Pricing of reserves: Valuing system reserve capacity against spot prices in electricity markets

Just, Sebastian

doi:10.1016/j.eneco.2008.05.004

Cited by 61 publications

(47 citation statements)

References 24 publications

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“…Less required incremental secondary reserve capacity has an impact on spot market prices as less generation capacity is effectively withdrawn from the spot markets. This issue is discussed in more detail in Just and Weber (2008) and Just (2011). Applying the secondary reserve market equilibrium model with parameters for the German market used in Just (2011), the resulting dampening effect on the average spot price is estimated at about 0.20 €/MWh.…”

Section: Figure 12: Impact Of Strategic Behavior On Imbalance Distribmentioning

confidence: 99%

Strategic behavior in the German balancing energy mechanism: incentives, evidence, costs and solutions

Just

2015

J Regul Econ

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in EconStor may ABSTRACTThis paper investigates the incentives market participants have in the German electricity balancing mechanism. Strategic over-and undersupply positions are the result of existing stochastic arbitrage opportunities between the spot market and the balancing mechanism. This strategic behavior can be clearly identified in aggregate market data. These structural imbalances increase the need for reserve capacity, raise system security concerns, and thus burden significant cost on the customers. More effective market designs include changes in the balancing mechanism, the reserve capacity and the intraday spot markets.JEL classification: L94, Q41, Q47

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Section: Figure 12: Impact Of Strategic Behavior On Imbalance Distribmentioning

confidence: 99%

Strategic behavior in the German balancing energy mechanism: incentives, evidence, costs and solutions

Just

2015

J Regul Econ

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“…The paper is organized as follows: In section 2, the market for reserve capacity in Germany is explained. The model of Just and Weber (2008) is summarized in section 3, including a discussion how the theoretical framework can be applied to other reserve qualities. In section 4, the efficiency implications for different contract durations are investigated based on a specific data set describing roughly the German market.…”

Section: Introductionmentioning

confidence: 99%

“…Additionally, we show that the opportunity costs character of the reserve market implies sufficient incentives for supplying reserve capacity. Clear economical arguments and insights are developed while building on a theoretical framework by Just and Weber (2008) that models the basic economics of providing system reserve capacity. The paper focuses on primary and secondary reserve capacity.…”

Section: Introductionmentioning

confidence: 99%

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Appropriate contract durations in the German markets for on-line reserve capacity

Just

2011

J Regul Econ

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. (2008) for reserve markets. It reveals the implicit trade-off for the bidders and interdependencies between the reserve and the spot markets. The results clearly show that shorter periods (with resulting lower variations in overall electricity demand) lead to more efficient dispatch and market results. Not only prices in the reserve capacity markets are expected to be lower, but also spot market prices. As these benefits can be partially reaped by owners of large generation portfolios also under longer contract durations, it discriminates smaller generation companies and can potentially deter market participation. Further, the paper discusses security concerns against shorter contract durations. It is shown that the opportunity costs character of the reserve market implies sufficient incentives for supplying online reserve capacity. The concerns do not appear to be predominant and it should be possible to manage them appropriately. Terms of use: Documents in

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“…Hence, additional benefit of PV-SAC technology is the utilisation of electricity reserves. The price of long-term electricity reserves is 30 Euro/MWh [4] up to 80 Euro/MWh [5]. The long-term simulation shows that the peak cooling demand is lasting for several weeks a year.…”

Section: Financial Profitability Assessmentmentioning

confidence: 94%

Performance Evaluation of Photovoltaic Solar Air Conditioning

Snegirjovs

Shipkovs

Ļebedeva

et al. 2016

Latvian Journal of Physics and Technical Sciences

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Information on the electrical-driven solar air conditioning (SAC) is rather scanty. A considerable body of technical data mostly concerns largescale photo-voltaic solar air conditioning (PV-SAC) systems. Reliable information about the energy output has arisen only in recent years; however, it is still not easily accessible, and sometimes its sources are closed. Despite these facts, solar energy researchers, observers and designers devote special attention to this type of SAC systems. In this study, performance evaluation is performed for the PV-SAC technology, in which low-power (up to 15 kW p of cooling power on average) systems are used. Such a system contains a PV electric-driven compression chiller with cold and heat sensible thermal storage capacities, and a rejected energy unit used for preheating domestic hot water (DHW). In a non-cooling season, it is possible to partly employ the system in the reverse mode for DHW production. In this mode, the ambient air serves as a heat source. Besides, free cooling is integrated in the PV-SAC concept.

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Pricing of reserves: Valuing system reserve capacity against spot prices in electricity markets

Cited by 61 publications

References 24 publications

Strategic behavior in the German balancing energy mechanism: incentives, evidence, costs and solutions

Strategic behavior in the German balancing energy mechanism: incentives, evidence, costs and solutions

Appropriate contract durations in the German markets for on-line reserve capacity

Performance Evaluation of Photovoltaic Solar Air Conditioning

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