Variable Renewable Energy and Market Design: New Products and a Real-World Study

Hugo Algarvio, Fernando Lopes, António Couto, Ana Estanqueiro and João Santana
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Hugo Algarvio: LNEG–National Laboratory of Energy and Geology, Est. Paço Lumiar 22, 1649-038 Lisbon, Portugal
Fernando Lopes: LNEG–National Laboratory of Energy and Geology, Est. Paço Lumiar 22, 1649-038 Lisbon, Portugal
António Couto: LNEG–National Laboratory of Energy and Geology, Est. Paço Lumiar 22, 1649-038 Lisbon, Portugal
Ana Estanqueiro: LNEG–National Laboratory of Energy and Geology, Est. Paço Lumiar 22, 1649-038 Lisbon, Portugal
João Santana: Instituto Superior Técnico, 1049-001 Lisbon, Portugal

Energies, 2019, vol. 12, issue 23, 1-17

Abstract: Most existing energy markets (EMs) were not designed to take into account an active participation of variable renewable energy (VRE). This situation results typically in imbalances and substantial costs in balancing markets. Such costs are reflected both in the energy and the VRE parts of the consumer tariffs. Both appropriate market products and new elements of market design may largely facilitate the large-scale integration of VRE in EMs. Accordingly, this article presents a new bilateral energy contract and introduces two new marketplaces that can contribute to reduce the imbalances resulting from VRE producers. It also presents a study conducted with the help of an agent-based tool, called MATREM. The results indicate a significant decrease in the imbalances and the associated costs.

Keywords: day-ahead market; balancing market; bilateral trading; market design; variable renewable energy; agent-based simulation; MATREM system (search for similar items in EconPapers)
JEL-codes: Q Q0 Q4 Q40 Q41 Q42 Q43 Q47 Q48 Q49 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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