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Special Issue "Innovation, Policy, and Regulation in Electricity Markets"

A special issue of Energies (ISSN 1996-1073). This special issue belongs to the section "I: Energy Economics and Policy".

Deadline for manuscript submissions: closed (30 April 2021) | Viewed by 14829

Special Issue Editors

Prof. Michael Pollitt
E-Mail Website
Guest Editor
Judge Business School, University of Cambridge, Cambridge, UK
Interests: electricity market design and regulation
Prof. Leonardo Meeus
E-Mail Website
Guest Editor
Florence School of Regulation, European University Institute, 9, 50014 Fiesole FI, Italy
Interests: electricity market design and regulation
Prof. Lynne Kiesling
E-Mail Website
Guest Editor
Institute for Regulatory Law & Economics, Carnegie Mellon University, Pittsburgh, PA, USA
Interests: electricity market design and regulation

Special Issue Information

Dear Colleagues,

The rise of intermittent renewable generation, the coming mass penetration of electric vehicles and moves to decarbonise the gas grid are leading to widespread innovation experiments within electricity systems and their associated markets. These innovative experiments give rise to policy and regulatory questions which must be addressed if innovations are to become business as usual within the electricity grid. 

This special issue will explore lessons from electricity innovation experiments across the world and what implications they have for policy and regulation. We invite papers on experimental evidence on, inter alia: 

  • Local electricity markets run by distribution system operators (DSOs) 
  • DSO-TSO (transmission system operator) market co-ordination 
  • New system operator (SO) product markets 
  • Transactive energy pilots
  • Smart pricing experiments to manage renewable generation 
  • Smart EV charging 
  • Use of big data, AI and machine learning within electricity systems 
  • Power to hydrogen projects 

Authors are invited to use their papers to describe the nature of the experiments they discuss, the results of the experiments and what implications they have in the need to change existing policies and regulatory arrangements. Papers which discuss the results of completed innovation projects and/or compare multiple innovation projects are particularly encouraged.

Prof. Michael Pollitt
Prof. Leonardo Meeus
Prof. Lynne Kiesling
Guest Editors

Manuscript Submission Information

Manuscripts should be submitted online at www.mdpi.com by registering and logging in to this website. Once you are registered, click here to go to the submission form. Manuscripts can be submitted until the deadline. All submissions that pass pre-check are peer-reviewed. Accepted papers will be published continuously in the journal (as soon as accepted) and will be listed together on the special issue website. Research articles, review articles as well as short communications are invited. For planned papers, a title and short abstract (about 100 words) can be sent to the Editorial Office for announcement on this website.

Submitted manuscripts should not have been published previously, nor be under consideration for publication elsewhere (except conference proceedings papers). All manuscripts are thoroughly refereed through a single-blind peer-review process. A guide for authors and other relevant information for submission of manuscripts is available on the Instructions for Authors page. Energies is an international peer-reviewed open access semimonthly journal published by MDPI.

Please visit the Instructions for Authors page before submitting a manuscript. The Article Processing Charge (APC) for publication in this open access journal is 2200 CHF (Swiss Francs). Submitted papers should be well formatted and use good English. Authors may use MDPI's English editing service prior to publication or during author revisions.

Keywords

  • Distribution system operator
  • Local electricity markets
  • Smart pricing
  • Transactive energy
  • Smart charging
  • Big data in electricity
  • Power to hydrogen

Published Papers (12 papers)

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Editorial

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Editorial
Special Issue “Innovation, Policy, and Regulation in Electricity Markets”
Energies 2021, 14(19), 6202; https://doi.org/10.3390/en14196202 - 28 Sep 2021
Viewed by 534
Abstract
The rise of intermittent renewable energy generation, the coming mass penetration of electric vehicles and moves to decarbonise the gas grid are leading to widespread innovation experiments within electricity systems and their associated markets [...] Full article
(This article belongs to the Special Issue Innovation, Policy, and Regulation in Electricity Markets)

