Article
Economics
Anselm Eicke, Oliver Ruhnau, Lion Hirth
Summary: This study views electricity balancing as a market where supply and demand determine the equilibrium price and quantity of imbalance energy. System operators provide imbalance energy while market participants' behavior affects the demand for imbalance energy. The research finds that in Germany, there is a significant decrease in demand for imbalance energy for each increase in the imbalance price by 1 euro per MWh.
Article
Energy & Fuels
Maren Ihlemann, Arne van Stiphout, Kris Poncelet, Erik Delarue
Summary: In the face of growing balancing requirements, there is increased interest in cross-border coordination of balancing capacity markets. This paper presents a model to simulate a joint day-ahead energy and balancing capacity market clearing, with coordinated procurement and sizing of balancing capacity, as well as co-optimized allocation of cross-zonal transmission capacity. The study demonstrates that regional coordination of balancing capacity markets can generate benefits, including more cost-effective scheduling of electricity production and a substantial reduction in the need for back-up capacity.
Article
Energy & Fuels
David Csercsik
Summary: In this paper, the effects of increasing levels of cooperation in reserve procurement and activation on economic benefits and network loads were analyzed using a simulation model. The results showed that the application of reserve demand netting is desirable and benefits tend to saturate with increasing number of cooperating zones. It was also suggested to facilitate the formation of multiple regional cooperation frameworks.
ENERGY STRATEGY REVIEWS
(2023)
Article
Economics
Callum MacIver, Waqquas Bukhsh, Keith R. W. Bell
Summary: The study reveals that increasing interconnection levels between Great Britain and its European neighbors have significant impacts on energy costs, imports, exports, and revenue potential for future interconnector projects. Additionally, inconsistencies in carbon pricing across countries can lead to counterproductive outcomes, such as reduced emissions in Great Britain but increased total emissions in Europe.
Article
Economics
Ryan C. Triolo, Frank A. Wolak
Summary: This study quantifies the economic and environmental impacts of transitioning from a zonal to nodal design in the Texas electricity market. The implementation of the nodal market design resulted in a 3.9% decrease in daily operating costs of thermal generation, but an increase in total heat input and CO2 emissions. The study also found that improving the efficiency of operation of coal and natural gas technologies can lead to cost savings.
Article
Economics
Anselm Eicke, Tim Schittekatte
Summary: Contrary to the uniform pricing within bidding zones in European power markets, nodal pricing in liberalized U.S. electricity markets has been increasingly considered as a potential solution due to its significant cost-saving benefits. However, the persistent opposition to nodal pricing in Europe is mainly based on perceived flaws of the concept, rather than practical justifications.
Article
Energy & Fuels
Callum MacIver, Keith R. W. Bell, Grain P. Adam, Lie Xu
Summary: This paper explores the means of providing enhanced security of supply to the wider electrical system through electrical interconnection, and discusses the primary motivations and technical options for new interconnector projects, as well as the ownership models, regulatory frameworks and market structures for investment cases. It further analyzes the potential impact of interconnectors on energy markets and connected markets, as well as the policy implications of new interconnector projects in the GB energy sector, suggesting a broader focus beyond consumer welfare in policy making. Additionally, it discusses the potential impact of the UK's withdrawal from the EU on future and existing interconnectors in Britain.
ENERGY STRATEGY REVIEWS
(2021)
Article
Automation & Control Systems
Jun Sun, Shibo Chen, Georgios B. Giannakis, Qinmin Yang, Zaiyue Yang
Summary: The increasing demand for data processing due to the emerging Internet of things and 5G applications has resulted in enormous energy consumption in data centers. This article investigates the optimal cross-SP workload balancing in data centers operated by different cloud service providers, aiming to reduce operation costs. Centralized and decentralized coordination methods were studied, with numerical results showing the effectiveness of the proposed algorithms in achieving cost savings.
IEEE TRANSACTIONS ON CONTROL OF NETWORK SYSTEMS
(2021)
Article
Energy & Fuels
Shuang Gao, Hailong Li, Yichen Hou, Jinyue Yan
Summary: This paper compares the potential benefits of integrating an electrical boiler (EB) and a heat pump (HP) in a combined heat and power plant (CHP). An optimization model is developed to maximize the profit of the operation of power-to-heat (P2H) assets and the CHP. The case study shows that integrating EB or HP can increase the annual profit of the CHP from providing frequency regulation, with HP offering greater benefits compared to EB.
Article
Energy & Fuels
E. Ruben van Beesten, Daan Hulshof
Summary: We investigate the economic incentives for short-term reductions of transmission capacities on interconnectors in a zonal international power market. Our analysis shows that transmission system operators often have incentives to reduce capacity on the interconnectors to neighboring countries in order to maximize domestic total welfare. The incentives exist even if one ignores balancing and focuses solely on welfare gains in the day-ahead market. Numerical experiments using a model of the Northern-European power system confirm these incentives and highlight the potential for welfare gains.
