Search Results (195)

With the large-scale power batteries approaching their retirement phase, efforts are being made to advance the recycling and cascade utilization of power batteries for electric vehicles (EVs). This paper constructs a closed-loop supply chain (CLSC) of power batteries led by the battery manufacturer (BM) and composed of the electric vehicle manufacturer (EVM) and third-party recycler (TPR). The study investigates the optimal pricing strategies of this CLSC with the consideration of recycling competition under the government’s reward–penalty mechanism. This paper establishes five recycling modes, namely independent recycling and cooperative recycling, under dual-channel recycling, and further discusses the effects of the government reward–penalty mechanism and recycling competition on the recycling rate, profits, and recycling pricing of the CLSC in each recycling mode. The following conclusions are found: (1) An increase in the reward–penalty intensity will increase the recycling rate, sales price of EVs, wholesale price, transfer price, recycling price, and the profit of each recycler in the CLSC. (2) An increase in the recycling competition will result in the reduction of the profit of each enterprise, and will also lead to the reduction of the recycling rate. (3) Cooperation between enterprises can inhibit the recycling volume of other enterprises to a certain extent. The cooperation between the EVM and BM can increase the recycling volume and the sales volume of EVs. (4) The leadership of the BM in the supply chain is embodied in the recycling and profit. For other members of the supply chain, it is very important to strive for cooperation with the leaders in the supply chain. These research conclusions can provide theoretical support for optimizing the power battery recycling system, formulating relevant policies, and improving the efficiency of resource recycling, thereby promoting the sustainable development of the new energy industry. Full article

The increasing integration of intermittent renewable energy sources necessitates effective energy storage solutions, with battery energy storage systems (BESSs) emerging as promising candidates for energy arbitrage operations. This study conducted a comprehensive comparative analysis of 29 European electricity markets to identify optimal locations for utility-scale BESS-enabled energy arbitrage ventures. Using hourly wholesale electricity price data spanning January 2015 to December 2023, we employed statistical analysis techniques, 3D surface plots, and developed a novel energy arbitrage feasibility (EAF) score-based ranking system that integrates electricity market volatility metrics with regulatory and economic variables including gross domestic product per capita, index of economic freedom, and electricity supply-origin risk (ESOR). Five investor preference scenarios were analyzed: risk-averse, ESOR-sensitive, economy-sensitive, volatility-sensitive, and equally weighted approaches. Results demonstrated that Estonia ranked highest in three scenarios, achieving the maximum absolute EAF score of 0.558197 in the volatility-sensitive scenario, while Luxembourg led in the ESOR and economy-sensitive scenarios. Estonia’s market characteristics support single daily charge–discharge cycles, whereas Luxembourg enables dual cycles, offering different operational strategies. The EAF scoring methodology provides a standardized framework for cross-country investment decision-making in energy arbitrage ventures. These findings indicate that market selection significantly impacts the BESS arbitrage profitability, with Estonia and Luxembourg representing the most favorable investment destinations. Full article

Our regression analysis documents that energy policies to promote renewable energy development, as well as hydroelectric imports from Canada, lead to short-run reductions in average electricity prices (also known as merit-order effects) throughout the Northeast United States. Changes in the reliance upon renewable energy in one of the Northeast’s three interconnected electricity markets will impact wholesale prices in the other two. The retirement of a 1000 MW nuclear plant can increase prices by about 9% in the Independent System Operator of New England market and 7% in the New York Independent System Operator market in the short run at reference hubs, while also raising prices in neighboring markets. Some proposed large-scale off-shore wind farms would not only lower prices in local markets at the reference hubs modeled but would also lower prices in neighboring markets. Full article

This paper examines arbitrage opportunities available in one of the largest wholesale electricity markets in the world, the Midcontinent Independent System Operator (MISO) electricity exchange. While prior research suggests that market efficiency on the exchange has increased over time, this study reveals that historical pricing information can still be used to generate positive returns. I find that a trading rule based on prior spot and forward prices generates statistically and economically significant risk-adjusted returns across the entire MISO footprint. These returns may in part be explained by the relatively small number of financial traders in the market and the ability of generation owners to exercise market power. Full article

