IDEAS home Printed from https://ideas.repec.org/a/eee/appene/v377y2025ipds0306261924020622.html
   My bibliography  Save this article

Demand curtailment allocation in interconnected electricity markets

Author

Listed:
  • Fraunholz, Christoph
  • Tash, Ali
  • Scheben, Heike
  • Zillich, Alexander

Abstract

In interconnected electricity systems dominated by intermittent renewable generation, resource adequacy assessments need to consider cross-zonal and intertemporal dependencies. This calls for a decision-making mechanism that determines a fair and unique allocation of inevitable demand curtailment across space and time. Otherwise, traditional resource adequacy indicators like the loss of load expectation (LOLE) or the expected energy not supplied (EENS) become arbitrary on a national level. Against this background, we develop a framework for evaluating the spatial and temporal fairness of demand curtailment allocation. We then introduce two model formulations – a linearized approach and a post-processing approach – that allow to implement a demand curtailment allocation mechanism into any dispatch optimization model. Simulation results from a European-wide case study show that on an overall system level, both approaches substantially increase the spatial fairness of the demand curtailment allocation without significantly increasing the total EENS across all zones. However, only the linearized approach achieves a more fair temporal allocation across different time steps. The implications in an individual zone, e.g. Germany, are stark, which is illustrated by the LOLE varying between 12 and 116h/a as well as the EENS between 94.9 and 293.2GWh/a depending on the applied configuration.

Suggested Citation

  • Fraunholz, Christoph & Tash, Ali & Scheben, Heike & Zillich, Alexander, 2025. "Demand curtailment allocation in interconnected electricity markets," Applied Energy, Elsevier, vol. 377(PD).
    • Handle: RePEc:eee:appene:v:377:y:2025:i:pd:s0306261924020622
    DOI: 10.1016/j.apenergy.2024.124679
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0306261924020622
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.apenergy.2024.124679?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. Voswinkel, Simon & Höckner, Jonas & Khalid, Abuzar & Weber, Christoph, 2022. "Sharing congestion management costs among system operators using the Shapley value," Applied Energy, Elsevier, vol. 317(C).
    2. Newbery, David & Pollitt, Michael G. & Ritz, Robert A. & Strielkowski, Wadim, 2018. "Market design for a high-renewables European electricity system," Renewable and Sustainable Energy Reviews, Elsevier, vol. 91(C), pages 695-707.
    3. Christoph Fraunholz & Kim K. Miskiw & Emil Kraft & Wolf Fichtner & Christoph Weber, 2023. "On the Role of Risk Aversion and Market Design in Capacity Expansion Planning," The Energy Journal, , vol. 44(3), pages 111-138, May.
    4. Christoph Fraunholz, Kim K. Miskiw, Emil Kraft, Wolf Fichtner, and Christoph Weber, 2023. "On the Role of Risk Aversion and Market Design in Capacity Expansion Planning," The Energy Journal, International Association for Energy Economics, vol. 0(Number 3).
    5. Lidia Ceriani & Paolo Verme, 2012. "The origins of the Gini index: extracts from Variabilità e Mutabilità (1912) by Corrado Gini," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 10(3), pages 421-443, September.
    6. Bublitz, Andreas & Keles, Dogan & Zimmermann, Florian & Fraunholz, Christoph & Fichtner, Wolf, 2019. "A survey on electricity market design: Insights from theory and real-world implementations of capacity remuneration mechanisms," Energy Economics, Elsevier, vol. 80(C), pages 1059-1078.
    7. Fraunholz, Christoph & Keles, Dogan & Fichtner, Wolf, 2021. "On the role of electricity storage in capacity remuneration mechanisms," Energy Policy, Elsevier, vol. 149(C).
    8. Ringler, Philipp & Keles, Dogan & Fichtner, Wolf, 2017. "How to benefit from a common European electricity market design," Energy Policy, Elsevier, vol. 101(C), pages 629-643.
    9. Heylen, Evelyn & Deconinck, Geert & Van Hertem, Dirk, 2018. "Review and classification of reliability indicators for power systems with a high share of renewable energy sources," Renewable and Sustainable Energy Reviews, Elsevier, vol. 97(C), pages 554-568.
    Full references (including those not matched with items on IDEAS)

