Automatic risk adjustment for profit maximization in renewable dominated
            <scp>short‐term</scp>
            electricity markets

Bottieau, Jérémie; Bruninx, Kenneth; Sanjab, Anibal; Grève, Zacharie De; Vallée, François; Toubeau, Jean‐François

doi:10.1002/2050-7038.13152

Cited by 2 publications

(1 citation statement)

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“…There is also a broad literature on optimizing the strategy of different agents in balancing markets. Such literature includes analyses of optimal trading strategies [22], [23], the minimization of portfolio imbalance [24], the optimal activation of balancing energy by system operators [25], and the optimal scheduling of batteries that perform reactive balancing [26]. Nevertheless, this line of work is tangent to our analysis, which is focused on the design of balancing markets.…”

Section: B Literature Reviewmentioning

confidence: 99%

Market Equilibria in Cross-Border Balancing Platforms

Cartuyvels,

Bertrand,

Papavasiliou

2024

IEEE Trans. on Enrgy Mrkts, Pol and Reg

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The next phase of electricity market integration in Europe will see the introduction of pan-European balancing platforms, MARI and PICASSO, for the trading of manual and automatic frequency restoration reserve. This paper provides an analytical framework for the study of pricing asymmetries between European member states in this context. The pricing asymmetries are due to balancing incentive components and consist of the unilateral introduction by a member state of either (i) an adder on the imbalance price and balancing price, (ii) an adder on the imbalance price solely, or (iii) the introduction of a real-time price for the trading of real-time balancing capacity. Our analytical framework allows us to characterize the optimal bidding strategy of flexible assets under the different designs and to derive the resulting equilibria. Our analysis demonstrates that adders without the trading of balancing capacity create inefficiencies by distorting the merit order and tend to be detrimental to the member state that introduces it.

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