The Greek islands have been blessed with excellent wind potential, with hundreds of sites featuring annual average wind velocity higher than 8–10 m/s. Due to specific regulations in the legal framework, some GWs of wind parks have been submitted since the late 2000s by a small number of large investors in the Greek islands, favoring the creation of energy monopolies and imposing serious impacts on natural ecosystems and existing human activities. These projects have caused serious public reactions against renewables, considerably decelerating the energy transition. This article aims to summarize the legal points in the Greek framework that caused this distorted approach and present the imposed potential social and environmental impacts. Energy monopolies distort the electricity wholesale market and lead to energy poverty and a low standard of living by imposing higher electricity procurement prices on the final users. The occupation of entire insular geographical territories by large wind park projects causes important deterioration of the natural environment, which, in turn, leads to loss of local occupations, urbanization, and migration by affecting negatively the countryside life. Serious concerns from the local population are clearly revealed through an accomplished statistical survey as well as a clear intention to be engaged in future wind park projects initiated by local stakeholders. The article is integrated with specific proposed measures and actions toward the rational development of renewable energy projects. These refer mainly on the formulation of a truly supportive and just legal framework aiming at remedying the currently formulated situation and the strengthening of the energy communities’ role, such as through licensing priorities, funding mechanisms, and tools, as well as additional initiatives such as capacity-building activities, pilot projects, and extensive activation of local citizens. Energy communities and local stakeholders should be involved in the overall process, from the planning to the construction and operation phase. Full article

The purpose of this research is to investigate the possibilities of electricity consumption-associated cost reduction in buildings owned by a medium-sized logistics company in Latvia (A_LV), which is a part of the larger international business ecosystem (A). The company is not using all of its facilities for its own business needs, some of them are rented out, and therefore the possibility of impacting electricity consumption in rented out buildings is limited. During the research, mixed-type approaches combining qualitative and quantitative research methods and data analysis were employed, where the quantitative methods helped to analyze the company’s electricity consumption and cost changes in different time periods, while the qualitative methods were used in a literature review. As primary data sources, A_LV’s internal electricity consumption reports and invoices for electricity payments were used, along with publicly available data on electricity consumption in Latvia and wholesale market price fluctuations. Although A_LV has numerous areas of electricity consumption optimization, this research is limited to few of them—lighting system optimization, energy management and automation applications, forklift charging regime adjustments, and choice of electricity retailer and tariff plan. Full article

Accurate electricity wholesale price (EWP) forecasting is crucial for advancing sustainability in the energy sector, as it supports more efficient utilization and integration of renewable energy by informing when and how it should be consumed, dispatched, curtailed, or stored. However, high fluctuations in EWP, often resulting from demand–supply imbalances typically caused by sudden surges in electricity usage and the intermittency of renewable energy generation, and unforeseen external events, pose a challenge for accurate forecasting. Incorporating local temporal information (LTI) in time series, such as hourly price changes, is essential for accurate EWP forecasting, as it helps detect rapid market shifts. However, existing methods remain limited in capturing LTI, either relying on point-wise input sequences or, for fixed-length, non-overlapping segmentation methods, failing to effectively model dependencies within and across segments. This paper proposes the Local-Temporal Convolutional Transformer (LT-Conformer) model for day-ahead EWP forecasting, which addresses the challenge of capturing fine-grained LTI using Local-Temporal 1D Convolution and incorporates two attention modules to capture global temporal dependencies (e.g., daily price trends) and cross-feature dependencies (e.g., solar output influencing price). An initial evaluation in the Australian market demonstrates that LT-Conformer outperforms existing state-of-the-art methods and exhibits adaptability in forecasting EWP under volatile market conditions. Full article

