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The impact of transparency policies on local flexibility markets in electrical distribution networks: A case study with artificial neural network forecasts

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  • Erik Heilmann

    (University of Kassel)

Abstract

The energy transition brings various challenges of technical, economic and organizational nature. One major topic, especially in zonal electricity systems, is the organization of future congestion management. Local flexibility market (LFM) is an often discussed concept of market-based congestion management. Similar to the whole energy system, the market transparency of LFMs can influence the individual bidders' behavior. In this context, the predictability of the network status and an LFM's outcome, depending on a given transparency policy, is investigated in this paper. For this, forecast models based on artificial neural networks (ANN) are implemented on synthetical network and LFM data. Three defined transparency policies determine the amount of input data used for the models. The results suggest that the transparency policy can influence the predictability of network status and LFM outcome, but appropriate forecasts are generally feasible. Therefore, the transparency policy should not conceal information but provide a level playing field for all parties involved. The provision of semi-disaggregated data on the network area level can be suitable for bidders' decision making and reduces transaction costs.

Suggested Citation

  • Erik Heilmann, 2021. "The impact of transparency policies on local flexibility markets in electrical distribution networks: A case study with artificial neural network forecasts," MAGKS Papers on Economics 202141, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
  • Handle: RePEc:mar:magkse:202141
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    References listed on IDEAS

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    Cited by:

    1. Erik Heilmann & Nikolai Klempp & Kai Hufendiek & Heike Wetzel, 2022. "Long-term Contracts for Network-supportive Flexibility in Local Flexibility Markets," MAGKS Papers on Economics 202224, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).

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    More about this item

    Keywords

    Local flexibility markets; Market transparency; Transparency policy; Artificial neural network forecast;
    All these keywords.

    JEL classification:

    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
    • L98 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Government Policy
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • Q47 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy Forecasting

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