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I NSTITUTO DE I NVESTIGACIÓN T ECNOLÓGICA. Novel market designs & KPIs . Stakeholder Kick-off Workshop, IEE-Market4RES Brussels, 2014-04-28 Luis Olmos , Pablo Rodilla, Pablo Frías, Camila Fernandes. Need for this task and main objectives .

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Novel market designs kpis

INSTITUTO DE INVESTIGACIÓN TECNOLÓGICA

Novel market designs & KPIs

Stakeholder Kick-off Workshop, IEE-Market4RES

Brussels, 2014-04-28

Luis Olmos , Pablo Rodilla, Pablo Frías, Camila Fernandes


Need for this task and main objectives
Need for this task and main objectives

The deployment of large amounts of RES generation must be compatible with the integration of European electricity markets

This requires implementing some market developments not considered in the European Target Model, which are aimed at:

Encouraging enough firm generation capacity to back-up RES-E generation

Allowing new generation to be installed where it is more efficient

Increase the flexibility of the system to adapt to changes in operation imposed by RES-G

Then, WP3 aims to:

1) Identify main market developments that are pending and main design options for them

2) Provide indicators able to measure the performance of market design options in achieving the aforementioned objectives

Interaction with stakeholders is central to success


Wp3 in market4res
WP3 in Market4RES

WP3

Novel market designs & KPIs

WP2

Opportunities, challenges and risks for RES-E in a European integrated electricity market with full target model implementation

WP6.1

WS1:

Implementation

Target model

WP6.2

WS2:

Implementation

Novel designs

Short term markets

WP6.3

WS2:

Implementation

Novel designs

Long term markets

  • WS1: Short term objectives (2016 - 2020)

WP4

Appropriate new market instruments for RES-E to meet

the 20/20/20 targets

  • WS2: Long term objectives (post 2020 ; 2030-2050)

WP5

Modeling of electricity market design & Quantitative

evaluation of policies for post 2020 RES-E targets


Structure of wp3 main tasks
Structure of WP3: main tasks

Market developments proposed are classified according to the time frame of market operation they are relevant to:

Task 1: Market developments affecting the design of long-term markets

Task 2: Market developments affecting the design of short-term markets

Once market design options to analyze have been identified, we turn on to measuring the performance of the former

Task 3: Assessment of market options (KPIs)

Analyses are to be performed in close cooperation with stakeholders

Task 4: WP3 expert workshop and follow-up consultation event


Work package 3 task description task 3 1 long term markets crm
Work package 3 task descriptionTask 3.1: Long-term markets (CRM)

Capacity Remuneration Mechanisms (CRM) are here to stay

After decades of strong opposition, several European countries are now implementing some kind of CRM

National flawed and uncoordinated designs can impede to seize all the opportunities that cross-border electricity exchanges can offer

Objective of this task

How to further develop CRM national designs to enhance regional electricity market performance

Divided in three subtasks

3.1.1 - General design principles of CRMs

3.1.2 - Participation of RES-E in CRMs

3.1.3 - Cross-border trading of capacity


Work package 3 task description task 3 1 long term markets crm1
Work package 3 task descriptionTask 3.1: Long-term markets (CRM)

3.1.1 - General design principles of CRMs

Identify the most relevant design elements

Define a reference CRM design

How to deal with a context of massive penetration of RES-E

The role of flexibility

The role of demand response

3.1.2 - Participation of RES-E in CRMs

Evaluate the potential participation of RES-E in CRMs

How to evaluate the contribution of RES-E

3.1.3 - Cross-border trading of capacity

One of the hot topics as regards the Internal Electricity Market

How to ensure that no barriers to cross-border trading exist


Work package 3 task description task 3 2 short term markets
Work package 3 task descriptionTask 3.2: Short-term markets

Main pending developments related to the need to:

Better represent operation constraints;

Provide more flexibility;

Allow the participation of RES-G and L

3.2.1 – Representation of the network

Concerns the granularity level of the network model considered

The network model should allow the representation of congestion occurring in the grid… while keeping it a simple as possible

Options that can be considered include nodal pricing, zonal pricing, hybrid zonal pricing

3.2.2 – Timing of short term markets

Coping with uncertainty introduced by RES generation requires getting markets closer to real time

Options are: complementing or replacing day-ahead with intraday or close-to-real-time markets, or hybrid solutions


Work package 3 task description task 3 2 short term markets1
Work package 3 task descriptionTask 3.2: Short-term markets

3.2.1 – Bidding protocols

Trade-off between the level of flexibility of bids, and therefore dispatch efficiency, and the complexity of the dispatch algorithm

Range of options from simple constraints like minimum revenues or block bids, to very sophisticated ones able to reproduce the unit commitment problem

3.2.2 – Participation of RES-E generators and demand in short-term markets

Participation in energy markets:

Imbalance settlement design

Impact on balancing requirements

Appropriate design of intraday markets

Participation in AASS markets

Current rules preventing RES-G and L from participating in markets

Definition of operation situations where provision of AASS is justified


Work package 3 task description task 3 3 definition of kpis
Work package 3 task descriptionTask 3.3: Definition of KPIs

Measuring the performance of proposed market developments is needed to choose the most appropriate options

 KPIs must be defined

KPIs can be classified according to the challenge they relate to

Thus, KPIs that may be considered could include:

Attracting generation capacity and its availability: fuel security; short-term peak demand security; long-term generation adequacy; etc.

Integration and well functioning of the market: trading volume and market prices

Increasing market flexibility: Level of load balancing; Ramp rates of residual demand; Predictability of renewable output

Cost reflectivity of price zones: PTDFs of congested line w.r.t. intra-zonal transactions; Homogeneity of nodal prices within price zones

Profitability of RES-E generation: level of interaction of market with ETS


Work package 3 task description task 3 4 expert workshop and consultation
Work package 3 task descriptionTask 3.4: Expert workshop and consultation

Once options to address deficiencies of the TM are identified, stakeholders will be consulted on:

whether these are the most promising design options

whether performance indicators proposed to assess them are appropriate

Consultation will take place through two channels:

Expert workshop

Consultation process: a consultation document will be addressed to market agents, TSOs, and regulators

Feedback to be used to fine-tune designs and KPIs considered

BRUSSELS

EUROPE

MARCH 2015

MAY 2015



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