This paper investigates the long-term impact of integrating emerging Small Modular Reactors (SMR) in modern power systems. A chronological simulation of the Greek day-ahead market and real-time balancing market with fine time granularity is conducted for a future 20-year period (2032–2051) under four SMR penetration scenarios using a specialized integrated market simulation software. Simulation results indicate that SMR units can be regarded as a promising electricity generation solution in the forthcoming energy transition landscape. The introduction of up to 3 GW of SMR capacity is projected to significantly decrease reliance on gas imports by up to 62%, reduce carbon emissions by up to 52%, and lower overall electricity costs for end-consumers by up to 21% as compared to a baseline scenario without SMRs. It is anticipated that SMR units are expected to leverage their operating advantages and generally achieve positive financial results when participating directly in the wholesale market. However, their economic viability is highly dependent on their initial capital expenditure and other operating cost components, which at present are highly uncertain. Full article

The huge penetration of renewable energy sources poses several challenges for the function of electricity markets, such as increased price volatility and massive curtailments. This paper investigates the current structure of the wholesale electricity market in Greece under the Target Model guidelines. Our analysis put under scrutiny the formation and function of both spot and balancing markets by highlighting key challenges and reforms. Empirical evidence reveals that the domestic market is currently in accordance with the European Target Model; however, the anticipated benefits in terms of more competitive prices are not evident yet. The oversupply of electricity accompanied by low demand that is apparent in the Greek market points to the rapid participation of storage units in the system. The paper provides a detailed description of the recent support mechanism to facilitate the integration of BESS into the system. Eventually, this is anticipated to reduce price volatility and smoothen the price curves. Full article

The development of renewable energy in the power industry plays a crucial role in mitigating environmental degradation. The renewable energy (RE) consumption system and green certificate trading market are significant in promoting renewable energy adoption, while energy storage technology has advanced substantially to address power supply instability. Against this backdrop, this study employs a Stackelberg game approach to construct a power supply chain model, with generation companies as leaders and retail companies as followers, examining energy storage cost-sharing mechanisms and retailers’ renewable energy investment decisions. Key findings include the following: (1) a higher RE consumption ratio reduces wholesale prices, power stability, electricity demand, and retailers’ renewable investment; (2) when the energy storage cost coefficient exceeds a threshold, higher green certificate prices increase retailers’ renewable investment; (3) beyond the threshold, a higher RE consumption ratio incentivizes retailers to invest in renewables; (4) proportional cost sharing enhances renewable investment by approximately 15% and maximizes supply chain profits. The study provides decision-making insights for power companies and policy references for governments. Full article

Governments are focusing on citizen participation in the energy transition, e.g., with dynamic electricity tariffs, which pass part of the wholesale price volatility to end users. While often the cheapest alternative, these tariffs require micromanagement for optimization. In this research, an automated system capable of supplying electricity for home use at minimal cost called Smart Relays and Controller (SRC) is presented. SRC scrapes prices online, charges a battery system during the cheapest time slots and supplies electricity to the home energy system from the cheapest source, either the battery or the grid, while optimizing battery life. To validate the system, a comparison is made between SRC, a programmable scheduler and PVPC (Spain’s dynamic tariff) using twenty-eight months of hourly historical data. SRC is shown to be superior to both the scheduler and PVPC, with the scheduler performing worse than SRC but better than PVPC (T.T., p < 0.001). SRC achieves a 36.16% discount over PVPC, 13.89% when factoring in battery life. The savings are 44.24% higher with SRC than with a scheduler. Neither inflation nor incentives to reduce costs are considered. While we studied Spain’s tariff, SRC would work in any country offering dynamic electricity tariffs, with benefit margins dependent on their particularities. Full article