Research

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Article
How to Procure Flexibility Services within the Electricity Distribution System: Lessons from an International Review of Innovation Projects
Energies 2021, 14(15), 4475; https://doi.org/10.3390/en14154475 - 24 Jul 2021
Cited by 4 | Viewed by 1079
Abstract
The aim of this paper is to analyse and evaluate the deployment of smart platforms (operated by distribution system operators—DSOs—or by independent parties) in key jurisdictions that facilitate the trading of flexibility services—primarily by DSOs. We look at key innovation projects/initiatives from seven [...] Read more.
The aim of this paper is to analyse and evaluate the deployment of smart platforms (operated by distribution system operators—DSOs—or by independent parties) in key jurisdictions that facilitate the trading of flexibility services—primarily by DSOs. We look at key innovation projects/initiatives from seven jurisdictions, including Australia, France, Germany, Great Britain, Japan, The Netherlands and Norway. We have deliberately selected 13 use cases that operate under different regulatory frameworks and market rules, and have been recently implemented (from 2017 onwards). With the selection of key use cases this study seeks to discuss the different smart architecture solutions and main capabilities across different demonstrators and their relationship to business as usual. It also analyses flexibility market designs, identifies main characteristics, and compares different price formation schemes and procurement methods. The value of flexibility for DSOs is also discussed. Full article
(This article belongs to the Special Issue Innovation, Policy, and Regulation in Electricity Markets)
Article
The Role of Regulators in Promoting the Procurement of Flexibility Services within the Electricity Distribution System: A Survey of Seven Leading Countries
Energies 2021, 14(14), 4073; https://doi.org/10.3390/en14144073 - 06 Jul 2021
Cited by 2 | Viewed by 902
Abstract
This paper identifies and explores regulatory issues that may have an impact on the use of flexibility services by distribution utilities to solve grid constraints. This can be done by flexible distributed energy resources which can be instructed, for instance, to reduce export [...] Read more.
This paper identifies and explores regulatory issues that may have an impact on the use of flexibility services by distribution utilities to solve grid constraints. This can be done by flexible distributed energy resources which can be instructed, for instance, to reduce export generating capacity or increasing consumption. We want to identify how regulation can better support the development of the future distribution utility in its role as neutral market facilitator, enabling more competition in local flexibility markets and optimal use of resources. A set of questionnaires were designed to capture the insights around important aspects of the regulation of flexibility markets (utilities’ network incentives, network tariff structure, market design for flexibility markets, etc.). These were sent to distribution utilities, energy regulators, energy marketplaces, energy associations and relevant experts from seven jurisdictions. The responses suggest a collective interest in the procurement of flexibility services by distribution utilities from distributed energy resources. New regulations, the adaptation of current rules and recent consultations reflect this. However, the amount of progress with and preferences for key regulatory changes differ across jurisdictions. Full article
(This article belongs to the Special Issue Innovation, Policy, and Regulation in Electricity Markets)
Article
Welcoming New Entrants into European Electricity Markets
Energies 2021, 14(13), 4051; https://doi.org/10.3390/en14134051 - 05 Jul 2021
Cited by 3 | Viewed by 1488
Abstract
In this review paper, we select four important waves of new entrants that knocked on the door of European electricity markets to illustrate how market rules need to be continuously adapted to allow new entrants to come in and push innovation forward. The [...] Read more.
In this review paper, we select four important waves of new entrants that knocked on the door of European electricity markets to illustrate how market rules need to be continuously adapted to allow new entrants to come in and push innovation forward. The new entrants that we selected are utilities venturing into neighbouring markets after establishing a strong position in their home market, utility-scale renewables project developers, asset-light software companies aggregating smaller consumers and producers, and different types of communities. We show that well-intentioned rules designed for certain types of market participants can (unintentionally) become obstacles for new entrants. We conclude that the evolution of market rules illustrates the importance of dynamic regulation. At the start of the liberalisation process the view was that we would deregulate or re-regulate the sector after which the role of regulators could be reduced. However, their role has only increased. New players tend to improve the sustainability of the electricity sector in environmental, social, or economic terms but might also present new risks that require intervention by regulators. Full article
(This article belongs to the Special Issue Innovation, Policy, and Regulation in Electricity Markets)
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Article
Opening Up Transactive Systems: Introducing TESS and Specification in a Field Deployment
Energies 2021, 14(13), 3970; https://doi.org/10.3390/en14133970 - 02 Jul 2021
Cited by 2 | Viewed by 1309
