scholarly journals Financial Transmission Rights (FTR) as a Congestion Management Scheme in Electricity Transmission: Strategic Behavior in a Coupled FTR — Electricity Market Model

2015 ◽  
Keyword(s):  
Electricity Market ◽  
Strategic Behavior ◽  
Congestion Management ◽  
Market Model ◽  
Electricity Transmission ◽  
Financial Transmission Rights ◽  
Management Scheme ◽  
Transmission Rights

scholarly journals Different Approaches Towards Electricity Transmission Expansion

2003 ◽  
Vol 2 (3) ◽  
Author(s):  
Juan Rosellón
Keyword(s):  
Strategic Behavior ◽  
Social Cost ◽  
Transmission Network ◽  
Electricity Transmission ◽  
Transmission Expansion ◽  
Independent System Operator ◽  
System Operator ◽  
Transmission Rights ◽  
Intense Debate

There is an intense debate regarding the best way to attract investment for the long-term expansion of an electricity transmission network. We study three hypotheses: the long-term financialtransmission- right hypothesis; the incentive-regulation hypothesis; and the market-power hypothesis. The first approach derives optimal transmission expansion through auctions of longterm financial transmission rights by an independent system operator. The second provides a Transco with incentives to expand the network by making it face the entire social cost of congestion. The third approach defines optimal transmission expansion according to the strategic behavior of generators. This paper discusses the analytical and practical strengths and weaknesses of each approach.

scholarly journals Insights on Germany’s Future Congestion Management from a Multi-Model Approach

Energies ◽  
2020 ◽  
Vol 13 (16) ◽  
pp. 4176
Author(s):  
Dirk Hladik ◽  
Christoph Fraunholz ◽  
Matthias Kühnbach ◽  
Pia Manz ◽  
Robert Kunze
Keyword(s):  
Electricity Market ◽  
Power Flow ◽  
Power Plants ◽  
Optimal Power Flow ◽  
System Analysis ◽  
Congestion Management ◽  
Market Model ◽  
Design Parameters ◽  
Investment Incentives ◽  
German Market

In Germany, the political decision to phase out nuclear and coal-fired power as well as delays in the planned grid extension are expected to intensify the current issue of high grid congestion volumes. In this article, we investigate two instruments which may help to cope with these challenges: market splitting and the introduction of a capacity mechanism. For this purpose, we carry out a comprehensive system analysis by jointly applying the demand side models FORECAST and eLOAD, the electricity market model PowerACE and the optimal power flow model ELMOD. While a German market splitting has a positive short-term impact on the congestion volumes, we find the optimal zonal delimination determined for 2020 to become outdated by 2035 resulting in new grid bottlenecks. Yet, readjusting the zonal configuration would lower the ability of the market split to provide regional investment incentives. Introducing a capacity mechanism with a congestion indicator allows allocating new power plants in regions with higher electricity demand. Consequently, we find the required congestion management to be substantially reduced in this setting. However, given the large amount of design parameters, any capacity mechanism needs to be carefully planned before its introduction to avoid new inefficiences on the market side.

scholarly journals Exploring the Profitability and Efficiency of Variable Renewable Energy in Spot Electricity Market: Uncovering the Locational Price Disadvantages

Energies ◽  
2019 ◽  
Vol 12 (14) ◽  
pp. 2820
Author(s):  
Ruhang Xu ◽  
Zhilin Liu ◽  
Zhuangzhuang Yu
Keyword(s):  
Renewable Energy ◽  
Electricity Market ◽  
Power Flow ◽  
Optimal Power Flow ◽  
Strategic Behavior ◽  
Market Model ◽  
Ancillary Service ◽  
Service Levels ◽  
Locational Marginal Price ◽  
Strategic Market

While variable renewable energy (VRE) has been developed for decades, VRE market participation is developing relatively slowly, despite the potential economic efficiency it may bring. This paper tries to specify the efficiency of VRE in a deregulated pool-based electricity market. Based on standard pool-based market design, this paper built a direct current optimal power flow (DC-OPF) based simplified 2-settlement spot electricity market model conjugating electricity and ancillary service clearing. To address the outcomes of the imperfect market in the real world, this paper studied the consequences brought by agents’ learning and strategic behaviors. Simulations under different ancillary service levels and reliability cost levels are carried out. The results show that VRE may be unprofitable in the market, especially when learning and strategic behavior is considered. Learning and strategic market behavior will also hamper the role of VRE as a “better” energy source. This paper shows and proves a locational marginal price (LMP) disadvantage phenomenon, which will lead to low profitability of VRE. Three major suggestions are given based on the results.

scholarly journals Application of IRT Models to Selection of Bidding Paths in Financial Transmission Rights Auction: U.S. New England

Energies ◽  
2020 ◽  
Vol 13 (13) ◽  
pp. 3325
Author(s):  
Peter Jang ◽  
Kwanghee Jung ◽  
Mario Beruvides
Keyword(s):  
New England ◽  
Electricity Market ◽  
Item Difficulty ◽  
Latent Trait ◽  
Analytical Framework ◽  
Risk Level ◽  
Financial Transmission Rights ◽  
Congestion Cost ◽  
Transmission Rights ◽  
The U.S

This paper explores a way to apply Item Response Theory (IRT), one of the popular statistical methodologies in measurement and psychometrics, to evaluate Financial Transmission Rights (FTR) paths in the U.S. electricity market. FTR is an energy derivative product to hedge congestion cost risks inherent in constrained transmission lines. In New England, with about 1200 pricing locations, the theoretical combinations of FTR paths amount to 1.4 million in prevailing flows alone. With capital constraints, it is imperative that FTR market participants build the capability to evaluate FTR paths to bid on. IRT provides a framework of how well tests work, and how individual items work on tests, estimating respondents’ latent abilities, and individual item parameters. IRT is utilized to analyze historical electricity data of 2019 for a daily congestion cost of eight customer load zones and one hub in the U.S., New England, for the evaluation of FTR paths. In the analysis, an item represents an FTR path, while item difficulty, item discrimination, and a latent trait variable for the path correspond to the path profitability, risk level, and daily congestion ability, respectively. This paper explores the experimental procedures by which IRT, a psychometric tool, may also be applicable in complex energy markets, providing a consistent and standardized analytical framework to address the issues of selection and prioritization among multiple opportunities. FTR path evaluation is conducted in three steps to determine bid priority paths in FTR auctions: parameter significance tests, ranking on path profitability and risk level, and weighting scores of individual rankings on the two criteria.

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