Article
Economics
Erik Lundin
Summary: This study evaluates the impact of the 2011 Swedish electricity market splitting reform on the allocation of wind power. The findings show that 18% of projects by large developers after the reform were allocated to the high price zone, while small developers did not react to the reform. Similar results were confirmed using a nearest neighbor matching estimator.
Article
Economics
Marten Ovaere, Michiel Kenis, Kenneth Van den Bergh, Kenneth Bruninx, Erik Delarue
Summary: The introduction of FBMC has positively affected day-ahead electricity price convergence and cross-border exchange volumes. However, these benefits have decreased over time, potentially due to decreased commercial transmission capacity on critical branches.
Article
Engineering, Electrical & Electronic
Mohammad Kiannejad, Mohammad Reza Salehizadeh, Majid Oloomi-Buygi, Luis Baringo
Summary: This paper presents an optimal offering strategy for photovoltaic (PV) power plants based on artificial neural networks (ANNs), which can be applied in both day-ahead (DA) and balancing markets. By combining the scenario-based approach and decentralized equivalent competitor concept, the proposed strategy effectively manages uncertainties faced by a PV plant in the electricity market. The results show that using this approach can increase the PV plant's profit by 9.6%, and by 2.5% when equipped with an energy storage system. The proposed approach demonstrates robustness against a high level of uncertainties, achieving 77% effectiveness in the worst case.
INTERNATIONAL JOURNAL OF ELECTRICAL POWER & ENERGY SYSTEMS
(2023)
Review
Green & Sustainable Science & Technology
Nicolas Fatras, Zheng Ma, Hongbo Duan, Bo Norregaard Jorgensen
Summary: The alignment between electricity market liberalisation and consumer participation is crucial for improving market efficiency, increasing system flexibility, and supporting the transition to a low-carbon electricity system. This paper examines the alignment status between market liberalisation properties and industrial consumer participation criteria in the Nordic region and China, and finds that the Nordic electricity market provides better participation incentives for cost savings, while the Chinese market offers easier adoption and better long-term financial overviews for consumers. Market context strongly influences the preferred market type for consumer participation, and market intervention is essential to ensure consumer-side market participation.
RENEWABLE & SUSTAINABLE ENERGY REVIEWS
(2022)
Article
Energy & Fuels
Christos Roumkos, Pandelis N. Biskas, Ilias G. Marneris
Summary: Achieving a fully integrated energy market under the EU electricity target model is an ongoing process. This paper provides an analytical review of the European balancing market integration, including the regulatory framework, design variables, and available market arrangements. Numerical examples and implementation projects by European transmission system operators are discussed. Moving towards a European-wide real-time balancing market is crucial to unlock the full potential of balancing market integration for the benefit of end-consumers.
Article
Economics
Marie-Louise Arlt, David Chassin, Claudio Rivetta, James Sweeney
Summary: This paper examines the impact of real-time pricing and load automation on residential distribution systems. The study finds that implementing real-time pricing can result in an aggregate welfare gain of 39 USD per customer and year. However, it also notes that RTP and load automation may significantly increase peak system load. Introducing a market-based demand management system can further enhance welfare gains and reduce grid investment.
Article
Economics
Javier Jorquera-Copier, Alvaro Lorca, Enzo Sauma, Stefan Lorenczik, Matias Negrete-Pincetic
Summary: As countries update their climate ambitions, low-carbon hydrogen production and use present opportunities for emissions reductions and economic development. A case study for Chile shows that integrating hydrogen and electricity networks can lower system costs and enhance renewable integration, but policy support is needed to address concerns related to water and land use.
Article
Economics
Dawit Guta, Hisham Zerriffi, Jill Baumgartner, Abhishek Jain, Sunil Mani, Darby Jack, Ellison Carter, Guofeng Shen, Jennifer Orgill-Meyer, Joshua Rosenthal, Katherine Dickinson, Rob Bailis, Yuta Masuda
Summary: Household solid fuel use is detrimental to health and the environment. The Indian government's PMUY subsidy has successfully promoted the adoption of LPG by millions of households. However, there is limited understanding of the decision-making process to reduce solid fuel use after transitioning to cleaner fuels. This study found that factors such as household wealth, social status, education level, and the prevalence of LPG use in the village are positively associated with LPG consumption and the discontinuation of solid fuel use. On the other hand, factors such as distance to LPG refill delivery, household size, and the PMUY subsidy are negatively associated with the share of LPG use.
Article
Economics
Nicolas Morell-Dameto, Jose Pablo Chaves-Avila, Tomas Gomez San Roman, Pablo Duenas-Martinez, Tim Schittekatte
Summary: This paper assesses the performance of differently implemented forward-looking network tariff designs and proposes an innovative coordination mechanism to increase predictability in a future with many flexible customers. The study reveals that if large shares of customers synchronize their responses to highly time-varying and locational-specific network charges, it can lead to unexpected reinforcements.
