Network aware local flexibility markets : Business case analysis
The power system is undergoing a period of transformation towards a cleaner, more resilient, and just paradigm based on renewable energy and distributed energy resources. The period of transition from a fossil-fuel based system towards a renewable-based one is full of opportunities, but also challen...
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| Tipo de recurso: | tesis de maestría |
| Fecha de publicación: | 2023 |
| País: | España |
| Institución: | Universitat Politècnica de Catalunya (UPC) |
| Repositorio: | UPCommons. Portal del coneixement obert de la UPC |
| Idioma: | inglés |
| OAI Identifier: | oai:upcommons.upc.edu:2117/393092 |
| Acceso en línea: | https://hdl.handle.net/2117/393092 |
| Access Level: | acceso abierto |
| Palabra clave: | Energy industries -- Management -- Marketing Industrial marketing -- Prices -- Econometric models Electric power systems -- Econometric models -- Forecasting -- Mathematical models Indústries energètiques -- Direcció i administració -- Màrqueting Màrqueting industrial -- Preus -- Models economètrics Sistemes de distribució d'energia elèctrica -- Previsió -- Models matèmatics Àrees temàtiques de la UPC::Economia i organització d'empreses::Màrqueting Àrees temàtiques de la UPC::Energies::Aspectes econòmics |
| Sumario: | The power system is undergoing a period of transformation towards a cleaner, more resilient, and just paradigm based on renewable energy and distributed energy resources. The period of transition from a fossil-fuel based system towards a renewable-based one is full of opportunities, but also challenges. The role of distribution grids in this new paradigm will change due to an increased share of renewable generation assets connected to them, and less predictable load profiles. Active management of distribution grids is not an option anymore, but a necessity to maintain a safe and reliable power system. This thesis work is focused on exploring on such method of active management of the distribution grids using the flexibility from multiple sources available via network aware flexibility market. The particular focus of the work is on exploring the business model of a network aware local flexibility market. Local flexibility markets are one of the options that distribution system operators are exploring to actively manage their grids. This thesis research the business model impact caused by the addition of network aware capabilities into (local) market clearing algorithms. Therefore, it studies through a business case analysis how this innovative solution influences market dynamics (and market participants), and it also studies the impact on the business model of the market operator. Two complementary approaches have been used to evaluate the impact on market dynamics and the impact on the business model. First, for the market dynamics a business case study has been performed. On it, market clearing events have been simulated using the algorithms developed by DTU. Second, for the business model impact analysis the results of the business case have been combined with industry insights gained during discussions along the development of the thesis. From the business case analysis, the main conclusions are that: with enough liquidity in the market the network aware algorithms can perform as good as their non-network aware counterparts. Therefore, on average, market participants will not be affected by the implementation of network aware algorithms. From the market operator perspective, it is true that the use of network aware algorithms requires higher computational power, but this could be expected since the algorithms have added features. When it comes to the business modelling work, interesting discoveries have been made. The implementation of network aware algorithms for market clearing has a direct impact on the market operator business model. The new network aware market operator will have to perform new tasks as: (confidential) data collection and storage, and possibly new roles and responsibilities will be attributed to it. One of the main uncertainties of the business model according to the industrial partners consulted is the liability over failed market clearings. Up until now if the security and quality of supply were bad, the system operator was responsible for that. With network aware local markets, such responsibility is blurred between the system operator and the market operator. In this thesis the study of the business model for a network aware local flexibility market has been performed, giving relevant insights on the opportunities and challenges such business idea entails. Furthermore, during the development of the research work future topics for research have been presented to further explore new business models for local market operators |
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