The regulating power market on the Nordic power exchange Nord Pool: an econometric analysis

Skytte, Klaus

doi:10.1016/s0140-9883(99)00016-x

Cited by 110 publications

(85 citation statements)

References 3 publications

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“…Regulation of positive and negative imbalances translates to penalties for the market participants, defined as the volume of electricity in imbalance times the imbalance price. These imbalance prices are different for positive and negative imbalances, and highly variable, being a function of the power volume that needs to be regulated globally in the system, supposed to reflect the production (or curtailment) costs, and including a premium for readiness [11]. As a consequence in such market environment, the profit of the power producer is defined as the revenue obtained from the day-ahead market minus the penalties resulting from imbalance regulation costs (see revenue formulation in e.g.…”

Section: Imbalance Management In a Market Environmentmentioning

confidence: 99%

“…Therefore ideally, a market participant using a wind/EES should slightly reduce his bid from the wind power point forecasts in order to ensure there will be more energy stored than released, which in terms of positive and negative imbalances would result in even volumes. In order to assess the economic feasibility of the methodology, the operation of the combined wind/EES plant for the 1 year is simulated, for 20 possibilities for EES sizing: (1) no storage, (2)(3)(4)(5)(6)(7)(8)(9)(10)(11)(12)(13)(14)(15)(16)(17)(18)(19) dynamic EES sizing based on the 17 quantiles rising from 15% to 95%, thus for risk parameters going from 5% till 85%, with 5% increment, and the 99% quantile (α = 1%, very low risk exposure), (20) infinite storage 4 . Each of these scenarios corresponds to a different strategy that the wind producer may follow for hedging wind power forecast uncertainty.…”

Section: Case Studymentioning

confidence: 99%

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Dynamic sizing of energy storage for hedging wind power forecast uncertainty

Pinson

Papaefthymiou

Klöckl

et al. 2009

2009 IEEE Power &Amp; Energy Society General Meeting

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Section: Imbalance Management In a Market Environmentmentioning

confidence: 99%

Section: Case Studymentioning

confidence: 99%

Dynamic sizing of energy storage for hedging wind power forecast uncertainty

Pinson

Papaefthymiou

Klöckl

et al. 2009

2009 IEEE Power &Amp; Energy Society General Meeting

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“…When it comes to balancing market prices, no survey exists to our knowledge. However, case studies exist, including Skytte [19], Fleten and Pettersen [9],Olsson and Söder [17], Jaehnert et al [12], Brolin and Söder [2] and Boomsma et al [1] -all of them from the Nordic market. The contribution of this article is a systematic review and benchmarking of time series based methods for balancing market price forecasting.…”

mentioning

confidence: 99%

Benchmarking time series based forecasting models for electricity balancing market prices

2013

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In the trade-off between bidding in the day-ahead electricity market and the real time balancing market, producers need good forecasts for balancing market prices to make informed decisions. A range of earlier published models for forecasting of balancing market prices, including a few extensions, is benchmarked. The models are benchmarked both for one hour-ahead and dayahead forecast, and both point and interval forecasts are compared. None of the benchmarked models produce informative day-ahead point forecasts, suggesting that information available before the closing of the day-ahead market is efficiently reflected in the day-ahead market price rather than the balancing market price. Evaluation of the interval forecasts reveals that models without balancing state information overestimate variance, making them unsuitable for scenario generation.

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“…Therefore, there will be no model that suits all balancing price processes. This explains why Skytte [39] finds that the balancing price can be explained by the dayahead market price, while Jaehnert et al [40] results indicate no correlation between the spot and balancing prices. Jaehnert et al [40] model the balancing price as the difference to the day-ahead market price, while both Olsson and Soder [41] and Klaeboe et al [42] model it directly including correlation with the spot price.…”

Section: Balancing Pricementioning

confidence: 96%

Investment in electric energy storage under uncertainty: a real options approach

et al. 2016

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Problem descriptionThe growing portion of renewables in the generation mix has led to an increasing need for ancillary services in the electricity grid. As a part of this green shift, the role of storage in the electricity market has changed. Traditionally, the motivation for investing in storage was based on time arbitrage of the spot price. Today, the investments in storage are being linked with the need for improving the power quality and balancing the grid.Recent research papers point out that investments in small storage facilities are not profitable today without public support. This thesis will apply the real options framework, and investigate the profitability of energy storage under uncertain electricity prices, balancing prices and investment cost. It will further consider how policy makers can trigger investments in electric energy storage. PrefaceThis is a master thesis written within the field of Financial Engineering at the Department of Industrial Economics and Technology Management, Norwegian University of Science and Technology (NTNU). We would like to thank our supervisors, Verena Hagspiel and Stein-Erik Fleten, for professional guidance throughout the project. We also wish to thank Professor Sonja Wogrin at Universidad Pontificia Comillas de Madrid for technical assistance, PhD candidate Lars Ivar Hagfors at NTNU for valuable input and Statkraft for providing market data. Trondheim, 8th of June 2015Ida BakkeBeate Norheim AbstractThe transition from conventional power sources to renewable energy sources is taking place in a number of European countries. Electric energy storage has been proposed as an environmentally friendly solution to make this transition possible. This thesis analyzes the profitability of investing in a battery bank in Germany and the UK, using a real options model. The model determines the option value and the optimal investment time, under the conditions of uncertain revenues and investment cost. The results show that it is profitable to invest in both countries, given that the battery banks can participate in both the spot and balancing market. The valuation also gives insight into how the battery bank should be operated between the two markets to maximize its expected profits and discovers that the battery earns over 70 % of its profit from ancillary services. This finding underlines the importance for investors to not only consider revenues from the spot market. The thesis further analyzes how uncertainty affects investor behavior and explains why there is a reluctance to invest in storage technology under the current market conditions; the investor is favoring the option to wait for more information. SammendragOvergangen fra konvensjonelle energikilder til fornybare energikilder finner sted i en rekke europeiske land. Elektrisk energilagring har blitt foreslått som en miljøvennlig løsning forå gjøre denne overgangen mulig. I denne masteroppgaven utvikler vi en realopsjonsmodel for a analysere lønnsomheten vedå investere i batteribanker i Storbritannia og Tyskland. Mode...

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The regulating power market on the Nordic power exchange Nord Pool: an econometric analysis

Cited by 110 publications

References 3 publications

Dynamic sizing of energy storage for hedging wind power forecast uncertainty

Dynamic sizing of energy storage for hedging wind power forecast uncertainty

Benchmarking time series based forecasting models for electricity balancing market prices

Investment in electric energy storage under uncertainty: a real options approach

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