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Economic zones for future complex power systems

Author

Listed:
  • Thomas Greve

    (Energy Policy Research Group, Faculty of Economics, University of Cambridge)

  • Charalampos Patsios

    (School of Electrical and Electronic Engineering, Newcastle University)

  • Michael G. Pollitt

    (Energy Policy Research Group, Cambridge Judge Business School, University of Cambridge)

  • Phil Taylor

    (School of Electrical and Electronic Engineering, Newcastle University)

Abstract

This paper examines the economics of the electricity market out to 2050. We propose a flexible zoning concept, built up around economic and technical layers, in networks of the order of hundreds of thousands or millions of nodes. The Economic Layer runs auctions to determine the electricity to be delivered and prices. The Economic Layer delivers suggestions after a fixed ordering, starting with suppliers and demands that generates the lowest overall system cost, then second-lowest overall network cost etc. These suggestions are delivered to the Technical Layer that checks for feasibility in terms of technical constraints. The first match between the ranked suggestions and non-violation of technical constraints is chosen. We demonstrate why this paper should be considered for future power systems. This paper extends previous work on reactive power exchange by introducing market considerations in zoning mechanisms for active power exchanges. We are also exhibit the potential for much higher price resolution in distribution networks via our concept of economic zoning.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Thomas Greve & Charalampos Patsios & Michael G. Pollitt & Phil Taylor, 2016. "Economic zones for future complex power systems," Working Papers EPRG 1625, Energy Policy Research Group, Cambridge Judge Business School, University of Cambridge.
    • Handle: RePEc:enp:wpaper:eprg1625
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    References listed on IDEAS

    as
    1. Cao, Wanyu & Wu, Jianzhong & Jenkins, Nick & Wang, Chengshan & Green, Timothy, 2016. "Operating principle of Soft Open Points for electrical distribution network operation," Applied Energy, Elsevier, vol. 164(C), pages 245-257.
    2. Hogan, William W, 2002. "Electricity Market Restructuring: Reforms of Reforms," Journal of Regulatory Economics, Springer, vol. 21(1), pages 103-132, January.
    3. Krishna, Vijay, 2009. "Auction Theory," Elsevier Monographs, Elsevier, edition 2, number 9780123745071.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Greve, T. & Pollitt, M., 2016. "A future auction mechanism for distributed generation," Cambridge Working Papers in Economics 1672, Faculty of Economics, University of Cambridge.
    2. Newbery, David & Pollitt, Michael G. & Ritz, Robert A. & Strielkowski, Wadim, 2018. "Market design for a high-renewables European electricity system," Renewable and Sustainable Energy Reviews, Elsevier, vol. 91(C), pages 695-707.

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    More about this item

    Keywords

    future power systems; zones of control; auctions;
    All these keywords.

    JEL classification:

    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation
    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources

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