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The performance of renewable-rich wholesale electricity markets with significant energy storage and flexibility

Author

Listed:
  • Zhang, Yimin
  • Davis, Dominic
  • Brear, Michael J.
  • Vecchi, Andrea

Abstract

This work investigates the technical and financial performance of deeply decarbonised wholesale electricity markets with uncertain variable renewable generation (VRG), uncertain demand and different types of flexibility. It first finds that different combinations of power reserves (i.e. power generation capacity) and energy reserves (i.e. energy storage capacity), can achieve adequate system reliability at similar total costs. However, use of only energy reserves never achieved adequate system reliability, and this looks to be a fundamental challenge to the reliability of systems with only energy reserves but no power reserves. Two independent aspects of wholesale market operations are then found to be the main determinants of system reliability: the length of the unit commitment (UC) schedule prior to dispatch and the degree of operational uncertainty of VRG during dispatch.

Suggested Citation

  • Zhang, Yimin & Davis, Dominic & Brear, Michael J. & Vecchi, Andrea, 2024. "The performance of renewable-rich wholesale electricity markets with significant energy storage and flexibility," Energy Economics, Elsevier, vol. 140(C).
    • Handle: RePEc:eee:eneeco:v:140:y:2024:i:c:s0140988324007357
    DOI: 10.1016/j.eneco.2024.108026
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    More about this item

    Keywords

    Electricity market; Uncertainty; Reliability; Energy storage; Energy system modelling; Decarbonisation;
    All these keywords.

    JEL classification:

    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources
    • Q47 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy Forecasting
    • Q50 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - General
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities

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