Incentive Compatible Imbalance Settlement

Häring, Tobias; Kirschen, Daniel; Andersson, Göran

doi:10.1109/tpwrs.2014.2387947

Cited by 23 publications

(19 citation statements)

References 26 publications

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“…This can result in some parties free-riding (benefiting from a good, without paying for it), which is a clear market failure [32]. This may the case with DR, if DR bought by a retailer, to reduce imbalance, also benefits a distribution network operator, by relieving congestion This can also include indirect free-riding, such as when insufficiently costreflective imbalance penalties fail to penalise undesirable behaviour of DR providers or aggregators, resulting in the costs that are not recovered by the imbalance penalties being socialised (spread) over all system users [33].…”

Section: Imperfect Competitionmentioning

confidence: 99%

Review and classification of barriers and enablers of demand response in the smart grid

Good

Ellis

Mancarella

2017

Renewable and Sustainable Energy Reviews

234

162

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Demand for flexibility in electricity systems and the transition to the Smart Grid is increasing opportunities for demand response (DR). However, there are many barriers which prevent the full potential of DR being realised. Unlocking of this potential, through identification of DR enablers, can be aided through systematic classification and analysis of DR barriers. To this end, while previous works mostly focused on individual aspects, this paper develops a comprehensive 'socio-techno-economic' review, classification and analysis of DR barriers and enablers in a Smart Grid context. This provides an intellectual framework which may be used to underpin further work on the study and integration of DR. DR barriers are classified as either fundamental (i.e., relating to intrinsic human nature/essential enabling technology) or secondary (i.e., relating to anthropogenic institutions/or system feedbacks). Fundamental barriers are defined as economic, social or technological, whilst secondary barriers relate to political regulatory aspects, design of markets, physical (electrical network) issues, or to general understanding of DR. Subsequently, associated enablers for the defined barriers are suggested. Consideration of technical and commercial/social aspects for both power system and information and communication technology (the "internet of things") domains provides a foundational contribution to improve understanding of DR within the Smart Grid paradigm. Finally, the complexity resulting from connections between various barriers, enablers and the energy system generally, and the existence of the signature characteristics of complex systems is acknowledged and implications discussed.

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Section: Imperfect Competitionmentioning

confidence: 99%

Review and classification of barriers and enablers of demand response in the smart grid

Good

Ellis

Mancarella

2017

Renewable and Sustainable Energy Reviews

234

162

View full text Add to dashboard Cite

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“…Expanding the analysis of potential strategies to include prices on neighboring markets, Scherer et al (2015) show that the interplay between rules for cross-border trading and national imbalance pricing (a dual pricing scheme) create good profit opportunities for Swiss Balance Responsible Parties willing to act strategically. Differently, Haring et al (2015) propose an original imbalance settlement scheme (different from those currently used in Europe) which responds to a number of specific objectives. Among other things, the authors are concerned with limiting opportunities for price-related strategies and the subsequent reduction of market liquidity (and increased opportunities to exercise market power).…”

Section: Imbalance Drivers: a Conceptual Frameworkmentioning

confidence: 99%

“…The majority of existing work exploring imbalance pricing schemes studies the strategies that a market agent might adopt to exploit arbitrage opportunities in a specific market setting (Boogert and Dupont, 2005;Wawer, 2007;Möller et al, 2011;Scherer et al, 2015;Haring et al, 2015;and Just and Weber, 2015). By simulating a number of these potential strategies against a set of real (or test) market data, these papers unanimously suggest that an agent's programming decision is potentially driven not only by her responsibility to be balanced, but also by the incentives embedded in local (and neighboring) market design.…”

Section: Introductionmentioning

confidence: 99%

The effect of price regulation on energy imbalances: A Difference in Differences design

Clò

Fumagalli

2019

Energy Economics

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“…Favored by ambitious plans for high quality market-related data, it is strongly believed that understanding the role of forecast information and their status, being public or private, can have a crucial impact on electricity market functioning. To this end, it is highly relevant to account for incentive-compatible mechanisms, such as mechanism design [32] or consensusbased distributed market clearing [33], which can elicit truthful decisions from market's parties, increasing the transparency of the electricity market.…”

Section: Conclusion and Prospectsmentioning

confidence: 99%

Impact of Public Aggregate Wind Forecasts on Electricity Market Outcomes

Exizidis

Kazempour

Grève

et al. 2017

IEEE Trans. Sustain. Energy

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Abstract-Following a call to foster a transparent and more competitive market, member states of the European transmission system operator are required to publish, among other information, aggregate wind power forecasts. The publication of the latter information is expected to benefit market participants by offering better knowledge of the market operation, leading subsequently to a more competitive energy market. Driven by the above regulation, we consider an equilibrium study to address how public information of aggregate wind power forecasts can potentially affect market results, social welfare as well as the profits of participating power producers. We investigate, therefore, a joint day-ahead energy and reserve auction, where producers offer their conventional power strategically based on a complementarity approach and their wind power at generation cost based on a forecast. In parallel, an iterative game-theoretic approach (diagonalization) is incorporated in order to investigate the existence of an equilibrium for various values of aggregate forecast. As anticipated, variations in public forecasts will affect market results and, more precisely, under-forecasts can mislead power producers to make decisions that favor social welfare, while over-forecasts will cause the opposite effect. Furthermore, energy and reserve market prices can also be affected by deviations in aggregate wind forecasts altering, inevitably, the profits of all power producers.

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Incentive Compatible Imbalance Settlement

Cited by 23 publications

References 26 publications

Review and classification of barriers and enablers of demand response in the smart grid

Review and classification of barriers and enablers of demand response in the smart grid

The effect of price regulation on energy imbalances: A Difference in Differences design

Impact of Public Aggregate Wind Forecasts on Electricity Market Outcomes

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