IDEAS home Printed from https://ideas.repec.org/a/eee/appene/v235y2019icp564-577.html
   My bibliography  Save this article

Nodal market power assessment of flexible demand resources

Author

Listed:
  • Shang, Nan
  • Lin, You
  • Ding, Yi
  • Ye, Chengjin
  • Yan, Jinyue

Abstract

With the incorporation of higher shares of intermittent renewable energies (RES), more flexible resources are required in power systems to keep load balance. Under some extreme circumstances, the flexible demand resources (FDRs) may have the potential to dominate and obtain excess benefits, preventing other FDRs from participating in the electricity markets. Therefore, it is of great significance to identify the key FDR market power locations and implement some corresponding regulations. However, the relevant researches in power systems focused on the supply side, rather than the demand side. In this paper, a novel nodal market power analysis method is proposed to evaluate the potential influence of FDRs on electricity markets. Firstly, a multi-state model is established to present the multiple power system operation states including the random failures of system components. Then, the nodal market power assessment model is established under each specific state and new indices are proposed to evaluate the nodal market power of FDRs quantitatively. Furthermore, the key FDR nodes in demand side with stronger power in capturing excess revenue are identified. The 24-bus IEEE Reliability Test System is modified to demonstrate the feasibility of the proposed method. The numerical results of the proposed method are capable to display the existence of market power in demand side, and provide some valuable guidance for classification and operation of electricity markets.

