Carlos Batlle

A simulation model for a competitive generation market

The simulation of a wholesale electricity market should go beyond a simple optimization based on the operating costs of the generating units. A model of a competitive electricity market must consider the market structure, the strategy of the market participants and any other factor that lead to prices different from costs. This paper presents COSMEE, a model of a wholesale electricity market based on simple bids, that estimates expected bid prices and quantities, system hourly prices and generation schedules, taking into account the bidding strategies of generators and the structure of the market. The model reflects the profit-maximizing behavior of the market agents, subject to different types of constraints. COSMEE has been used to simulate a real wholesale market.

An Enhanced Screening Curves Method for Considering Thermal Cycling Operation Costs in Generation Expansion Planning

Generation capacity expansion trends have clearly evolved in the last decades. In the present context, renewable generation technologies are expected to reach large penetration levels. Among other effects, these technologies are changing the scheduling regime (and thus the unit-commitment costs) of the rest of the generating facilities, increasing for instance the need of cycling conventional thermal generation. In this paper we further develop the traditional screening curves technique so as to incorporate a sound representation of the cycling operation of thermal units. The so-resulting approach provides a more comprehensive representation of thermal operation while keeping the screening curves well-known capability to provide valuable analytic insights on the capacity expansion problem.

Modeling the Major Overhaul Cost of Gas-Fired Plants in the Unit Commitment Problem

The operation and maintenance (O&M) costs of gas-turbine-based generation technologies have traditionally been introduced in unit commitment problems by means of simplified formulations (such as the approach of including an additional energy cost adder component). We argue that, in the new context characterized by the increasing need for cycling operation, such simplified approaches do not realistically reflect the impact that these new operation regimes have on the O&M costs for both open and combined cycle gas turbines. We first review the role of the so-called long-term service agreements (LTSA), which is a commonly used type of contract offered by gas-turbine manufacturers to plant owners. We analyze how these contracts implicitly determine the maintenance intervals as a function of the operating regime, and, as a consequence, determine the impact of cycling operation on O&M costs. Based on this analysis, we develop a formulation based on linear constraints that makes possible a realistic modeling of O&M costs (as defined in LTSA contracts) in the unit commitment problem. This formulation is then tested using some examples, so as to illustrate how a proper modeling of these contracts significantly changes the scheduling resulting from the traditional unit commitment problem formulation.

Flexible Short-Term Power Trading: Gathering Experience in EU Countries

Abstract EU power market design has been focused on facilitating trading between countries and for this has defined interfaces for market participants and TSOs between countries. The operation of power systems and markets within countries was not the focus of these developments. This may have contributed to difficulties of defining or implementing a common perspective in particular on intraday and balancing approaches. This motivated us to pursue an in depth reviewof six European power markets to contribute to a better understanding of the common elements, differences and the physical and institutional reasons for these. With this paper we aim to present the main insights emerging from the reviews and to identify where there is a need for alignment of operational aspects and short-term trading arrangements, taking into account system requirements individual member states face in operating their power system.

Emission rights allocation criteria

Contrary to what a naive application of standard economic theory could suggest, correct emission right allocation can be critical in order to assure the economic efficiency of an emission trade system. In this paper, the main criteria that should be fulfilled are reviewed, with an special focus in the current European emission trading system.

Electricity Generation and Wholesale Markets

The generalized worldwide process of restructuring and liberalization of the electric power sector has primarily concerned the generation activity. Although liberalization and restructuring of the power industry has not been universally adopted, it is undoubtedly the prevalent framework in most countries.

Security of Generation Supply in Electricity Markets

As indicated in Chap. 3, calling “liberalization” and, particularly, “deregulation” to the regulatory reforms that have taken place worldwide during the 1990s and early 2000s is somewhat misleading. The main reasons are that only some of the activities involved in the supply of electricity have been subject to an in-depth reform, most governments still have a heavy hand on their power sectors and the volume and complexity of the new regulation is frequently similar, or even greater, than the so-called traditional regulatory framework, see (Borenstein and Bushnell 2000) or (Ruff 2003). This is why the term “restructuring” has been preferred in some electric power systems (particularly in the United States). The subject matter of this chapter, i.e. the need for regulatory intervention to complement electricity markets in order to guarantee security of generation supply, is a good illustration of this point.

A review of key points of an industrial biogas plant. A European perspective

This paper reviews the main technical, operational and economical aspects of a biogas plant. The analysis is focused on the key points of the biogas production process, the current situation of biogas plants in Europe and the advantages, risks and new trends of the production and use of biogas. The paper offers an integrated view of the different aspects involved in a biogas plant as source of renewable energy in contrast with other more analyzed renewable energy sources based mainly on wind or solar energy.

Electricity Regulation: Principles and Institutions

Building a high-rise is subject to many principles, but primarily the laws of physics, which require the foundations to be apt for the materials used and the height of the building, which may otherwise collapse. While any number of buildings can be designed to that requirement, the use to which the structure is to be put reduces the number of alternatives considerably. Similarly, the electricity industry is subject to the laws and principles that govern both the physical characteristics of electricity and also to the fulfilment of the expectations of utilities and consumers. These principles, together with other practical considerations, ultimately limit the number of ways that electricity can be regulated.

Electricity forward and volatility curves computation based on Monte Carlo simulation

As a result of the deregulation processes, liberalized markets, where electricity futures and derivatives are traded, have arisen all over the world. Utilities, consumers, traders and, generally, market agents must do quantitative assessments of their positions. Basic analytical data are the forward and volatility curves of the traded products. However, electricity price dynamics is very different of other commodities prices dynamics. Furthermore, electricity prices of different markets are usually very different of each other. As consequence, most analytical approaches to compute forward and volatility curves, as well as other statistics useful to risk management tasks, are very complex or do not exist. In this paper, we propose to compute the forward and volatility curves by Monte Carlo simulation. The main contribution lies in the used variance reduction techniques, needed to achieve this objective at reasonable computational cost. A case example consisting of the study of the EEX prices is also provided