The untapped potential of wave energy offers another alternative to diversifying renewable energy sources and addressing climate change by reducing CO₂ emissions. However, development costs to mature the technology remain significant hurdles to adoption at scale and the technology often must compete against other marine energy renewables such as offshore wind. Here, we conduct a real option valuation that includes the uncertain market price of wholesale electricity and managerial flexibility expressed in determining future optimal decisions. We demonstrate the probability that the project’s embedded compound real option value can turn a negative net present value wave energy project to a positive expected value. This change in investment decision uses decision tree analysis, where real options are developed as decision nodes, and models the uncertainty as a risk-neutral stochastic process using chance nodes. We also show how our results are analogous to a financial out-of-the-money call option. Our results highlight the distribution of outcomes and the benefit of a staged long-term investment in wave energy systems to better understand and manage project risk, recognizing that these probabilistic results are subject to the ongoing evolution of wholesale electricity prices and the stochastic process models used here to capture their future dynamics. Lastly, we show that the near-term optimal decision is to continue to fund ongoing development of a reference architecture to a higher technology readiness level to maintain the long-term option to deploy such a renewable energy system through private investment or private–public partnerships. Full article

This study examines the integration and price behavior of European Union electricity markets using a Vector Error Correction Model (VECM). Employing daily wholesale day-ahead electricity prices from 24 EU countries spanning October 2017 to September 2024, the research identifies seven regional clusters of markets based on similarities in price trends. The analysis reveals strong long-term equilibrium relationships and dynamic short-term adjustments, highlighting the interconnectedness of these markets. Central players, such as Germany in Block 1 and France in Block 2, emerge as pivotal in driving regional stability, while markets like Romania and Bulgaria (Block 3) demonstrate significant interconnections. Scandinavian and Baltic regions (Blocks 4 and 5) showcase unique balancing mechanisms influenced by shared infrastructure. Aggregated inter-block dynamics underscore the critical role of central hubs like Blocks 1 and 3 in bridging market disparities. Despite progress, regional heterogeneity persists, with slower adjustments observed in certain clusters. The findings emphasize the need for targeted policies to enhance cross-border electricity trading and infrastructure investments, ensuring equitable integration across all regions. By addressing these disparities, the EU can bolster market efficiency and resilience, contributing to its overarching energy strategy and transition to sustainable energy systems. Full article

This paper examines the transformative effects of decarbonization on electricity market design, emphasizing the challenges and opportunities posed by the rapid integration of renewable energy sources such as wind and solar. It analyzes the evolution of key wholesale market segments—including day-ahead, real-time, capacity, long-term purchase agreements, ancillary services, and transmission markets—highlighting their critical roles in managing the variability of renewable energy generation through efficient price signals and resource coordination. Variable renewable energy integration introduces significant operational challenges, including overgeneration risks, ramping capacity demands, forecast inaccuracies, and transmission constraints. Addressing these issues requires enhanced market flexibility, dynamic pricing mechanisms, and advanced real-time balancing strategies. This paper assesses these challenges, offering strategies to align generation with demand and optimize market outcomes. As electricity systems evolve, legacy market structures must adapt to incorporate carbon-free resources while maintaining grid reliability and economic sustainability. By exploring case studies such as Chile and California, this paper demonstrates the importance of targeted innovations in market design, regulatory frameworks, and operational technologies. It advocates for a holistic approach to ensure a reliable, affordable, and equitable transition to a decarbonized energy future. Full article

Motivated by the projected solar and wind capacity additions around the world, we model the energy procurement decision of a load serving entity (LSE) faced with alternatives of solar power purchase agreements (PPAs), wind PPAs, non-renewable energy forward contracts, and spot energy purchases in a wholesale electricity market with uncertain prices. Using a pseudo-data sample of over one million observations, we estimate a translog cost function to find that the LSE’s own-price elasticity estimates range from −1.87 for nighttime spot MWh demands to −13.1 for forward MWh demands. MWh demands are influenced by solar and wind capacity factors, daytime and nighttime retail sales, and spot energy price forecasts. The LSE’s optimal procurement of solar capacity is roughly twice the wind capacity, corroborating the ratios of projected solar and wind capacity additions in regions around the world. If the LSE’s existing energy mix is nearly all renewable, it becomes carbon-free when solar and wind power purchase agreements have declining energy prices or when forward energy price and spot energy price forecasts increase over time. These results imply that piecemeal policy measures can have conflicting outcomes, calling for integrated resource planning under wholesale market competition and price uncertainty. Full article