Abstract
Transactive energy systems (TS) use automated device bidding to access (residential) demand flexibility and coordinate supply and demand on the distribution system level through market processes. In this work, we present TESS, a modularized platform for the implementation of TS, which enables the [...] Read more.
Transactive energy systems (TS) use automated device bidding to access (residential) demand flexibility and coordinate supply and demand on the distribution system level through market processes. In this work, we present TESS, a modularized platform for the implementation of TS, which enables the deployment of adjusted market mechanisms, economic bidding, and the potential entry of third parties. TESS thereby opens up current integrated closed-system TS, allows for the better adaptation of TS to power systems with high shares of renewable energies, and lays the foundations for a smart grid with a variety of stakeholders. Furthermore, despite positive experiences in various pilot projects, one hurdle in introducing TS is their integration with existing tariff structures and (legal) requirements. In this paper, we therefore describe TESS as we have modified it for a field implementation within the service territory of Holy Cross Energy in Colorado. Importantly, our specification addresses challenges of implementing TS in existing electric retail systems, for instance, the design of bidding strategies when a (non-transactive) tariff system is already in place. We conclude with a general discussion of the challenges associated with “brownfield” implementation of TS, such as incentive problems of baseline approaches or long-term efficiency. Full article
(This article belongs to the Special Issue Innovation, Policy, and Regulation in Electricity Markets)
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Article
Constrained Optimization as the Allocation Method in Local Flexibility Markets
Energies 2021, 14(13), 3932; https://doi.org/10.3390/en14133932 - 30 Jun 2021
Cited by 4 | Viewed by 724
Abstract
Local flexibility markets or smart markets are new tools used to harness regional flexibility for congestion management. In order to benefit from the available flexibility potential for grid-oriented or even grid-supportive applications, complex but efficient and transparent allocation is necessary. This paper proposes [...] Read more.
Local flexibility markets or smart markets are new tools used to harness regional flexibility for congestion management. In order to benefit from the available flexibility potential for grid-oriented or even grid-supportive applications, complex but efficient and transparent allocation is necessary. This paper proposes a constrained optimization method for matching the flexibility demand of grid operators to the flexibility supply using decentralized flexibility options located in the distribution grid. Starting with a definition of the operational and stakeholder environment of smart market design, various existing approaches are analyzed based on a literature review and a resulting meta-analysis. In the next step, a categorization of the allocation method is conducted followed by the definition of the optimization goal. The optimization problem, including all relevant input parameters, is identified and formulated by introducing the relevant boundary conditions and constraints of flexibility demand and offers. A proof of concept of the approach is presented using a case study and the Altdorfer Flexmarkt (ALF) field test within the project C/sells. In this paper, we analyze the background of the local flexibility market, provide the methodology (including publishing the code of the matching mechanism), and provide the results of the field test. Full article
(This article belongs to the Special Issue Innovation, Policy, and Regulation in Electricity Markets)
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Article
Community Energy Groups: Can They Shield Consumers from the Risks of Using Blockchain for Peer-to-Peer Energy Trading?
Energies 2021, 14(12), 3569; https://doi.org/10.3390/en14123569 - 15 Jun 2021
Cited by 4 | Viewed by 950
Abstract
Peer-to-peer (P2P) energy trading is emerging as a new mechanism for settling the exchange of energy between renewable energy generators and consumers. P2P provides a mechanism for local balancing when it is facilitated through distributed ledgers (‘blockchains’). Energy communities across Europe have uncovered [...] Read more.
Peer-to-peer (P2P) energy trading is emerging as a new mechanism for settling the exchange of energy between renewable energy generators and consumers. P2P provides a mechanism for local balancing when it is facilitated through distributed ledgers (‘blockchains’). Energy communities across Europe have uncovered the potential of this technology and are currently running pilots to test its applicability in P2P energy trading. The aim of this paper is to assess, using legal literature and legislation, whether the legal forms available to energy communities in the United Kingdom (UK) can help resolve some of the uncertainties around the individual use of blockchain for P2P energy trading. This includes the legal recognition of ‘prosumers’, the protection of their personal data, as well as the validity of ‘smart contracts’ programmed to trade energy on the blockchain network. The analysis has shown that legal entities, such as Limited Liability Partnerships and Co-operative Societies, can play a crucial role in providing the necessary framework to protect consumers engaging in these transactions. This is particularly the case for co-operatives, given that they can hold members liable for not respecting the rules set out in their (compulsory) governing document. These findings are relevant to other European countries, where the energy co-operative model is also used. Full article
