Towards electricity markets accommodating uncertain offers

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Abstract

The use of renewable energy sources of energy and in particular wind and solar has been on the rise over the last decades with plans to increase it even more. Such developments introduce significant challenges in existing power systems and can result in high electricity prices and costly infrastructure investments. In this paper we propose a new electricity market mechanism whereby the uncertain and dynamic nature of wind power and other stochastic sources is embedded in the market mechanism itself, by modelling producers’ bids as probabilistic estimates. An extension on the bilevel programming formulation of an electricity market, based on the Continuous Ranked Probability Score (CRPS) reduces the impact of poor estimates for both the stochastic producers and the system operator. We introduce a simulation setting which first demonstrates that impact and then proceed to illustrate the main features our market setup and compare it with a conventional electricity market and a standard bilevel setup.
Original languageEnglish
Title of host publication2014 Proceedings of 13th International Workshop on Large-Scale Integration of Wind Power and Transmission Networks
Number of pages6
PublisherIEEE Press
Publication date2014
ISBN (Print)978-3-98 13870-9-4
Publication statusPublished - 2014
Event13th International Workshop on Large-Scale Integration of Wind Power into Power Systems as well as on Transmission Networks for Offshore Wind Plants - Berlin, Germany
Duration: 11 Nov 201413 Nov 2014

Conference

Conference13th International Workshop on Large-Scale Integration of Wind Power into Power Systems as well as on Transmission Networks for Offshore Wind Plants
CountryGermany
CityBerlin
Period11/11/201413/11/2014

Cite this

Papakonstantinou, A., & Pinson, P. (2014). Towards electricity markets accommodating uncertain offers. In 2014 Proceedings of 13th International Workshop on Large-Scale Integration of Wind Power and Transmission Networks IEEE Press.
Papakonstantinou, Athanasios ; Pinson, Pierre. / Towards electricity markets accommodating uncertain offers. 2014 Proceedings of 13th International Workshop on Large-Scale Integration of Wind Power and Transmission Networks. IEEE Press, 2014.
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abstract = "The use of renewable energy sources of energy and in particular wind and solar has been on the rise over the last decades with plans to increase it even more. Such developments introduce significant challenges in existing power systems and can result in high electricity prices and costly infrastructure investments. In this paper we propose a new electricity market mechanism whereby the uncertain and dynamic nature of wind power and other stochastic sources is embedded in the market mechanism itself, by modelling producers’ bids as probabilistic estimates. An extension on the bilevel programming formulation of an electricity market, based on the Continuous Ranked Probability Score (CRPS) reduces the impact of poor estimates for both the stochastic producers and the system operator. We introduce a simulation setting which first demonstrates that impact and then proceed to illustrate the main features our market setup and compare it with a conventional electricity market and a standard bilevel setup.",
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Papakonstantinou, A & Pinson, P 2014, Towards electricity markets accommodating uncertain offers. in 2014 Proceedings of 13th International Workshop on Large-Scale Integration of Wind Power and Transmission Networks. IEEE Press, 13th International Workshop on Large-Scale Integration of Wind Power into Power Systems as well as on Transmission Networks for Offshore Wind Plants, Berlin, Germany, 11/11/2014.

Towards electricity markets accommodating uncertain offers. / Papakonstantinou, Athanasios; Pinson, Pierre.

2014 Proceedings of 13th International Workshop on Large-Scale Integration of Wind Power and Transmission Networks. IEEE Press, 2014.

Research output: Chapter in Book/Report/Conference proceedingArticle in proceedingsResearchpeer-review

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T1 - Towards electricity markets accommodating uncertain offers

AU - Papakonstantinou, Athanasios

AU - Pinson, Pierre

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N2 - The use of renewable energy sources of energy and in particular wind and solar has been on the rise over the last decades with plans to increase it even more. Such developments introduce significant challenges in existing power systems and can result in high electricity prices and costly infrastructure investments. In this paper we propose a new electricity market mechanism whereby the uncertain and dynamic nature of wind power and other stochastic sources is embedded in the market mechanism itself, by modelling producers’ bids as probabilistic estimates. An extension on the bilevel programming formulation of an electricity market, based on the Continuous Ranked Probability Score (CRPS) reduces the impact of poor estimates for both the stochastic producers and the system operator. We introduce a simulation setting which first demonstrates that impact and then proceed to illustrate the main features our market setup and compare it with a conventional electricity market and a standard bilevel setup.

AB - The use of renewable energy sources of energy and in particular wind and solar has been on the rise over the last decades with plans to increase it even more. Such developments introduce significant challenges in existing power systems and can result in high electricity prices and costly infrastructure investments. In this paper we propose a new electricity market mechanism whereby the uncertain and dynamic nature of wind power and other stochastic sources is embedded in the market mechanism itself, by modelling producers’ bids as probabilistic estimates. An extension on the bilevel programming formulation of an electricity market, based on the Continuous Ranked Probability Score (CRPS) reduces the impact of poor estimates for both the stochastic producers and the system operator. We introduce a simulation setting which first demonstrates that impact and then proceed to illustrate the main features our market setup and compare it with a conventional electricity market and a standard bilevel setup.

M3 - Article in proceedings

SN - 978-3-98 13870-9-4

BT - 2014 Proceedings of 13th International Workshop on Large-Scale Integration of Wind Power and Transmission Networks

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Papakonstantinou A, Pinson P. Towards electricity markets accommodating uncertain offers. In 2014 Proceedings of 13th International Workshop on Large-Scale Integration of Wind Power and Transmission Networks. IEEE Press. 2014