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A description of the operative decision-making process of a power generating company on the Nordic electricity market
KTH, School of Electrical Engineering (EES), Electric Power Systems.ORCID iD: 0000-0002-2016-1739
Workgroup for Infrastructure Policy, Berlin University of Technology, Berlin, Germany; Department of Energy, Transportation, Environment, German Institute for Economic Research (DIW Berlin), Berlin, Germany.
KTH, School of Electrical Engineering (EES), Electric Power Systems.ORCID iD: 0000-0002-8189-2420
2014 (English)In: Energy Systems, Springer Verlag, ISSN 1868-3967, E-ISSN 1868-3975, Vol. 5, no 2, 349-369 p.Article in journal (Refereed) Published
Abstract [en]

In a liberalised electricity market, power generating companies face various trading possibilities. In addition, they have to take scheduling decisions. Both kinds of decisions are affected by uncertainties, e.g. power plant outages, uncertain market prices for electricity or imperfect wind power forecasts. This paper presents an overview of the decision-making process of a power generating company on the Nordic electricity market and illustrates how uncertainties affect this process. As a power generating company’s return on investment arises - at least partly - from its trading and scheduling decisions, it is important to optimise those decisions. Therefore, selected optimisation models are listed in a condensed manner. The paper also includes a both detailed and comprehensive description of the market design in the Nordic countries.

Place, publisher, year, edition, pages
Springer, 2014. Vol. 5, no 2, 349-369 p.
Keyword [en]
Electricity trading, Power producer, Nordic power system, Decisions under uncertainty, Bidding strategy, Risk management
National Category
Other Electrical Engineering, Electronic Engineering, Information Engineering
Identifiers
URN: urn:nbn:se:kth:diva-140704DOI: 10.1007/s12667-013-0104-2Scopus ID: 2-s2.0-84901004341OAI: oai:DiVA.org:kth-140704DiVA: diva2:692290
Projects
Elektra 36141: Korttidsplanering av vatten-värmekraftsystem vid stora mängder vindkraft: System-perspektivet
Note

QC 20140923

Available from: 2014-01-30 Created: 2014-01-30 Last updated: 2017-12-06Bibliographically approved
In thesis
1. Design of Electricity Markets for Efficient Balancing of Wind Power Generation
Open this publication in new window or tab >>Design of Electricity Markets for Efficient Balancing of Wind Power Generation
2015 (English)Doctoral thesis, comprehensive summary (Other academic)
Abstract [en]

Deploying wind power to a larger extent is one solution to reduce negative environmental impacts of electric power supply. However, various challenges are connected with increasing wind power penetration levels. From the perspective of transmission system operators, this includes balancing of varying as well as - to some extent - uncertain generation levels. From the perspective of power generating companies, changes in the generation mix will affect the market's merit order and, hence, their profits. This thesis focuses on provision and use of flexibility in the Nordic electricity market.

First, this thesis studies wind power variations and accuracy of wind power forecasts in Sweden using statistical methods. Even though today’s wind penetration levels are still low in Sweden, power systems and electricity markets have to cope with these characteristics of variations and forecast errors to a larger extent in future.

Second, it investigates to which extent an increased exchange and use of flexibility that is available in the intraday time-frame could efficiently facilitate system balancing and whether this would also be profitable from the power generating companies' perspective. Here, a simulation model is developed that reflects important aspects of production planning and trading decisions in the intraday time-frame. In a first case study, it is shown that the benefits of internal rescheduling strongly depend on the costs to adjust production plans in the intraday time-frame as compared to real-time. In a second case study, it becomes evident that trading flexibility in the intraday time-frame can reduce the need for system balancing more efficiently than internal rescheduling within each balance responsible party.

Motivated by the positive gains of intraday trading and the challenge of appropriately modelling continuous intraday markets, trading activity and price development on Elbas is investigated. The results provide insights into trading behaviour on a continuous intraday market and show that trading is not always in accordance to the power system's physical situation. To the extent to which better information and adaptations in the market design could improve the market participants' base for trading decisions, policy recommendations and further research questions areas suggested.

Abstract [sv]

Att använda vindkraft i en större utsträckning är en möjlighet att minska elproduktionens negativa miljöpåverkan. Det finns dock också olika utmaningar med stora mängder vindkraft. Från ett systemperspektiv gäller det till exempel att hålla balansen mellan tillförsel och konsumtion av el. Från elproducenternas perspektiv bör vindkraftens påverkan på elmarknaden nämnas eftersom det påverka aktörernas vinster. Avhandlingen titta närmare in i hur man kan få tillgång till mer flexibilitet på produktionssidan.

Avhandlingen består av tre delar. För det första undersöks variationer och prognosfel av vindkraft i Sverige med hjälp av statistiska metoder. Även om andel vindkraft hittills är låg i Sverige, behöver elsystemet och elmarknader i framtiden hantera samma egenskaper av själva variationer och prognosfel som idag men i en större utsträckning.

För det andra undersöks hur den flexibiliteten som finns i tidshorisonten några timmar innan leveranstimmen kan utnyttjas för att integrera vindkraften på ett sätt som är både fördelaktigt från systemets och från aktörernas perspektiv. Undersökningen sker med hjälp av en simuleringsmodell som omfattar viktiga delar i produktionsplanering och intradayhandel. I en fallstudie uppvisas att vinster av intern omplanering är i högsta grad beroende på kostnadsskillnaden mellan omplanering några timmar innan leveranstimmen och anpassning av körscheman under själva leveranstimmen. Resultat av ytterligare en fallstudie uppvisar att det är betydligt billigare och mer effektivt att använda intradayhandel istället för intern omplanering för att utnyttja den befintliga flexibiliteten och för att reducera obalanser som systemoperatörer annars behöver ta hand om under leveranstimmen.

Detta är en anledning till att undersöka handelsmönster på Elbas som är en intradaymarknad med kontinuerlig handel. En annan anledning till den här tredje delen är utmaningarna i att modellera kontinuerlig intradayhandel. Studien beskriver handelsaktiviteten på Elbas och hur priserna utvecklas under handelstiden. Ett resultat är att handeln inte alltid återspeglar den fysiska situationen i elsystemet. I den utsträckningen som ett snabbare informationsflöde och förändringar i marknadsdesignen kunde förbättrar aktörernas underlag för intradayhandel, föreslås förbättringar och öppna forskningsfrågor.

Place, publisher, year, edition, pages
Stockholm: KTH Royal Institute of Technology, 2015. viii, 84 p.
Series
TRITA-EE, ISSN 1653-5146 ; 2015:031
Keyword
wind power variations, forecast errors, market design, adjustment markets, trading decisions, continuous intraday trading, variable renewable energy
National Category
Energy Systems
Research subject
Electrical Engineering
Identifiers
urn:nbn:se:kth:diva-171063 (URN)978-91-7595-652-7 (ISBN)
Public defence
2015-10-09, H1, Teknikringen 33, KTH, Stockholm, 10:15 (English)
Opponent
Supervisors
Projects
Elektra 36141: Korttidsplanering av vatten-värmekraftsystem vid stora mängder vindkraft: System-perspektivet
Note

QC 20150911

Available from: 2015-09-11 Created: 2015-07-14 Last updated: 2015-09-11Bibliographically approved

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Scharff, RichardSöder, Lennart

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