Change search
CiteExportLink to record
Permanent link

Direct link
Cite
Citation style
  • apa
  • harvard1
  • ieee
  • modern-language-association-8th-edition
  • vancouver
  • Other style
More styles
Language
  • de-DE
  • en-GB
  • en-US
  • fi-FI
  • nn-NO
  • nn-NB
  • sv-SE
  • Other locale
More languages
Output format
  • html
  • text
  • asciidoc
  • rtf
Generation Flexibility in Ramp Rates: Strategic Behavior and Lessons for Electricity Market Design
KTH, School of Electrical Engineering (EES), Electric Power and Energy Systems. (Electricity Market Research Group (EMReG))ORCID iD: 0000-0002-6973-3726
Universidad Pontificia Comillas.
KTH, School of Electrical Engineering (EES), Electric Power and Energy Systems. (Electricity Market Research Group (EMReG))
2017 (English)In: European Journal of Operational Research, ISSN 0377-2217, E-ISSN 1872-6860, Vol. 261, no 2, 755-771 p.Article in journal (Refereed) Published
Abstract [en]

A ramp rate usually defines the speed at which an electric power producer can decrease or increase its production in limited time. The availability of fast-ramping generators significantly affects the economic dispatch, especially in the systems with high penetration of intermittent energy sources, e.g. wind power, since the fluctuations in supply are common and sometimes unpredictable. One of the regulatory practices of how to impel generators to provide their true ramp rates is to separate the stages of submitting the bids on ramp rate and production. In this paper we distinguish two types of market structures: one-stage – when electric power producers are deciding their production and ramp rate at the same time, or two-stage – when generators decide their ramp rate first, and choose their production levels at the second stage. We employ one-stage and two-stage equilibrium models respectively to represent these market setups and use a conjectured price response parameter ranging from perfect competition to the Cournot oligopoly to investigate the effect of the market competition structure on the strategic decisions of the generators. We compare these two market setups in a symmetric duopoly case with two time periods and prove that in the two-stage market setup the level of ramp rate is independent of the strategic behavior in the spot market and generally lower than the one offered in the one-stage setup. We also show that the ramp-rate levels in one- and two-stage models coincide at the Cournot oligopoly. We extend the model to asymmetry, several load periods, portfolio bidding, and uncertainty, and show that withholding the ramp rate still occurs in both models. Our findings prove that market regulators cannot rely on only separating the decision stages as an effective measure to mitigate market power and in certain cases it may lead to an adverse effect.

Place, publisher, year, edition, pages
Elsevier, 2017. Vol. 261, no 2, 755-771 p.
Keyword [en]
OR in energy, Ramp rate, Strategic decision-making, Bilevel programming, Equilibrium problems
National Category
Other Electrical Engineering, Electronic Engineering, Information Engineering
Research subject
Energy Technology
Identifiers
URN: urn:nbn:se:kth:diva-203802DOI: 10.1016/j.ejor.2017.02.028ISI: 000401206300028Scopus ID: 2-s2.0-85014684150OAI: oai:DiVA.org:kth-203802DiVA: diva2:1082608
Note

QC 20170405

Available from: 2017-03-17 Created: 2017-03-17 Last updated: 2017-06-15Bibliographically approved
In thesis
1. Impact of High levels of Wind Penetration on the Exercise of Market Power in the Multi-Area Systems
Open this publication in new window or tab >>Impact of High levels of Wind Penetration on the Exercise of Market Power in the Multi-Area Systems
2017 (English)Doctoral thesis, comprehensive summary (Other academic)
Abstract [en]

New European energy policies have set a goal of a high share of renewable energy in electricity markets. In the presence of high levels of renewable generation, and especially wind, there is more uncertainty in the supply. It is natural, that volatility in energy production induces the volatility in energy prices. This can create incentives for the generators to exercise market power by traditional means: withholding the output by conventional generators, bidding not the true marginal costs, or using locational market power. In addition, a new type of market power has been recently observed: exercise of market power on ramp rate. This dissertation focuses on modeling the exercise of market power in power systems with high penetration of wind power. The models consider a single, or multiple profit-maximizing generators. Flexibility is identified as one of the major issues in wind-integrated power systems. Therefore, part of the research studies the behavior of strategic hydropower producers as main providers of flexibility in systems, where hydropower is available.Developed models are formulated as mathematical and equilibrium problems with equilibrium constraints (MPECs and EPECs). The models are recast as mixed-integer linear programs (MILPs) using discretization. Resulting MILPs can be solved directly by commercially-available MILP solvers, or by applying decomposition. Proposed Modified Benders Decomposition Algorithm (MBDA) significantly improves the computational efficiency.

Place, publisher, year, edition, pages
Stockholm: KTH Royal Institute of Technology, 2017. 95 p.
Series
TRITA 2017:047, ISSN 1653-5146
Keyword
wind integration, market power, game theory, mathematical programming
National Category
Other Electrical Engineering, Electronic Engineering, Information Engineering
Research subject
Electrical Engineering
Identifiers
urn:nbn:se:kth:diva-207090 (URN)978-91-7729-434-4 (ISBN)
Public defence
2017-06-13, Kollegiesalen, Brinellvägen 8, Stockholm, 10:00 (English)
Opponent
Supervisors
Note

QC 20170516

Available from: 2017-05-16 Created: 2017-05-15 Last updated: 2017-06-13Bibliographically approved

Open Access in DiVA

No full text

Other links

Publisher's full textScopus

Search in DiVA

By author/editor
Moiseeva, EkaterinaHesamzadeh, Mohammad Reza
By organisation
Electric Power and Energy Systems
In the same journal
European Journal of Operational Research
Other Electrical Engineering, Electronic Engineering, Information Engineering

Search outside of DiVA

GoogleGoogle Scholar

Altmetric score

Total: 14 hits
CiteExportLink to record
Permanent link

Direct link
Cite
Citation style
  • apa
  • harvard1
  • ieee
  • modern-language-association-8th-edition
  • vancouver
  • Other style
More styles
Language
  • de-DE
  • en-GB
  • en-US
  • fi-FI
  • nn-NO
  • nn-NB
  • sv-SE
  • Other locale
More languages
Output format
  • html
  • text
  • asciidoc
  • rtf