(This article belongs to the Special Issue Innovation, Policy, and Regulation in Electricity Markets)
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Article
DSO Flexibility Market Framework for Renewable Energy Community of Nanogrids
Energies 2021, 14(12), 3460; https://doi.org/10.3390/en14123460 - 11 Jun 2021
Cited by 5 | Viewed by 1024
Abstract
With the introduction of the renewable energy communities in the current electrical market environment, it becomes possible to aggregate small generation resources and users’ loads to exchange power within the aggregation and at the same time provide services to the electrical system. The [...] Read more.
With the introduction of the renewable energy communities in the current electrical market environment, it becomes possible to aggregate small generation resources and users’ loads to exchange power within the aggregation and at the same time provide services to the electrical system. The renewable energy community of users equipped with nanogrid technology allows performing an adequate level of flexibility. It may be the solution to coordinate in the best possible way the energy resources in order to increase the community self-consumption and to provide ancillary services to the grid. In this paper, a model for the interaction between the Distribution System Operator (DSO)—Transmission System Operator (TSO) and the energy community based on nanogrids is proposed and an operational example is presented. Full article
(This article belongs to the Special Issue Innovation, Policy, and Regulation in Electricity Markets)
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Article
Integration of Flexibility from Distributed Energy Resources: Mapping the Innovative Italian Pilot Project UVAM
Energies 2021, 14(7), 1910; https://doi.org/10.3390/en14071910 - 30 Mar 2021
Cited by 7 | Viewed by 1123
Abstract
In light of the advancing energy transition and an increasing amount of intermittent renewable energy to be integrated, flexibility from distributed energy resources will be key. In this paper, the Italian UVAM (Unità Virtuali Abilitate Miste, i.e., virtually aggregated mixed units) project, one [...] Read more.
In light of the advancing energy transition and an increasing amount of intermittent renewable energy to be integrated, flexibility from distributed energy resources will be key. In this paper, the Italian UVAM (Unità Virtuali Abilitate Miste, i.e., virtually aggregated mixed units) project, one of the biggest pilots in Europe to serve this purpose, is critically reviewed and mapped after two years of operation. The pilot is analyzed on a global level as well as the individual participant level. Based on the extensive analysis of actual market data, different strategies of participating companies to obtain capacity in accordance with the pilot project’s design are identified. Furthermore, the specific bidding strategies of individual participating units on the balancing market are outlined. Alongside this, the overall pilot project’s market integration, in terms of offered and accepted bids, is depicted. The thorough data analysis, therefore, serves as an input and fundamental building block for future electricity market modeling. Comprehending specific data from the coronavirus disease 2019 (COVID-19) pandemic, provides insights for future high renewable-energy scenarios. Based on the analysis findings, valuable deliverables are devised for both policy-makers and decision-makers who aim to leverage the flexibility potential of distributed resources. Full article
(This article belongs to the Special Issue Innovation, Policy, and Regulation in Electricity Markets)
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Article
The Impact of Smart Prepaid Metering on Non-Technical Losses in Ghana
Energies 2021, 14(7), 1852; https://doi.org/10.3390/en14071852 - 26 Mar 2021
Cited by 4 | Viewed by 1973
Abstract
The high incidence of electricity theft, meter tampering, meter bypassing, reading errors, and defective and aged meters, among others, increases utility losses, especially non-technical losses (NTL). A utility in Ghana piloted a non-technical loss reduction program in 2019 to replace postpaid meters with [...] Read more.
The high incidence of electricity theft, meter tampering, meter bypassing, reading errors, and defective and aged meters, among others, increases utility losses, especially non-technical losses (NTL). A utility in Ghana piloted a non-technical loss reduction program in 2019 to replace postpaid meters with anti-tamper, anti-fraud, and anti-theft smart prepaid meters. By using customer-level residential billing panel data from 2018 to 2019 obtained from the utility, we assess the effectiveness of this program using the difference-in-differences fixed-effect approach. On average, the results indicated that the reported amount of customers’ monthly electricity consumption increases by 13.2% when any tampered postpaid meter is replaced with a smart prepaid meter, indicating the NTLs by customers. We further employed quantile difference-in-differences regression and observed that reported energy consumption has increased for all households except those at the lower quantile (25th quantile). We conclude that smart prepaid metering could be a remedy to reduce NTLs for the electricity distribution sector in areas where electricity theft is rampant. Full article
(This article belongs to the Special Issue Innovation, Policy, and Regulation in Electricity Markets)
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Review

