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Variable Renewable Energy and Market Design: New Products and a Real-World Study

Author

Listed:
  • Hugo Algarvio

    (LNEG–National Laboratory of Energy and Geology, Est. Paço Lumiar 22, 1649-038 Lisbon, Portugal
    Instituto Superior Técnico, 1049-001 Lisbon, Portugal)

  • Fernando Lopes

    (LNEG–National Laboratory of Energy and Geology, Est. Paço Lumiar 22, 1649-038 Lisbon, Portugal)

  • António Couto

    (LNEG–National Laboratory of Energy and Geology, Est. Paço Lumiar 22, 1649-038 Lisbon, Portugal)

  • Ana Estanqueiro

    (LNEG–National Laboratory of Energy and Geology, Est. Paço Lumiar 22, 1649-038 Lisbon, Portugal)

  • João Santana

    (Instituto Superior Técnico, 1049-001 Lisbon, Portugal)

Abstract

Most existing energy markets (EMs) were not designed to take into account an active participation of variable renewable energy (VRE). This situation results typically in imbalances and substantial costs in balancing markets. Such costs are reflected both in the energy and the VRE parts of the consumer tariffs. Both appropriate market products and new elements of market design may largely facilitate the large-scale integration of VRE in EMs. Accordingly, this article presents a new bilateral energy contract and introduces two new marketplaces that can contribute to reduce the imbalances resulting from VRE producers. It also presents a study conducted with the help of an agent-based tool, called MATREM. The results indicate a significant decrease in the imbalances and the associated costs.

Suggested Citation

  • Hugo Algarvio & Fernando Lopes & António Couto & Ana Estanqueiro & João Santana, 2019. "Variable Renewable Energy and Market Design: New Products and a Real-World Study," Energies, MDPI, vol. 12(23), pages 1-17, November.
    • Handle: RePEc:gam:jeners:v:12:y:2019:i:23:p:4576-:d:292750
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    References listed on IDEAS

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    1. Hugo Algarvio & Fernando Lopes & António Couto & João Santana & Ana Estanqueiro, 2019. "Effects of regulating the European Internal Market on the integration of variable renewable energy," Wiley Interdisciplinary Reviews: Energy and Environment, Wiley Blackwell, vol. 8(6), November.
    2. Hugo Algarvio & Fernando Lopes & António Couto & Ana Estanqueiro, 2019. "Participation of wind power producers in day‐ahead and balancing markets: An overview and a simulation‐based study," Wiley Interdisciplinary Reviews: Energy and Environment, Wiley Blackwell, vol. 8(5), September.
    3. Moiseeva, Ekaterina & Wogrin, Sonja & Hesamzadeh, Mohammad Reza, 2017. "Generation flexibility in ramp rates: Strategic behavior and lessons for electricity market design," European Journal of Operational Research, Elsevier, vol. 261(2), pages 755-771.
    4. Fernandes, Camila & Frías, Pablo & Reneses, Javier, 2016. "Participation of intermittent renewable generators in balancing mechanisms: A closer look into the Spanish market design," Renewable Energy, Elsevier, vol. 89(C), pages 305-316.
    5. Fu-Cheng Wang & Yi-Shao Hsiao & Yi-Zhe Yang, 2018. "The Optimization of Hybrid Power Systems with Renewable Energy and Hydrogen Generation," Energies, MDPI, vol. 11(8), pages 1-19, July.
    6. Müfit Altin & Jan Christian Kuhlmann & Kaushik Das & Anca Daniela Hansen, 2018. "Optimization of Synthetic Inertial Response from Wind Power Plants," Energies, MDPI, vol. 11(5), pages 1-15, April.
    7. Hugo Algarvio & António Couto & Fernando Lopes & Ana Estanqueiro, 2019. "Changing the Day-Ahead Gate Closure to Wind Power Integration: A Simulation-Based Study," Energies, MDPI, vol. 12(14), pages 1-20, July.
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    Cited by:

    1. Hugo Algarvio, 2023. "The Economic Sustainability of Variable Renewable Energy Considering the Negotiation of Different Support Schemes," Sustainability, MDPI, vol. 15(5), pages 1-21, March.
    2. Hugo Algarvio & Fernando Lopes, 2023. "Bilateral Contracting and Price-Based Demand Response in Multi-Agent Electricity Markets: A Study on Time-of-Use Tariffs," Energies, MDPI, vol. 16(2), pages 1-17, January.

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