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Energies 2018, 11(4), 729; https://doi.org/10.3390/en11040729

Economically Efficient Design of Market for System Services under the Web-of-Cells Architecture

1
Institute of Physical Energetics, Smart Grid Research Centre, Krīvu iela 11, LV-1006 Rīga, Latvia
2
SINTEF Energy Research, Sem Saelands vei 11, NO-7034 Trondheim, Norway
*
Author to whom correspondence should be addressed.
Received: 13 February 2018 / Revised: 16 March 2018 / Accepted: 20 March 2018 / Published: 23 March 2018
(This article belongs to the Special Issue Methods and Concepts for Designing and Validating Smart Grid Systems)
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Abstract

Significant power sector developments beyond 2020 will require changing our approach towards electricity balancing paradigms and architectures. Presently, new electricity balancing concepts are being developed. Implementation of these in practice will depend on their timeliness, consistency and adaptability to the market. With the purpose of tailoring the concepts to practice, the development of a balancing market is of crucial importance. This article deals with this issue. It aims at developing of a high-level economically efficient market design for the procurement of system balancing products within the Web-of-Cells architecture. Literature and comparative analysis methods are applied to implement the aim. The analysis results show that a more efficient balancing capacity allocation process should be carried out in a competitive way with closer allocation time to real-time, especially with increased penetration of renewable energy sources. Bid time units, the timing of the market, procurement and remuneration schemes as well pricing mechanisms are the most decisive elements of the market. Their respective advantages and disadvantages are analyzed in the article, as well as their analysis is done against the selected assessment criteria. The results of the analysis show that seeking to improve the operational efficiency of the market, the sequential approach to the market organization should be selected and short-term market time units should be chosen. It is expected that price efficiency could be improved by establishing an organized market where standardized system balancing products should be traded. The balance service providers, who own capital expenditures (CAPEX) sensitive production units, should be remunerated both for the availability of balancing capacities and for their utilization. Uniform pricing rule and cascading procurement principal should be applied to improve the utilization efficiency. View Full-Text
Keywords: market design; market design elements; Web-of-Cells; procurement scheme; remuneration scheme; pricing scheme; cascading procurement market design; market design elements; Web-of-Cells; procurement scheme; remuneration scheme; pricing scheme; cascading procurement
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Bobinaite, V.; Obushevs, A.; Oleinikova, I.; Morch, A. Economically Efficient Design of Market for System Services under the Web-of-Cells Architecture. Energies 2018, 11, 729.

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