Evaluating the profitability of flexibility

Juan Ma, Vera Silva, Luis F. Ochoa, Daniel S. Kirschen, Regine Belhomme

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    Abstract

    As wind capacity becomes a larger component of the generation portfolio, more flexibility is required to cope with its uncertain and variable nature. In a competitive market environment, the provision and development of this flexibility is driven by the remuneration of flexibility providers. This paper proposes an approach to quantify the profit that market participants derive from providing flexibility services. This is based on the simulation of forward (day-ahead) and real-time balancing markets. In addition, a more flexible market design (rolling commitment) in which a periodic re-optimization is performed to take advantage of updated wind. Test results based on the IEEE RTS-96 are used to compare the profitability of flexibility for different market designs and to assess the effect of the wind forecast error and other parameters on this profitability. The results have shown that with the proposed market design and the associated payment scheme, generators can obtain profit for providing flexibility services as wind penetration increases and the error of the wind forecast and the flexible market design has a significant influence on this profitability. © 2012 IEEE.
    Original languageEnglish
    Title of host publicationIEEE Power and Energy Society General Meeting|IEEE Power Energy Soc. Gen. Meet.
    DOIs
    Publication statusPublished - 2012
    Event2012 IEEE Power and Energy Society General Meeting, PES 2012 - San Diego, CA
    Duration: 1 Jul 2012 → …

    Conference

    Conference2012 IEEE Power and Energy Society General Meeting, PES 2012
    CitySan Diego, CA
    Period1/07/12 → …

    Keywords

    • day-ahead market
    • flexibility
    • generation profits
    • integration of wind generation
    • real-time balancing market
    • rolling-commitment

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