6 research outputs found
Efficient bidding for hydro power plants in markets for energy and ancillary services
In order to preserve stability of electricity supply generators must provide ancillary services in addition to energy production. Hydroelectric resources have significant ancillary service capability because of their dynamic flexibility. This paper suggests a solution for optimal bidding for hydro units operating in simultaneous markets for energy and ancillary services by estimating water shadow price from operating parameters of the hydro unit, expectations on prices of energy and ancillary services, and water availability. The model implications are illustrated on a numerical example of a hydro unit operating in markets of New York Independent System Operator. Participation in ancillary services market increases or decreases water shadow price depending on water availability. As a result of participation in ancillary services markets, a unit with water availability given by a capacity factor of 0.6 increases the value of existing generating capacity by 25% and nearly doubles the value of incremental generating capacity
Value of hydro power plants in integrated markets for energy and ancillary services
For a stable supply of electricity power plants are required to provide ancillary services in addition to energy production. This paper suggests a solution for optimal bidding strategy for hydroelectric units operating in markets where both energy and ancillary services are priced simultaneously. The model is illustrated on a numerical example of a hydro unit operating in such markets of New York Independent System Operator. A hydro unit with an average water availability offering its capacity in ancillary services markets in addition to energy market increases the value of existing generating capacity by 25% and nearly doubles the value of capacity upgrades.</p
The integration of the European electricity markets at a turning point: from the regional model to the Third Legislative Package
In this paper we discuss the EU policy on electricity markets integration by reviewing the experience
of the Electricity Regional Initiatives. The regional approach to market integration delivered important
results in areas such as coordination among national transmission system operators, implementation of
market-based mechanisms for cross-border transmission capacity allocation and transparency.
Furthermore, the inclusive governance process lead by ERGEG gave voice to all relevant
stakeholders. However, there are indications that the regional model reached its limit when faced with
the objective of coordinating day-ahead and real-time markets. The unanimity approach at the regional
level made the intra-regional decision-making process extremely slow. Further, inter-regional
integration issues have not been solved yet and attempts to tackle them by prioritising projects in some
Regions weakened the pluralistic attributes of the regional model.
The Third Legislative Energy Package has the potential to overcome some of these shortcomings by
empowering pan-European institutions (ENTSO and ACER) and by involving Member States in the
decision making process. Some weaknesses of the second-package, though, persist in the new
framework. First, there are no provisions ensuring that ENTSO will have appropriate incentives to act
in the interest of European consumers. Second, the Third Package perpetuates the separation between
within-country congestion management – which remains a national issue – and cross-border
congestion management – to be dealt with at the EU level. This two-tier approach is inconsistent with
the highly meshed nature of the European network and is likely to result in inefficient market design.
Further, the implementation of coordinated cross-border and national congestion management
mechanisms requires considering geographically differentiated prices within countries, a politically
unattractive result for most Member States
Market Power in Deregulated Wholesale Electricity Markets: Issues in Measurement and the Cost of Mitigation
An analysis of three recently deregulated markets—California, PJM, and New York—finds that none of them can be regarded as highly competitive, contrary to what conventional measures of market power indicate. Auctions for generation are unlikely to be competitive and costly steps will be needed to mitigate market power, likely eroding any benefits from increased operating efficiency in deregulated markets. Thus, FERC and state legislators need to reexamine the desirability of deregulating the generation portion of the industry.</p