Extreme prices in electricity balancing markets from an approach of statistical physics
Authored by Mario Mureddu, Hildegard Meyer-Ortmanns
Date Published: 2018
DOI: 10.1016/j.physa.2017.09.001
Sponsors:
German Federal Ministry of Education and Research (BMBF)
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Mathematical description
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Abstract
An increase in energy production from renewable energy sources is viewed
as a crucial achievement in most industrialized countries. The higher
variability of power production via renewables leads to a rise in
ancillary service costs over the power system, in particular costs
within the electricity balancing markets, mainly due to an increased
number of extreme price spikes, This study analyzes the impact of an
increased share of renewable energy sources on the behavior of price and
volumes of the Italian balancing market. Starting from configurations of
load and power production, which guarantee a stable performance, we
implement fluctuations in the load and in renewables; in particular we
artificially increase the contribution of renewables as compared to
conventional power sources to cover the total load. We then determine
the amount of requested energy in the balancing market and its
fluctuations, which are induced by production and consumption. Within an
approach of agent-based modeling we estimate the resulting energy prices
and costs. While their average values turn out to be only slightly
affected by an increased contribution from renewables, the probability
for extreme price events is shown to increase along with undesired peaks
in the costs. Our methodology provides a tool for estimating outliers in
prices obtained in the energy balancing market, once data of
consumption, production and their typical fluctuations are provided. (C)
2017 Elsevier B.V. All rights reserved.
Tags
models
statistical physics
electricity markets
Power
renewable energy
Parameters
Agent-based
modeling