Enabling Active/Passive Electricity Trading in Dual-Price Balancing Markets

In electricity markets with a dual-pricing scheme for balancing energy, controllable production units typically participate in the balancing market as "active" actors by offering regulating energy to the system, while renewable stochastic units are treated as "passive" participan...

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Published inIEEE transactions on power systems Vol. 34; no. 3; pp. 1980 - 1990
Main Authors Mazzi, Nicolo, Trivella, Alessio, Morales, Juan M.
Format Journal Article
LanguageEnglish
Published New York IEEE 01.05.2019
The Institute of Electrical and Electronics Engineers, Inc. (IEEE)
Subjects
Balancing
balancing market
Electricity
Electricity markets
Electricity pricing
Electricity supply industry
Generators
Innovations
Markets
offering strategy
Power generation
Prices
Production
Renewable energy sources
Schedules
Stochastic processes
stochastic programming
virtual power plant
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Abstract In electricity markets with a dual-pricing scheme for balancing energy, controllable production units typically participate in the balancing market as "active" actors by offering regulating energy to the system, while renewable stochastic units are treated as "passive" participants that create imbalances and are subject to less competitive prices. Against this background, we propose an innovative market framework whereby the participant in the balancing market is allowed to act as an active agent (i.e., a provider of regulating energy) in some trading intervals and as a passive agent (i.e., a user of regulating energy) in some others. To illustrate and evaluate the proposed market framework, we consider the case of a virtual power plant (VPP) that trades in a two-settlement electricity market composed of a day-ahead and a dual-price balancing market. We formulate the optimal market offering problem of the VPP as a three-stage stochastic program, where uncertainty is in the day-ahead electricity prices, balancing prices and the power output from the renewable units. Computational experiments show that the VPP expected revenues can increase substantially compared to an active-only or passive-only participation, and in the paper, we discuss how the variability of the stochastic sources affects the balancing market participation choice.
AbstractList In electricity markets with a dual-pricing scheme for balancing energy, controllable production units typically participate in the balancing market as "active" actors by offering regulating energy to the system, while renewable stochastic units are treated as "passive" participants that create imbalances and are subject to less competitive prices. Against this background, we propose an innovative market framework whereby the participant in the balancing market is allowed to act as an active agent (i.e., a provider of regulating energy) in some trading intervals and as a passive agent (i.e., a user of regulating energy) in some others. To illustrate and evaluate the proposed market framework, we consider the case of a virtual power plant (VPP) that trades in a two-settlement electricity market composed of a day-ahead and a dual-price balancing market. We formulate the optimal market offering problem of the VPP as a three-stage stochastic program, where uncertainty is in the day-ahead electricity prices, balancing prices and the power output from the renewable units. Computational experiments show that the VPP expected revenues can increase substantially compared to an active-only or passive-only participation, and in the paper, we discuss how the variability of the stochastic sources affects the balancing market participation choice.
Author Morales, Juan M.
Mazzi, Nicolo
Trivella, Alessio
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Snippet In electricity markets with a dual-pricing scheme for balancing energy, controllable production units typically participate in the balancing market as "active"...
In electricity markets with a dual-pricing scheme for balancing energy, controllable production units typically participate in the balancing market as “active”...
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SubjectTerms Balancing
balancing market
Electricity
Electricity markets
Electricity pricing
Electricity supply industry
Generators
Innovations
Markets
offering strategy
Power generation
Prices
Production
Renewable energy sources
Schedules
Stochastic processes
stochastic programming
virtual power plant
Title Enabling Active/Passive Electricity Trading in Dual-Price Balancing Markets
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