Value-Creation Potential from Multi-Market Trading for a Hydropower Producer

Marte Fodstad, Mats Mathisen Aarlott and Kjetil Trovik Midthun
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Marte Fodstad: SINTEF Energy Research, 7034 Trondheim, Norway
Mats Mathisen Aarlott: SINTEF Technology and Society, 7034 Trondheim, Norway
Kjetil Trovik Midthun: SINTEF Technology and Society, 7034 Trondheim, Norway

Energies, 2017, vol. 11, issue 1, 1-15

Abstract: We study a hydropower producer’s potential for value-creation from multi-market trading given the price variations in the markets and the flexibility provided through access to hydro reservoirs. We use a perfect foresight optimization model for a price-taking hydropower producer co-optimizing his trades in the day-ahead, intra-day and balancing markets. The model is used on real market data from Norway, Sweden and Germany. The study shows a theoretical potential for added value when selling energy in multiple markets relative to optimal day-ahead sale. Most of this value is achievable also when the perfect foresight is limited to the period from day-ahead bidding until operation. Flexible production plants achieve the largest relative added values for multi-market sales, and has the largest benefit from a long horizon with perfect foresight.

Keywords: hydropower; multi-market; case study; optimization; trading (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: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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