Cooperative mechanisms for multi-energy complementarity in the electricity spot market

Zhixin Han, Debin Fang, Peiwen Yang and Leyao Lei

Energy Economics, 2023, vol. 127, issue PB

Abstract: Promoting a diversified and sustainable energy mix in the electricity market necessitates the implementation of multi-energy complementarity. However, the absence of effective cooperative mechanisms among diverse power sources causes a significant challenge in maximizing the overall economic benefits of multi-energy complementarity and fostering individual cooperative willingness. This paper employs cooperative game theory to investigate the joint offering and operation of multiple complementary power sources in the electricity spot market, including wind, thermal, and pumped storage. A two-stage stochastic optimization model is established to co-optimize offering strategies at the day-ahead stage and operation policies at the balancing stage for the multi-energy alliance. The Shapley value is used to allocate profits fairly among various power sources. Simulation results show that two- and three-party alliances among wind, thermal, and pumped storage can lead to multiple-win situations in the spot market. The proposed model effectively couples the day-ahead and balancing markets, resulting in higher profits compared to the scenario without coupling. Both wind-thermal and wind-thermal-pumped storage alliances prove highly effective, with a nearly 100% reduction in imbalance power and approximately a 12% increase in wind power absorption. Relatively, the latter alliance performs slightly worse than the former. Furthermore, the wind-thermal-pumped storage alliance achieves a 4.48% carbon emission reduction, surpassing the wind-thermal and wind-pumped storage alliance. This study reveals the cooperation mechanism and its influencing factors among diverse power sources. It provides valuable decision support for stakeholders to achieve effective multi-energy complementarity, mitigate imbalance power, reduce carbon emissions, and increase renewable energy absorption.

Keywords: Multi-energy complementarity; Cooperative game; Electricity spot market; Two-stage stochastic optimization; Offering strategy; Shapley value (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:eneeco:v:127:y:2023:i:pb:s0140988323006060

DOI: 10.1016/j.eneco.2023.107108

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