Examining the benefits of load shedding strategies using a rolling-horizon stochastic mixed complementarity equilibrium model

Devine, Mel T.; Bertsch, Valentin

doi:10.1016/j.ejor.2017.11.041

Cited by 15 publications

(15 citation statements)

References 40 publications

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“…The importance of stochastic modelling of variable renewable generation is wellestablished in the literature, with Ambec and Crampes (2012) providing a useful summary. Stochastic modelling is particularly important for the high-renewable scenarios under examination here (Devine and Bertsch, 2018). On the demand side, the model distinguishes between residential and industrial/commercial consumers, both of whom have the objective of minimising their costs.…”

Section: Original Contributions Of This Papermentioning

confidence: 99%

The role of power-to-gas in the future energy system: Market and portfolio effects

Lynch

Devine

Bertsch

2019

Energy

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Electricity systems based on renewables have an increasing demand for flexibility. This paper considers the potential of power-to-gas to provide flexibility and enhance system integration of renewables. Existing research on power-to-gas typically analyses the system effects of a predetermined power-to-gas unit without endogenising the investment decision. Moreover, insights related to market and portfolio effects of power-togas are rare. To this end this work presents a stochastic electricity market model. Market players considered include generating firms with different generation portfolios and different consumer groups. Firms earn revenues from an energy market, a capacity market and a feed-in premium for renewable generation. They maximise their profits by optimising the operation of existing assets and investing in new generation assets and power-to-gas. Firms with renewable generation benefit from investing in power-to-gas. While the technology itself is loss-making, power-to-gas particularly increases demand and hence prices in low-load hours.Therefore, renewable generation becomes more profitable, which justifies the investment. Metrics such as LCOE, which consider each technology in isolation, fail to capture this effect. The increase in the electricity price results in higher costs to consumers and so the overall transfer from consumers to wind generators increases in the presence of power-to-gas.

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Section: Original Contributions Of This Papermentioning

confidence: 99%

The role of power-to-gas in the future energy system: Market and portfolio effects

Lynch

Devine

Bertsch

2019

Energy

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“…In previous works that use similar data, the presence of price-making behaviour was found to lead to a larger increases in consumer costs (Devine and Bertsch, 2018). However, the ability of the price-taking fringe to invest in new generation motivates the price-making firms to reduce forward market prices in some time periods.…”

Section: Results From Epec Modelmentioning

confidence: 72%

“…For a comprehensive review of electricity market models that incorporate market power, we refer the reader to Pozo et al (2017). More recent examples in the operations research literature include Devine and Bertsch (2018) who use a Mixed Complementarity Problem (MCP) to study different consumer led load shedding strategies. MCPs solve multiple constrained optimisation problems simultaneously and in equilibrium and they allow players with market power to be modelled as Cournot players.…”

Section: Introductionmentioning

confidence: 99%

Modelling an electricity market oligopoly with a competitive fringe and generation investments

Devine¹,

Siddiqui²

2020

Preprint

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Market power behaviour often occurs in modern wholesale electricity markets. Mixed Complementarity Problems (MCPs) have been typically used for computational modelling of market power when it is characterised by an oligopoly with competitive fringe. However, such models can lead to myopic and contradictory behaviour. Previous works in the literature have suggested using conjectural variations to overcome this modelling issue. We first show however, that an oligopoly with competitive fringe where all firms have investment decisions, will also lead to myopic and contradictory behaviour when modelled using conjectural variations.Consequently, we develop an Equilibrium Problem with Equilibrium Constraints (EPEC) to model such an electricity market structure. The EPEC models two types of players: price-making firms, who have market power, and price-taking firms, who do not. In addition to generation decisions, all firms have endogenous investment decisions for multiple new generating technologies. The results indicate that, when modelling an oligopoly with a competitive fringe and generation investment decisions, an EPEC model can represent a more realistic market structure and overcome the myopic behaviour observed in MCPs. The EPEC considered found multiple equilibria for investment decisions and firms profits. However, market prices and consumer costs were found to remain relatively constant across the equilibria. In addition, the model shows how it may be optimal for price-making firms to occasionally sell some of their electricity below marginal cost in order to de-incentivize price-taking firms from investing further into the market. Such strategic behaviour would not be captured by MCP or cost-minimisation models.

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“…The third group of approaches uses general non-cooperative games to model the interactions between prosumers and other participants. The corresponding approaches are [24], [27], [29], [47], [52], [57], [82], [92] and [99]. In [24], [29], [47] and [52], a non-cooperative game is played among all prosumers.…”

Section: Equilibrium Balancing With Flexibilitymentioning

confidence: 99%

A classification scheme for local energy trading

2022

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The current trend towards more renewable and sustainable energy generation leads to an increased interest in new energy management systems and the concept of a smart grid. One important aspect of this is local energy trading, which is an extension of existing electricity markets by including prosumers, who are consumers also producing electricity. Prosumers having a surplus of energy may directly trade this surplus with other prosumers, who are currently in demand. In this paper, we present an overview of the literature in the area of local energy trading. In order to provide structure to the broad range of publications, we identify key characteristics, define the various settings, and cluster the considered literature along these characteristics. We identify three main research lines, each with a distinct setting and research question. We analyze and compare the settings, the used techniques, and the results and findings within each cluster and derive connections between the clusters. In addition, we identify important aspects, which up to now have to a large extent been neglected in the considered literature and highlight interesting research directions, and open problems for future work.

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Examining the benefits of load shedding strategies using a rolling-horizon stochastic mixed complementarity equilibrium model

Abstract: As a result of government policies increasing the amount of electricity generated from fluctuating renewable sources in many countries

Cited by 15 publications

References 40 publications

The role of power-to-gas in the future energy system: Market and portfolio effects

The role of power-to-gas in the future energy system: Market and portfolio effects

Modelling an electricity market oligopoly with a competitive fringe and generation investments

A classification scheme for local energy trading

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