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Implementing flexible demand: Real-time price vs. market integration

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  • Kühnlenz, Florian
  • Nardelli, Pedro H.J.
  • Karhinen, Santtu
  • Svento, Rauli

Abstract

This paper proposes an agent-based model that combines both spot and balancing electricity markets. From this model, we develop a multi-agent simulation to study the integration of the consumers' flexibility into the system. Our study identifies the conditions that real-time prices may lead to higher electricity costs, which in turn contradicts the usual claim that such a pricing scheme reduces cost.

Suggested Citation

  • Kühnlenz, Florian & Nardelli, Pedro H.J. & Karhinen, Santtu & Svento, Rauli, 2018. "Implementing flexible demand: Real-time price vs. market integration," Energy, Elsevier, vol. 149(C), pages 550-565.
    • Handle: RePEc:eee:energy:v:149:y:2018:i:c:p:550-565
    DOI: 10.1016/j.energy.2018.02.024
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    7. Yin, Linfei & Qiu, Yao, 2022. "Long-term price guidance mechanism of flexible energy service providers based on stochastic differential methods," Energy, Elsevier, vol. 238(PB).
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    9. Heydarian-Forushani, Ehsan & Golshan, Mohamad Esmail Hamedani & Shafie-khah, Miadreza & Catalão, João P.S., 2020. "A comprehensive linear model for demand response optimization problem," Energy, Elsevier, vol. 209(C).
    10. Sachin Kahawala & Daswin De Silva & Seppo Sierla & Damminda Alahakoon & Rashmika Nawaratne & Evgeny Osipov & Andrew Jennings & Valeriy Vyatkin, 2021. "Robust Multi-Step Predictor for Electricity Markets with Real-Time Pricing," Energies, MDPI, vol. 14(14), pages 1-20, July.
    11. Sousa, Joana & Soares, Isabel, 2020. "Demand response, market design and risk: A literature review," Utilities Policy, Elsevier, vol. 66(C).
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