Distributed Energy Resources: New Markets and New Products

The rapid introduction of Distributed Energy Resources (DER) into the retail/distribution sector of the electric power system has raised questions concerning both the economics and control of the power system. This paper presents one market paradigm that builds upon extension of the logic of Locational Marginal Pricing into the distribution level arguing that this extension is necessary if there are to be competitive forces that bring new technologies to market while at the same time assuring the reliability of service. We introduce three concepts: first that there are only three core products (real power, reactive power and reserves) and that all other products are combinations of these; second that it is necessary to calculate Distributed Locational Marginal Prices (DLMP) in order to value any DER; and third that for there to be a market for DER it should be structured as an economic platform

Economic and environmental evaluation of customers' flexibility participating in operation markets: Application to the meat industry

This paper presents a methodology, which is applied to the meat industry, for the evaluation and assessment of the economical impact of customers participating in operation markets by using the flexibility they may have, as well as the amount of CO2 avoided to be emitted into the atmosphere. The particular market conditions in the Spanish context have been considered. Thus, real prices of operation markets in Spain have been used to evaluate the potential profitability, even if customers are not actually allowed to participate in such markets at the moment. The economic evaluation requires a cost-benefit analysis, as presented in the methodology. The procedure followed evaluates the maximum daily benefit obtained by the customer when offering all its flexibility in operation markets, so that it can make a decision based on the expected benefits. In order to determine the value of this benefit, different aspects are evaluated, including the amount of money saved during the flexibility actions due to the energy not consumed or shifted to cheaper periods, as well as the costs that the customer incurs when a flexibility action is performed. Finally, the obtained results for a typical customer are extrapolated to the whole segment in the country.The authors gratefully acknowledge the contributions of Campofrio Food Group, S.A. This work was supported by the Spanish Government (Ministerio de Ciencia e Innovacion) and FEDER EU funds under Research Project ENE2010-20495-C02-01.Alcázar Ortega, M.; Álvarez Bel, CM.; Domijan, A.; Escrivá Escrivá, G. (2012). Economic and environmental evaluation of customers' flexibility participating in operation markets: Application to the meat industry. Energy. 41(1):368-379. https://doi.org/10.1016/j.energy.2012.03.003S36837941

Value of Lost Load: An efficient economic indicator for power supply security? A literature review

Security of electricity supply has become a fundamental requirement for well-functioning modern societies. Because of its central position in all sections of society, the present paper considers the economic consequences of a power supply interruption. The Value of Lost Load (VoLL) is a monetary indicator expressing the costs associated with an interruption of electricity supply. This paper reviews different methods for calculating VoLL, provides an overview of recently published studies, and presents suggestions to increase the explanatory power and international comparability of VoLL