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WP2 – Market designs & regulations allowing optimal development of flexibilities with high RES shares

 

Partners involved

 

 

WP Leader contact: Maxime LAASRI, RTE

Context

Why should we consider market design when studying flexibility?

The rise of flexibility needs emerges from some deep changes in the electricity industry, such as the growth of short-term uncertainty. Those same changes also question the current European market architecture, which was built upon the assumption that conventional power plants should adapt their generation to an inflexible demand. The context evolution invites us to revisit these core principles.

What will this work package bring on the subject?

The role of this work package is to propose some market mechanisms that could enable the development of an optimal European mix of flexibility solutions. Five candidates are considered, from specific improvements of the current zonal market, to more a disruptive switch to a nodal market. All five will be tested and compared in five quantitative studies (see the illustration above), using two different models, to then make recommendations. The reason for using two models is because each of them provides complementary features to evaluate how well a market design performs, especially regarding its accuracy and its uncertainty layer (how the information gets revealed and more precise with time to market players), which are key to the evaluation.

Objectives

  • Explore and propose some market-based solutions for the development of an optimal mix of flexibility sources in Europe
  • Create advanced tools and methodologies for market design analysis

 

 

 

 

 

 

 

WP status (November 2020)

Based on a survey conducted by UPD and NESTER, a set of candidate market designs was selected for analysis. Improved market simulators were then developed by UDE, RTE, and ENSIEL, to simulate those different market designs, notably nodal and zonal markets, at different geographical scopes, with a modelling of weather and generation uncertainties, and flexibility levers (Prometheus/Atlas and JMM/E2M2 tools).

UDE, RTE, and ENSIEL are now performing the first simulations of both nodal and zonal markets. Most first simulations use one of the three scenarios of WP1 at the 2030 time horizon, with up to 860 nodes and 1700 lines and some of the flexibility levers, showing preliminary phenomenon on market prices. One simulation by RTE on the same scope uses data from other sources to model a nodal market on a small region of France. ENSIEL is currently providing direct input to the latter simulation: they already have applied their TSO-DSO interface model to this case, and they are now adapting it to the specificities of the region.

The simulations will be completed by the beginning of next year and shared during a dedicated open session around February 2021.

A list of 77 KPIs was consolidated by UPD as a comprehensive tool to analyze these simulations and assess the performance of each candidate market design. UPD also developed a comprehensive overview of existing and potential sources of revenues for flexibility providers, as an input to the ongoing assessment of the replicability and scalability potential of OSMOSE demonstrations (WP8).

  • Deliverables for download
  • In Deliverable 2.1 “Methodology for error forecasts, a new method and algorithm based on copulas is used to generate forecast errors on load and RES generation time series. The method uses real forecast data to learn and reproduce some hourly updates on load and RES generation forecast.
  • Deliverable 2.2 “Candidate market mechanisms gives a comprehensive review of existing market designs and lists the candidate market designs selected for in-depth study in the project: the two references are Power exchange with zonal pricing and Power pool with nodal pricing. For zonal market, variations will be tested like different product granularity or the co-optimisation of energy and reserve.
  • Milestone 2.2 : First market simulations available.
  • Milestone 2.3: Improved methodology to represent flexibilities on the distribution grids from a transmission grid point of view

 

This project has received funding from the European Union’s Horizon 2020 research and innovation programme under grant agreement n°773406