    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. Will, Christian & Zimmermann, Florian & Ensslen, Axel & Fraunholz, Christoph & Jochem, Patrick & Keles, Dogan, 2024. "Can electric vehicle charging be carbon neutral? Uniting smart charging and renewables," Applied Energy, Elsevier, vol. 371(C).
    2. Fraunholz, Christoph & Miskiw, Kim K. & Kraft, Emil & Fichtner, Wolf & Weber, Christoph, 2021. "On the role of risk aversion and market design in capacity expansion planning," Working Paper Series in Production and Energy 62, Karlsruhe Institute of Technology (KIT), Institute for Industrial Production (IIP).
    3. Fleten, Stein-Erik & Fram, Benjamin P. & Ullrich, Carl J., 2024. "The reliability pricing model and coal-fired generators in PJM," Energy Economics, Elsevier, vol. 134(C).
    4. Will, Christian & Zimmermann, Florian & Ensslen, Axel & Fraunholz, Christoph & Jochem, Patrick & Keles, Dogan, 2023. "Can electric vehicle charging be carbon neutral? Uniting smart charging and renewables," Working Paper Series in Production and Energy 69, Karlsruhe Institute of Technology (KIT), Institute for Industrial Production (IIP).
    5. Fraunholz, Christoph & Kraft, Emil & Keles, Dogan & Fichtner, Wolf, 2021. "Advanced price forecasting in agent-based electricity market simulation," Applied Energy, Elsevier, vol. 290(C).
    6. Michele Fiorelli & Dogan Keles & Francesco Montana & Giovanni Lorenzo Restifo & Eleonora Riva Sanseverino & Gaetano Zizzo, 2020. "Evaluation of the Administrative Phase-Out of Coal Power Plants on the Italian Electricity Market," Energies, MDPI, vol. 13(18), pages 1-24, September.
    7. Keppler, Jan Horst & Quemin, Simon & Saguan, Marcelo, 2022. "Why the sustainable provision of low-carbon electricity needs hybrid markets," Energy Policy, Elsevier, vol. 171(C).
    8. Mier, Mathias, 2021. "Efficient pricing of electricity revisited," Energy Economics, Elsevier, vol. 104(C).
    9. Mastropietro, Paolo & Rodilla, Pablo & Rivier, Michel & Batlle, Carlos, 2024. "Reliability options: Regulatory recommendations for the next generation of capacity remuneration mechanisms," Energy Policy, Elsevier, vol. 185(C).
    10. Söder, Lennart & Tómasson, Egill & Estanqueiro, Ana & Flynn, Damian & Hodge, Bri-Mathias & Kiviluoma, Juha & Korpås, Magnus & Neau, Emmanuel & Couto, António & Pudjianto, Danny & Strbac, Goran & Burke, 2020. "Review of wind generation within adequacy calculations and capacity markets for different power systems," Renewable and Sustainable Energy Reviews, Elsevier, vol. 119(C).
    11. Fett, Daniel & Fraunholz, Christoph & Keles, Dogan, 2021. "Diffusion and system impact of residential battery storage under different regulatory settings," Energy Policy, Elsevier, vol. 158(C).
    12. Fraunholz, Christoph & Keles, Dogan & Fichtner, Wolf, 2021. "On the role of electricity storage in capacity remuneration mechanisms," Energy Policy, Elsevier, vol. 149(C).
    13. Di Foggia, Giacomo & Beccarello, Massimo, 2024. "Designing New Energy Markets to Promote Renewables," MPRA Paper 121783, University Library of Munich, Germany.
    14. Lebeau, Alexis & Petitet, Marie & Quemin, Simon & Saguan, Marcelo, 2024. "Long-term issues with the Energy-Only Market design in the context of deep decarbonization," Energy Economics, Elsevier, vol. 132(C).
    15. Voulis, Nina & van Etten, Max J.J. & Chappin, Émile J.L. & Warnier, Martijn & Brazier, Frances M.T., 2019. "Rethinking European energy taxation to incentivise consumer demand response participation," Energy Policy, Elsevier, vol. 124(C), pages 156-168.
    16. Bublitz, Andreas & Keles, Dogan & Zimmermann, Florian & Fraunholz, Christoph & Fichtner, Wolf, 2018. "A survey on electricity market design: Insights from theory and real-world implementations of capacity remuneration mechanisms," Working Paper Series in Production and Energy 27, Karlsruhe Institute of Technology (KIT), Institute for Industrial Production (IIP).
    17. Liu, Shuangquan & Yang, Qiang & Cai, Huaxiang & Yan, Minghui & Zhang, Maolin & Wu, Dianning & Xie, Mengfei, 2019. "Market reform of Yunnan electricity in southwestern China: Practice, challenges and implications," Renewable and Sustainable Energy Reviews, Elsevier, vol. 113(C), pages 1-1.
    18. Anke, Carl-Philipp & Möst, Dominik, 2021. "The expansion of RES and the EU ETS – valuable addition or conflicting instruments?," Energy Policy, Elsevier, vol. 150(C).
    19. Feng, Yuanhao & Feng, Donghan & Zhou, Yun & Xu, Shaolun, 2024. "Generation side strategy and user side cost based on equilibrium analysis of the power market under the reliability option," Energy, Elsevier, vol. 287(C).
    20. Woo, C.K. & Milstein, I. & Tishler, A. & Zarnikau, J., 2019. "A wholesale electricity market design sans missing money and price manipulation," Energy Policy, Elsevier, vol. 134(C).

    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:377:y:2025:i:pd:s0306261924020622. 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.