Michael Martin Belsnes

Simulating equilibrium prices in oligopoly power markets

One of the main objectives of deregulation has been to achieve more efficient power systems. Exercise of market power can significantly increase prices in the power market thereby reducing the efficiency. This makes it important for regulatory bodies to survey and intervene if the market is malfunctioning. In hydropower systems this is extra difficult to reveal because the resource for the supply side is stochastic in its nature. In this paper a method for simulation of the price establishment in power systems is suggested. The characteristics of this model are discussed using the English power market as a case.

Quota modeling in hydrothermal systems

This paper proposes methods for medium- and long term scheduling in hydrothermal power systems with different emissions quota schemes included. Based on techniques used for hydropower scheduling, which has similarities to quota handling, a solution for quota schemes with a fixed volume is established using stochastic dual dynamic optimization techniques (SDDP). Handling stochastic elements is a part of hydropower scheduling; in the paper we extend the SDDP approach adding quota markets with uncertain prices to the optimization model. Using the above approaches a set of options for handling quota systems is available, accounting for the situation that even though quotas are on the international agenda it is still uncertain exactly what quota scheme will be adapted. The paper presents results from two cases of quota modeling together with a description of the current Danish quota system. The first case shows modeling of a fixed quota and the second case deal with a quota market with uncertain prices.

Balancing needs and measures in the future West Central European power system with large shares of wind and solar resources

The future European power system will include large shares of variable wind and solar resources. This paper analyses the variability for the eHighway 2050 scenarios (from the EU 7th Framework project) by modelling wind and solar resources from the COSMO-EU model. It quantifies the variability for the countries in West Central Europe, separate for each country, and integrated assuming there is no transmission limitations. The analysis results show that integration of systems by grids will have a smoothing effect on the variability. However, main challenges with periodically very low output will remain. The paper quantifies need for balancing taking present and future load profiles into consideration. The paper shows that many aggregated small-scale batteries only will have a limited effect on the need for balancing beyond a few hours. Finally, the paper discusses how the large reservoirs in the Norwegian hydropower system may serve to the balancing needs.

Value of additional Norwegian hydropower to the European electricity system

The increase of volatile generation from wind and solar power in Europe leads to a higher demand for flexibility in the electrical energy system. As part of the HydroBalance project this paper assesses the potential of Norwegian hydropower to provide this flexibility to the European energy markets by simulating to different scenarios for the expansion of hydropower in Norway. A comparison of the resulting cost reduction of variable system costs with necessary investment costs shows that there is an economic benefit of Norwegian hydropower to the European system especially when providing cross-border balancing.