section: Overview Of the Economic Assessmentmentioning

confidence: 99%

Prospects of electricity storage

Topalović

Haas

Ajanović

et al. 2023

Renew. Energy Environ. Sustain.

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With the expansion of renewables in the electricity markets, research on electricity storage economics is needed for a better understanding of the utilization of these systems and for improving the performance of intermittent variable generation. Collected up-to-date research of electricity storage systems published in a wide range of articles with high impact factors gives a comprehensive review of the current studies regarding all relevant parameters for storage utilization in the electricity markets. Valuable research of technical characteristics from the literature is broadened with the electricity storage analyses from an economic point-of-view. Analysis of selected technologies, considering different perspectives such as their profitability, technical maturity, and environmental aspect, is a valuable addition to the previous research on electricity storage systems. Comparing conducted analysis with the selected literature, electricity storage technologies are analyzed concerning their viability in the electricity markets. Given the current outlook of the electricity market, the main problems for storage's wider integration are still energy storage costs. These can be overcome with different applications of energy storage systems, integration of new market players, or a combination of storage technologies along with the implementation of new energy policies for storage.

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“…In contrast, we will show that this variability-induced demand elasticity will help the rental market avoid price-fixing. We note that the work in [2] also proposed to trade usage rights in an electricity market. However, [2] focused on studying the existence of a feasible contract without addressing the price-fixing behavior in such markets.…”

Section: Solar-panel Rental Marketsmentioning

confidence: 99%

“…We note that the work in [2] also proposed to trade usage rights in an electricity market. However, [2] focused on studying the existence of a feasible contract without addressing the price-fixing behavior in such markets.…”

Section: Solar-panel Rental Marketsmentioning

confidence: 99%

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Distribution-level markets under high renewable energy penetration

Lin

Huang

2022

Proceedings of the Thirteenth ACM International Conference on Future Energy Systems

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We study the market structure for emerging distribution-level energy markets with high renewable energy penetration. Renewable generation is known to be uncertain and has a close-to-zero marginal cost. In this paper, we use solar energy as an example of such zero-marginal-cost resources for our focused study. We first show that, under high penetration of solar generation, the classical real-time market mechanism can either exhibit significant price-volatility (when each firm is not allowed to vary the supply quantity), or induce price-fixing (when each firm is allowed to vary the supply quantity), the latter of which leads to extreme unfairness of surplus division. To overcome these issues, we propose a new rental-market mechanism that trades the usage-right of solar panels instead of real-time solar energy. We show that the rental market produces a stable and unique price (therefore eliminating price-volatility), maintains positive surplus for both consumers and firms (therefore eliminating price-fixing), and achieves the same social welfare as the traditional real-time market. A key insight is that rental markets turn uncertainty of renewable generation from a detrimental factor (that leads to price-volatility in real-time markets) to a beneficial factor (that increases demand elasticity and contributes to the desirable rental-market outcomes). CCS CONCEPTS• Hardware → Smart grid.

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An Insurance Contract Design to Boost Storage Participation in the Electricity Market

Cited by 11 publications

References 24 publications

Contract design for storage in hybrid electricity markets

Contract design for storage in hybrid electricity markets

Prospects of electricity storage

Distribution-level markets under high renewable energy penetration

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