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Review
Analysis of New Flexibility Market Models in Europe
Energies 2021, 14(12), 3521; https://doi.org/10.3390/en14123521 - 13 Jun 2021
Cited by 10 | Viewed by 2079
Abstract
To identify the trends in new flexibility markets, a set of market and aggregator platforms were selected and compared. The analyzed initiatives are relevant to consider alternative designs for European electricity markets. This review proposes a common methodology for analyzing these market models [...] Read more.
To identify the trends in new flexibility markets, a set of market and aggregator platforms were selected and compared. The analyzed initiatives are relevant to consider alternative designs for European electricity markets. This review proposes a common methodology for analyzing these market models by comparing their description, market structure, market timing, and implementation. Furthermore, a range of policy implications and future research directions towards implementing these markets are presented. The results provide compelling evidence that the new market models represent a promising business with technical and economic justification, as they incentivize the uptake of flexibility from distributed resources by providing services to Distribution System Operators (DSOs) in coordination with Transmission System Operators (TSOs). Moreover, the interactions between these new market platforms and existing markets are of particular interest, and the contributions from aggregator platforms are also relevant to enhance the political vision of empowering the customers through their active participation in markets. Full article
(This article belongs to the Special Issue Innovation, Policy, and Regulation in Electricity Markets)
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Review
Assessment of Demand Side Flexibility in European Electricity Markets: A Country Level Review
Energies 2021, 14(8), 2324; https://doi.org/10.3390/en14082324 - 20 Apr 2021
Cited by 9 | Viewed by 1490
Abstract
Power systems in many countries have recently undergone a significant transition towards renewable and carbon-free generation sources. Those sources pose new challenges to the grid operation due to their intermittency and uncertainty. Consequently, advanced policy strategies and technologies offering new flexibility solutions on [...] Read more.
Power systems in many countries have recently undergone a significant transition towards renewable and carbon-free generation sources. Those sources pose new challenges to the grid operation due to their intermittency and uncertainty. Consequently, advanced policy strategies and technologies offering new flexibility solutions on the inelastic demand side are required to maintain the reliability of power systems. Given the diversity of situations, legislation and needs across European countries and the varying nature of distribution system operators, this article reviews the deployment of demand side flexibility at national level to identify best practices and main barriers. The analysis concerns European countries of different progress in solutions that leverage flexibility towards offering electricity grid services. The scope is to explore the operation principles of European electricity markets, to assess the participation of emerging flexible resources, and to propose new approaches that facilitate the integration of flexible assets in the distribution grid. The countries reviewed are the United Kingdom, Belgium, Italy and Greece. These countries were selected owing to their diversity in terms of generation mix and market design. Barriers for market access of flexibility resources are also identified in order to form relevant country-specific recommendations. Full article
(This article belongs to the Special Issue Innovation, Policy, and Regulation in Electricity Markets)
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