The Experts below are selected from a list of 2364 Experts worldwide ranked by ideXlab platform
Tanguy Janssen - One of the best experts on this subject based on the ideXlab platform.
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capacity adequacy in power markets facing energy transition a comparison of Scarcity Pricing and capacity mechanism
Energy Policy, 2017Co-Authors: Marie Petitet, Dominique Finon, Tanguy JanssenAbstract:This article analyses how a capacity mechanism can address security of supply objectives in a power market undergoing an energy transition that combines energy efficiency efforts to stabilise demand and a rapid increase in the proportion of renewables. To analyse this situation, power markets are simulated over the long term with a System Dynamics model integrating new investment and closure decisions. This last trait is relevant to studying investment in power generation in mature markets undergoing policy shocks. The energy-only market design with a price cap, with and without a capacity mechanism, is compared to Scarcity Pricing in two investment behaviour scenarios with and without risk aversion. The results show that the three market designs lead to different levels of risk for peaking unit investment and results thus differ according to which risk aversion hypothesis is adopted. Assuming a risk-neutral investor, the results indicate that compared to an energy-only market with a price cap at 3 000 €/MWh, an energy-only market with Scarcity Pricing and the market design with a capacity mechanism are two efficient options to reach similar levels of load loss. But under the hypothesis of risk aversion, the results highlight the advantage of the capacity mechanism over Scarcity Pricing.
Dominique Finon - One of the best experts on this subject based on the ideXlab platform.
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capacity adequacy in power markets facing energy transition a comparison of Scarcity Pricing and capacity mechanism
Energy Policy, 2017Co-Authors: Marie Petitet, Dominique Finon, Tanguy JanssenAbstract:This article analyses how a capacity mechanism can address security of supply objectives in a power market undergoing an energy transition that combines energy efficiency efforts to stabilise demand and a rapid increase in the proportion of renewables. To analyse this situation, power markets are simulated over the long term with a System Dynamics model integrating new investment and closure decisions. This last trait is relevant to studying investment in power generation in mature markets undergoing policy shocks. The energy-only market design with a price cap, with and without a capacity mechanism, is compared to Scarcity Pricing in two investment behaviour scenarios with and without risk aversion. The results show that the three market designs lead to different levels of risk for peaking unit investment and results thus differ according to which risk aversion hypothesis is adopted. Assuming a risk-neutral investor, the results indicate that compared to an energy-only market with a price cap at 3 000 €/MWh, an energy-only market with Scarcity Pricing and the market design with a capacity mechanism are two efficient options to reach similar levels of load loss. But under the hypothesis of risk aversion, the results highlight the advantage of the capacity mechanism over Scarcity Pricing.
Raul Bajobuenestado - One of the best experts on this subject based on the ideXlab platform.
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operating reserve demand curve Scarcity Pricing and intermittent generation lessons from the texas ercot experience
Energy Policy, 2021Co-Authors: Raul BajobuenestadoAbstract:Abstract Resolving the resource adequacy problem has been usually entrusted to the imposition of some kind of long-term capacity requirements or to forward markets. The Operating Reserve Demand Curve (ORDC), which is linked to short-term market conditions and does not require central planning, has been presented as an alternative system with which to ensure long-term resource adequacy in the market. Using hourly data from the Texas ERCOT market between January 2015 and February 2019, we empirically show that ORDC prices are significantly negatively affected by wind generation. We find that, if wind generation is relatively low, a 1% increase in wind generation decreases the ORDC price by around 0.15–0.1%. This fact may preclude the ORDC from providing long-term price signals and price stability to generators. Moreover, we also find that if wind generation is greater than 9000 MW, the ORDC price is expected to be zero, which may further disincentive to increase generation capacity –especially dispatchable capacity that may be needed as a backup if the wind is not blowing.
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operating reserve demand curve Scarcity Pricing and intermittent generation lessons from the texas ercot experience
Meeting the Energy Demands of Emerging Economies 40th IAEE International Conference June 18-21 2017, 2019Co-Authors: Raul BajobuenestadoAbstract:Resolving the resource adequacy problem has been usually entrusted to the imposition of some kind of long-term capacity requirements or to forward markets. The Operating Reserve Demand Curve (ORDC), which is linked to short-term market conditions and does not require central planning, has been presented as an alternative system with which to ensure resource adequacy. Using hourly data from the Texas ERCOT market, we empirically show that ORDC prices are significantly negatively affected by wind generation. We find that, if wind generation is relatively low, a 1% increase in wind generation decreases the ORDC price by around 0.2-0.1%. Moreover, if wind generation is greater than 8,000-9,000 MW, the ORDC price is expected to be zero. This may preclude investors from obtaining clearly perceivable long-term price signals, such as capacity requirements intent.
