EconPapers    
Economics at your fingertips  
 

Agent-based analysis of the impact of the imbalance pricing mechanism on market behavior in electricity balancing markets

Reinier A.C. van der Veen, Alireza Abbasy and Rudi A. Hakvoort

Energy Economics, 2012, vol. 34, issue 4, 874-881

Abstract: The imbalance pricing mechanism is an important design variable within European-type electricity balancing markets that determines the incentives given to so-called Balance Responsible Parties (BRPs) to balance their electricity production and consumption portfolio. To analyze the impact of alternative imbalance pricing mechanisms on balancing market performance, an agent-based model has been built, in which the BRPs are the agents that decide autonomously in each round on their balancing strategy based on results in past rounds. Six alternative mechanisms are analyzed. It is concluded that aiming for a small long position is generally the preferable BRP strategy. Different imbalance pricing mechanisms lead to comparable system imbalances, but single pricing results in the lowest imbalance costs for the BRPs and for the market as a whole.

Keywords: Electricity markets; Balancing market; Settlement; Agent-based modeling; Imbalance pricing mechanism (search for similar items in EconPapers)
JEL-codes: C63 L19 (search for similar items in EconPapers)
Date: 2012
References: View references in EconPapers View complete reference list from CitEc
Citations View citations in EconPapers (4) Track citations by RSS feed

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S014098831200076X
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:eneeco:v:34:y:2012:i:4:p:874-881

Access Statistics for this article

Energy Economics is currently edited by R. S. J. Tol, Beng Ang, Lance Bachmeier, Perry Sadorsky, Ugur Soytas and J. P. Weyant

More articles in Energy Economics from Elsevier
Bibliographic data for series maintained by Dana Niculescu ().

 
Page updated 2018-05-29
Handle: RePEc:eee:eneeco:v:34:y:2012:i:4:p:874-881