Benefits of a multi-energy day-ahead market

Abstract

Energy system integration can bring several benefits to energy systems, notably to those that are in transition to high shares of renewable energy. Strategies are needed to realize the theoretical benefits of this approach in practice. Therefore, this paper proposes the organization and mathematical formulation of a multi-carrier day-ahead market in which electricity, gas and heat are traded simultaneously. This market set-up is applied to a conceptual test case to identify how -compared to a reference set-up mimicking the current practice -the multi-carrier market is able to unlock the benefits of energy system integration. It is quantitatively shown that the multi-carrier market (1) eliminates the need for forecasts of prices on subsequent markets and the consequences of the related errors, (2) allows to use the flexibility available in one carrier to facilitate the balancing in another, e.g. using the flexibility of a heat system to help balance the electricity system, and (3) enables specific market outcomes, unachievable in a sequential set-up, which increase the optimality of the market outcome.

Coordinated post-contingency dispatch of integrated energy system with multiple participants based on distributed energy trading

“…The power flow model is non-convex and nonlinear due to (16). Since the electricity distribution systems usually are radial networks, the second-order cone relaxation is an effective method to deal with the non-convex constraint [25].…”

“…Sorknaes et al [15] introduced the concept of Smart Energy Markets, which integrates the electricity, heating, gas and fuel markets in future energy systems. Stiphout et al [16] quantitatively analyzed the benefits of a multi-energy market by taking the advantages of energy system integration. In [17], a cooperative optimal operation model for multiple energy hubs was developed based on game theory.…”

Designing day-ahead multi-carrier markets for flexibility: Models and clearing algorithms

“…A market-based, economic integration of multi-energy systems is crucial to operate the multi-energy systems in a liberalised context and deliver on a promise of sector coupling. Besides a few exemptions that consider electricity markets, gas markets, and heating/cooling 2 (regulated) markets, [22,23,24,25], the majority of literature considers coupling of electricity and gas markets, see e.g., [26,27,28,29,30,31]. Zhao et al [26] studied the day-ahead gas and electricity market model in which the two markets are operated by different entities.…”

“…The above cited literature ( [22] - [34]) investigates the linkages and the associated impacts that exist between the energy systems of heat, natural gas and electricity (power) and to a certain extent study different levels of market-based coordination between the associated carriers. Some authors take perspective of market participants and study the optimal participation strategy of certain technologies in such an integrated market environment, see e.g.…”

Short Term Electricity Market Designs: Identified Challenges and Promising Solutions

“…These markets aim to address two main concerns. The first concern is the lack of coordination across energy systems, which may result in an inefficient usage of energy resources and forecasting errors [111][112][113][114]. For instance, gas-fired power plants (GFPPs) bid in the DA electricity market with prices that may not reflect the price of natural gas, as the latter is traded separately in the gas market [111,112].…”