Marie Petitet - One of the best experts on this subject based on the ideXlab platform.
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capacity adequacy in power markets facing energy transition a comparison of Scarcity Pricing and capacity mechanism
Energy Policy, 2017Co-Authors: Marie Petitet, Dominique Finon, Tanguy JanssenAbstract:This article analyses how a capacity mechanism can address security of supply objectives in a power market undergoing an energy transition that combines energy efficiency efforts to stabilise demand and a rapid increase in the proportion of renewables. To analyse this situation, power markets are simulated over the long term with a System Dynamics model integrating new investment and closure decisions. This last trait is relevant to studying investment in power generation in mature markets undergoing policy shocks. The energy-only market design with a price cap, with and without a capacity mechanism, is compared to Scarcity Pricing in two investment behaviour scenarios with and without risk aversion. The results show that the three market designs lead to different levels of risk for peaking unit investment and results thus differ according to which risk aversion hypothesis is adopted. Assuming a risk-neutral investor, the results indicate that compared to an energy-only market with a price cap at 3 000 €/MWh, an energy-only market with Scarcity Pricing and the market design with a capacity mechanism are two efficient options to reach similar levels of load loss. But under the hypothesis of risk aversion, the results highlight the advantage of the capacity mechanism over Scarcity Pricing.
Anthony Papavasiliou - One of the best experts on this subject based on the ideXlab platform.
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modelling cross border interactions of eu balancing markets a focus on Scarcity Pricing
2021Co-Authors: Anthony PapavasiliouAbstract:Abstract The goal of Scarcity Pricing is to reflect more accurately the incremental value of reserve capacity in real-time operations, and thereby create a more favorable environment for investment in resources that can offer reserve services to the system. Scarcity Pricing has recently been expanded in various US markets and is being increasingly considered as a viable option forward for EU market design. The consideration of Scarcity Pricing by certain EU member states raises the question of how a unilateral implementation of the mechanism might affect neighboring markets. We present a simple stochastic equilibrium model for understanding the effects of a unilateral implementation of Scarcity Pricing on a two-zone illustrative example. We focus specifically on the implications of Scarcity Pricing on balancing market equilibrium and the back-propagation of Scarcity adders in day-ahead markets. We comment on the insights derived from the model, and their institutional relevance.
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Scarcity Pricing and the missing european market for real time reserve capacity
The Electricity Journal, 2020Co-Authors: Anthony PapavasiliouAbstract:Abstract Scarcity Pricing is a valuable step towards the evolution of electricity markets that rely increasingly on reserves for enabling the large-scale penetration of renewable resources. A real-time market for reserve capacity is essential in the implementation of Scarcity Pricing, in order to enable the back-propagation of the value of reserve capacity to forward markets for energy and reserve. Such a market for real-time reserve capacity does not exist currently in Europe. Consequently, the existing design of the European balancing market creates challenges for the valuation of reserves. We argue that the implementation of a real-time market for reserve capacity can be aligned with European legislation, and we describe how Scarcity Pricing based on operating reserve demand curves can be integrated in such a design. We discuss the ongoing Scarcity Pricing debate in Belgium, and highlight various implementation challenges.
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Market Design Options for Scarcity Pricing in European Balancing Markets
IEEE Transactions on Power Systems, 2024Co-Authors: Anthony Papavasiliou, Gilles BertrandAbstract:The European balancing market is undergoing radical transformation through numerous market design initiatives. These initiatives aim at improving geographical coordination among European transmission system operators, and better positioning the European system for integrating renewable resources through short-term operational efficiency and long-term investment in flexible resources. However, the European design is characterized by a missing market for real-time reserve capacity, that has been inherited from a failure to recognize the central role of real-time operations as the spot market of the electric power industry. This missing market undermines the valuation of reserve capacity, and the back-propagation of price signals to forward reserve markets that can support investment in reserves. The goal of the present paper is to develop a methodology that exposes the implications of this missing market. The methodology relies on analytical insights that can be derived under an assumption of price-taking behavior. These insights are validated by a simulation model which represents the European balancing market as a Markov Decision Process. The simulation model is used for validating the analytical insights and testing the ability of various balancing market design options to back-propagate the real-time value of reserve to forward reserve markets.