Suggested Citation

  • Shang, Nan & Lin, You & Ding, Yi & Ye, Chengjin & Yan, Jinyue, 2019. "Nodal market power assessment of flexible demand resources," Applied Energy, Elsevier, vol. 235(C), pages 564-577.
    • Handle: RePEc:eee:appene:v:235:y:2019:i:c:p:564-577
    DOI: 10.1016/j.apenergy.2018.10.060
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0306261918316283
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.apenergy.2018.10.060?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Paul Joskow & Jean Tirole, 2006. "Retail electricity competition," RAND Journal of Economics, RAND Corporation, vol. 37(4), pages 799-815, December.
    2. Richard Gilbert & Neuhoff, K. & Newbery, D., 2002. "Allocating Transmission to Mitigate Market Power in Electricity Networks," Cambridge Working Papers in Economics 0225, Faculty of Economics, University of Cambridge.
    3. Siano, Pierluigi, 2014. "Demand response and smart grids—A survey," Renewable and Sustainable Energy Reviews, Elsevier, vol. 30(C), pages 461-478.
    4. Siano, Pierluigi & Sarno, Debora, 2016. "Assessing the benefits of residential demand response in a real time distribution energy market," Applied Energy, Elsevier, vol. 161(C), pages 533-551.
    5. Behrangrad, Mahdi, 2015. "A review of demand side management business models in the electricity market," Renewable and Sustainable Energy Reviews, Elsevier, vol. 47(C), pages 270-283.
    6. Lawrence J. Lau & Yingyi Qian & Gerard Roland, 2000. "Reform without Losers: An Interpretation of China's Dual-Track Approach to Transition," Journal of Political Economy, University of Chicago Press, vol. 108(1), pages 120-143, February.
    7. Schumacher, Ute, 1991. "Buyer Structure and Seller Performance in U.S. Manufacturing Industries," The Review of Economics and Statistics, MIT Press, vol. 73(2), pages 277-284, May.
    8. Lustgarten, Steven H, 1975. "The Impact of Buyer Concentration in Manufacturing Industries," The Review of Economics and Statistics, MIT Press, vol. 57(2), pages 125-132, May.
    9. Paul Joskow & Jean Tirole, 2006. "Retail electricity competition," RAND Journal of Economics, The RAND Corporation, vol. 37(4), pages 799-815, December.
    10. Su, Wencong & Huang, Alex Q., 2014. "A game theoretic framework for a next-generation retail electricity market with high penetration of distributed residential electricity suppliers," Applied Energy, Elsevier, vol. 119(C), pages 341-350.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Zhao, Yongliang & Liu, Ming & Wang, Chaoyang & Wang, Zhu & Chong, Daotong & Yan, Junjie, 2019. "Exergy analysis of the regulating measures of operational flexibility in supercritical coal-fired power plants during transient processes," Applied Energy, Elsevier, vol. 253(C), pages 1-1.
    2. Zhang, Yuanyuan & Zhao, Huiru & Li, Bingkang, 2022. "Research on the design and influence of unit generation capacity adequacy guarantee mechanism in the power market," Energy, Elsevier, vol. 248(C).
    3. Shang, Nan & Ye, Chengjin & Ding, Yi & Tu, Teng & Huo, Baofeng, 2019. "Risk-based optimal power portfolio methodology for generation companies considering cross-region generation right trade," Applied Energy, Elsevier, vol. 254(C).
    4. Heinrich, Carsten & Ziras, Charalampos & Syrri, Angeliki L.A. & Bindner, Henrik W., 2020. "EcoGrid 2.0: A large-scale field trial of a local flexibility market," Applied Energy, Elsevier, vol. 261(C).
    5. Nowak, Grzegorz & Rusin, Andrzej & Łukowicz, Henryk & Tomala, Martyna, 2020. "Improving the power unit operation flexibility by the turbine start-up optimization," Energy, Elsevier, vol. 198(C).
    6. Rai, Ussama & Oluleye, Gbemi & Hawkes, Adam, 2022. "An optimisation model to determine the capacity of a distributed energy resource to contract with a balancing services aggregator," Applied Energy, Elsevier, vol. 306(PA).
    7. Li, Tong & Wang, Zhaohua & Zhao, Wenhui, 2022. "Comparison and application potential analysis of autoencoder-based electricity pattern mining algorithms for large-scale demand response," Technological Forecasting and Social Change, Elsevier, vol. 177(C).
    8. Zhao, Haitao & Jiang, Peng & Chen, Zhe & Ezeh, Collins I. & Hong, Yuanda & Guo, Yishan & Zheng, Chenghang & Džapo, Hrvoje & Gao, Xiang & Wu, Tao, 2019. "Improvement of fuel sources and energy products flexibility in coal power plants via energy-cyber-physical-systems approach," Applied Energy, Elsevier, vol. 254(C).
    9. Mark Kipngetich Kiptoo & Oludamilare Bode Adewuyi & Harun Or Rashid Howlader & Akito Nakadomari & Tomonobu Senjyu, 2023. "Optimal Capacity and Operational Planning for Renewable Energy-Based Microgrid Considering Different Demand-Side Management Strategies," Energies, MDPI, vol. 16(10), pages 1-25, May.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Hui, Hongxun & Ding, Yi & Song, Yonghua & Rahman, Saifur, 2019. "Modeling and control of flexible loads for frequency regulation services considering compensation of communication latency and detection error," Applied Energy, Elsevier, vol. 250(C), pages 161-174.
    2. Märkle-Huß, Joscha & Feuerriegel, Stefan & Neumann, Dirk, 2018. "Large-scale demand response and its implications for spot prices, load and policies: Insights from the German-Austrian electricity market," Applied Energy, Elsevier, vol. 210(C), pages 1290-1298.
    3. Bradley J. Ruffle, 2005. "Buyer Countervailing Power: A Survey of Experimental Evidence," Working Papers 0512, Ben-Gurion University of the Negev, Department of Economics.
    4. Hu, Maomao & Xiao, Fu & Wang, Lingshi, 2017. "Investigation of demand response potentials of residential air conditioners in smart grids using grey-box room thermal model," Applied Energy, Elsevier, vol. 207(C), pages 324-335.
    5. René Aïd & Matteo Basei & Giorgia Callegaro & Luciano Campi & Tiziano Vargiolu, 2020. "Nonzero-Sum Stochastic Differential Games with Impulse Controls: A Verification Theorem with Applications," Mathematics of Operations Research, INFORMS, vol. 45(1), pages 205-232, February.
    6. Meyabadi, A. Fattahi & Deihimi, M.H., 2017. "A review of demand-side management: Reconsidering theoretical framework," Renewable and Sustainable Energy Reviews, Elsevier, vol. 80(C), pages 367-379.
    7. Pio Baake & Sebastian Schwenen & Christian von Hirschhausen, 2020. "Local Power Markets," Discussion Papers of DIW Berlin 1904, DIW Berlin, German Institute for Economic Research.
    8. Sadeghianpourhamami, N. & Demeester, T. & Benoit, D.F. & Strobbe, M. & Develder, C., 2016. "Modeling and analysis of residential flexibility: Timing of white good usage," Applied Energy, Elsevier, vol. 179(C), pages 790-805.
    9. Hyland, Marie & Leahy, Eimear & Tol, Richard S.J., 2013. "The potential for segmentation of the retail market for electricity in Ireland," Energy Policy, Elsevier, vol. 61(C), pages 349-359.
    10. Severin Borenstein & James Bushnell, 2015. "The US Electricity Industry After 20 Years of Restructuring," Annual Review of Economics, Annual Reviews, vol. 7(1), pages 437-463, August.
    11. Mier, Mathias, 2021. "Efficient pricing of electricity revisited," Energy Economics, Elsevier, vol. 104(C).
    12. Wang, Ge & Zhang, Qi & Li, Hailong & McLellan, Benjamin C. & Chen, Siyuan & Li, Yan & Tian, Yulu, 2017. "Study on the promotion impact of demand response on distributed PV penetration by using non-cooperative game theoretical analysis," Applied Energy, Elsevier, vol. 185(P2), pages 1869-1878.
    13. Alberini, Anna & Gans, Will & Velez-Lopez, Daniel, 2011. "Residential consumption of gas and electricity in the U.S.: The role of prices and income," Energy Economics, Elsevier, vol. 33(5), pages 870-881, September.
    14. Yukihiko Funaki & Harold Houba & Evgenia Motchenkova, 2020. "Market power in bilateral oligopoly markets with non-expandable infrastructures," International Journal of Game Theory, Springer;Game Theory Society, vol. 49(2), pages 525-546, June.
    15. Romano, Elliot & Patel, Martin K. & Hollmuller, Pierre, 2024. "Applying trade mechanisms to quantify dynamic GHG emissions of electricity consumption in an open economy - The case of Switzerland," Energy, Elsevier, vol. 311(C).
    16. Ketter, W. & Collins, J. & Block, C., 2010. "Smart Grid Economics: Policy Guidance through Competitive Simulation," ERIM Report Series Research in Management ERS-2010-043-LIS, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam.
    17. Wang, Tian & Deng, Shiming, 2019. "Multi-Period energy procurement policies for smart-grid communities with deferrable demand and supplementary uncertain power supplies," Omega, Elsevier, vol. 89(C), pages 212-226.
    18. Luis R. Boscán, 2020. "European Union retail electricity markets in the Green Transition: The quest for adequate design," Wiley Interdisciplinary Reviews: Energy and Environment, Wiley Blackwell, vol. 9(1), January.
    19. Daniel Adelman & Canan Uçkun, 2019. "Dynamic Electricity Pricing to Smart Homes," Operations Research, INFORMS, vol. 67(6), pages 1520-1542, November.
    20. Joskow, Paul L., 2008. "Capacity payments in imperfect electricity markets: Need and design," Utilities Policy, Elsevier, vol. 16(3), pages 159-170, September.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:appene:v:235:y:2019:i:c:p:564-577. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/405891/description#description .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.