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The Uncertain Bidder Pays Principle and Its Implementation in a Simple Integrated Portfolio-Bidding Energy-Reserve Market Model

Author

Listed:
  • Dávid Csercsik

    (Faculty of Information Technology and Bionics, Pázmány Péter Catholic University, 1083 Budapest, Práter str. 50/A, Hungary)

  • Ádám Sleisz

    (Department of Electric Power Engineering, Budapest University of Technology and Economics, 1111 Budapest, Egry J. u. 18., Hungary)

  • Péter Márk Sőrés

    (Department of Electric Power Engineering, Budapest University of Technology and Economics, 1111 Budapest, Egry J. u. 18., Hungary)

Abstract

One reason for the allocation of reserves in electricity markets is the uncertainty of demand and supply. If the bias of the generation portfolio shifts from controllable generators to renewable sources with significantly higher uncertainty, it is natural to assume that more reserve has to be allocated. The price of reserve allocation in European models is dominantly paid by the independent system operator in the form of long-term paid reserve capacities and reserve demand bids submitted to various reserve markets. However, if we consider a scenario where the significant part of generation is allocated in day-ahead auctions, the power mix is not known in advance, so the required reserves can not be efficiently curtailed for the ratio of renewables. In the current paper we analyze an integrated European-type, portfolio-bidding energy-reserve market model, which aims to (at least partially) put the burden of reserve allocation costs to the uncertain energy bidders who are partially responsible for the amount of reserves needed. The proposed method in addition proposes a more dynamic and adaptive reserve curtailment method compared to the current practice, while it is formulated in a computationally efficient way.

Suggested Citation

  • Dávid Csercsik & Ádám Sleisz & Péter Márk Sőrés, 2019. "The Uncertain Bidder Pays Principle and Its Implementation in a Simple Integrated Portfolio-Bidding Energy-Reserve Market Model," Energies, MDPI, vol. 12(15), pages 1-25, August.
    • Handle: RePEc:gam:jeners:v:12:y:2019:i:15:p:2957-:d:253606
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    References listed on IDEAS

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    2. Ádám Sleisz & Dániel Divényi & Beáta Polgári & Péter Sőrés & Dávid Raisz, 2022. "A Novel Cost Allocation Mechanism for Local Flexibility in the Power System with Partial Disintermediation," Energies, MDPI, vol. 15(22), pages 1-18, November.

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