Article
Economics
Alexandra Gritz, Guntram Wolff
Summary: Russia's weaponization of gas supplies shook the energy security of Central and Eastern Europe in 2022. The region responded by increasing alternative energy supplies and developing new gas supply routes. Renewable energy, nuclear energy, and hydrogen play important roles in the long-term. Mitigating the impact of this shock requires the EU to prioritize the integrity of its energy market.
Article
Economics
Jaroslaw Kantorowicz, Marion Collewet, Matthew DiGiuseppe, Hendrik Vrijburg
Summary: Economic costs are a major political obstacle to investing in climate change mitigation and adaptation measures. The method of financing plays a crucial role in determining public opposition to government green investments, with debt financing being less opposed than broad-based taxes. This study suggests that credit market tools, such as green bonds and debt for climate swaps, can be politically efficient in increasing support for green financing. Carbon taxes and wealth taxes are found to be the most preferred options.
Article
Economics
Kun Guo, Liyuan Luan, Xiaoli Cai, Dayong Zhang, Qiang Ji
Summary: This paper investigates China's energy trade stability using a survival analysis approach. It finds that the energy trade linkages between China and 153 other countries are complex and unstable, with short periods of trade with many countries. Geopolitically risky regions, such as the Middle East and Africa, have the lowest trade stability. Climate risks have significant effects on energy trade stability. The paper proposes several policy options to improve energy trade stability in China, with special attention to increasing global climate risks.
Article
Economics
Simona Bigerna, Piyush Choudhary, Nikunj Kumar Jain, Silvia Micheli, Paolo Polinori
Summary: This study estimates the willingness to pay of Indian urban consumers for a continuous supply of electricity using contingent valuation method. The findings show that the amount consumers are willing to pay depends on the duration of power outages, with households preferring shorter outages. Income and environmental attitude also positively influence higher willingness to pay. These insights can inform policymakers in designing more reliable and customer-centric energy generation and distribution models.
Article
Economics
Temilade Sesan, Unico Uduka, Lucy Baker, Okechukwu Ugwu, Ewah Eleri, Subhes Bhattacharyya
Summary: This study examines the impact of the regulatory framework on rural electrification and universal energy access goals in Nigeria's mini-grid sector. The findings suggest that while the current framework has fostered sector growth, additional measures are necessary to ensure equitable distribution of access among rural populations.
Article
Economics
Rui Shan, Noah Kittner
Summary: Energy storage is a cornerstone in decarbonization planning as it reduces operational costs and greenhouse gas emissions, while enhancing resilience and renewables integration. However, storage developers in different regions have varying economic and environmental considerations, thereby requiring policy intervention to achieve long-term emission reductions.
Article
Economics
Tung Durmaz, Sevil Acar, Simay Kizilkaya
Summary: This study investigates the phenomenon of strategic capacity withholding in the Turkish electricity market and its relationship with the capacity remuneration mechanism. The empirical results provide strong evidence of strategic capacity withholding and show that the capacity mechanism contributes to the duration of failures. The study offers important insights for policymakers, including the implementation of a random verification mechanism and restructuring of the capacity mechanism in Turkey.
Article
Economics
Tii N. Nchofoung
Summary: The study finds that oil price shocks have a negative impact on Africa's energy transition, particularly in rural areas and net crude oil exporting countries. However, oil price shocks cannot explain the urban-rural differences in clean energy access. Therefore, increasing investment in clean energy and technologies in rural areas is necessary to enhance the resilience of the energy sector to oil price shocks.
Article
Economics
Najia Saqib, Muhammad Usman, Ilhan Ozturk, Arshian Sharif
Summary: This study examines the impact of environmental technologies, financial growth, and energy use on ecological footprint and green growth. Environmental innovation and renewable energy deployment contribute to green growth, while financial expansion and non-renewable energy use have negative effects on the environment. The study also identifies causal relationships between different factors.
Article
Economics
Yessica C. Y. Chung, Noxolo Kunene, Hung-Hao Chang
Summary: The Renewable Energy Certificate (REC) is considered an innovative technology for building a green society. This study investigates the impact of REC purchases on stock return and volume in Taiwan between 2017 and 2021. The findings suggest that REC purchases have a positive effect on stock returns of manufacturing firms but not service firms. The frequency of REC purchases is also an important factor in the relationship between REC purchase and firm value. Additionally, the study reveals that public attention to environmental pollution plays a crucial role in positive stock returns and volume, while ESG disclosure is negatively associated with returns and volume.
Article
Economics
Seife Ayele, Wei Shen, Yacob Mulugetta, Tadesse Kuma Worako
Summary: This paper addresses the challenges of governing energy procurement from a mix of non-hydropower renewable energy sources supplied by independent producers. Building on political economy analysis and five case studies of independent producer projects from Ethiopia, it seeks to understand the root causes of the protracted delays and limited extent of procurement by independent producers. The key contestations lie in managing long term contracts, risk, uncertainty and in developing the institutional and human capacity to transition.