The performance of renewable-rich wholesale electricity markets with significant energy storage and flexibility

Yimin Zhang, Dominic Davis, Michael J. Brear and Andrea Vecchi

Energy Economics, 2024, vol. 140, issue C

Abstract: This work investigates the technical and financial performance of deeply decarbonised wholesale electricity markets with uncertain variable renewable generation (VRG), uncertain demand and different types of flexibility. It first finds that different combinations of power reserves (i.e. power generation capacity) and energy reserves (i.e. energy storage capacity), can achieve adequate system reliability at similar total costs. However, use of only energy reserves never achieved adequate system reliability, and this looks to be a fundamental challenge to the reliability of systems with only energy reserves but no power reserves. Two independent aspects of wholesale market operations are then found to be the main determinants of system reliability: the length of the unit commitment (UC) schedule prior to dispatch and the degree of operational uncertainty of VRG during dispatch.

Keywords: Electricity market; Uncertainty; Reliability; Energy storage; Energy system modelling; Decarbonisation (search for similar items in EconPapers)
JEL-codes: C61 L94 Q41 Q42 Q47 Q50 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:eneeco:v:140:y:2024:i:c:s0140988324007357

DOI: 10.1016/j.eneco.2024.108026

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