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Abstract
High intermittency in the nature of wind power emphasize conceptual revising in the mechanisms of electricity markets with high wind power penetration levels. This paper introduces overmuch price reduction and high price volatility as two adverse consequences in future wind dominant electricity markets. While high price volatility imposes elevated risk levels for both electricity suppliers and consumers, excessive price reduction of electricity is a disincentive for investment in new generation capacity and might jeopardizes system adequacy in long term. A comparative study between marginal to discriminatory pricing mechanisms are conducted in this paper. This particular direction has been chosen because the discriminatory approach is traditionally known for lowering price volatility while gently increasing average price. To this end an adaptive agent based simulator under two pricing mechanisms is developed. The paper indicates discriminatory pricing approach can be beneficial in high penetration of wind power because it alleviates high price variations and spikiness in one hand and prevents overmuch price reduction in wind dominant electricity markets on the other hand.
Original language | English |
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Title of host publication | Proceedings of the 2013 IEEE Power and Energy Society General Meeting (PES) |
Number of pages | 5 |
Publisher | IEEE Press |
Publication date | 2013 |
ISBN (Electronic) | 9781479913015, 978-1-4799-1303-9 |
DOIs | |
Publication status | Published - 2013 |
Event | European Conference on Power Electronics and Applications, EPE 2013 - Lille, France Duration: 3 Sept 2013 → 5 Sept 2013 http://www.epe2013.com/ |
Conference
Conference | European Conference on Power Electronics and Applications, EPE 2013 |
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Country/Territory | France |
City | Lille |
Period | 03/09/2013 → 05/09/2013 |
Internet address |
Series | IEEE Power and Energy Society General Meeting |
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ISSN | 1944-9925 |
Keywords
- Agent-based simulation
- Discriminatory pricing
- Expected revenue
- Intermittent sources
- Marginal pricing
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Dive into the research topics of 'Excessive price reduction and extreme volatility in wind dominant electricity markets; solutions and emerging challenges'. Together they form a unique fingerprint.Projects
- 1 Finished
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Development of a Secure, Economic and Environmentally-friendly Modern Power System
Chen, Z., Bak-Jensen, B., Bak, C. L., Hu, W., Fang, J. & Su, C.
01/04/2010 → 31/12/2015
Project: Research