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Modelling power prices in markets with high shares of renewable energies and storages—The Norwegian example

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  • Scheben, Heike
  • Hufendiek, Kai

Abstract

Though power markets evolved into high shares of renewable energies markets, typical optimisation models, designed for thermal electricity markets, lead to prices with low volatility when applied to the Norwegian market. The objective of this work is to adapt typical optimisation models, so that they can depict price structures in markets with high shares of renewables and flexibilities. Additionally, also the sensitivity of the prices to the smallest parameter variations of the influencing factors shall be highlighted. For this purpose, the key factors which are qualitatively examined in the literature are selected. These are implemented in a standard electricity market model and subsequently analysed quantitatively. It is demonstrated that adding uncertainty and storage restrictions is sufficient to adequately represent typical price structures in Norway. Furthermore, it is shown that price structures are highly dependent on the parameters. E.g., limiting the maximum availability of storage power plants to 63%–69% leads to significant price peaks, resulting in a maximum price increase of up to 160 €/MWh. This indicates that the influencing factors identified here should be taken into consideration when modelling future power systems, although great diligence is recommended during parameterisation of these factors.

Suggested Citation

  • Scheben, Heike & Hufendiek, Kai, 2023. "Modelling power prices in markets with high shares of renewable energies and storages—The Norwegian example," Energy, Elsevier, vol. 267(C).
    • Handle: RePEc:eee:energy:v:267:y:2023:i:c:s0360544222033370
    DOI: 10.1016/j.energy.2022.126451
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    References listed on IDEAS

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    2. Zhou, Dequn & Zhang, Yining & Wang, Qunwei & Ding, Hao, 2024. "How do uncertain renewable energy induced risks evolve in a two-stage deregulated wholesale power market," Applied Energy, Elsevier, vol. 353(PB).

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