Variable Renewable Energy and Market Design: New Products and a Real-World Study

Most existing energy markets (EMs) were not designed to take into account an active participation of variable renewable energy (VRE). This situation results typically in imbalances and substantial costs in balancing markets. Such costs are reflected both in the energy and the VRE parts of the consum...

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Bibliographic Details
Published in:Energies (Basel) 2019-11, Vol.12 (23), p.4576
Main Authors: Algarvio, Hugo, Lopes, Fernando, Couto, António, Estanqueiro, Ana, Santana, João
Format: Article
Language:English
Subjects:
Alternative energy sources
Capital costs
Electric power systems
Electricity
Electronic commerce
Energy
Energy industry
Marginal pricing
Prices
Schedules
Wind power
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Summary:Most existing energy markets (EMs) were not designed to take into account an active participation of variable renewable energy (VRE). This situation results typically in imbalances and substantial costs in balancing markets. Such costs are reflected both in the energy and the VRE parts of the consumer tariffs. Both appropriate market products and new elements of market design may largely facilitate the large-scale integration of VRE in EMs. Accordingly, this article presents a new bilateral energy contract and introduces two new marketplaces that can contribute to reduce the imbalances resulting from VRE producers. It also presents a study conducted with the help of an agent-based tool, called MATREM. The results indicate a significant decrease in the imbalances and the associated costs.
ISSN:1996-1073
1996-1073
DOI:10.3390/en12234576