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Evaluating the impacts of priority dispatch in the European electricity market

Author

Listed:
  • Oggioni, G.
  • Murphy, F.H.
  • Smeers, Y.

Abstract

This paper compares the impact of the Nodal Pricing and European Market Coupling organizations on different economic agents of the power system under two main wind policies. Under the “priority dispatch” policy, Transmission System Operators (TSOs) must accommodate all wind energy produced, which thus has the priority over energy produced by conventional plants; in the “no priority dispatch” policy, TSOs can decide not to inject all potential wind power in the grid in order to limit congestion problems. The effects of these two wind policies are measured by developing simple stochastic programming models that consider cases with different wind penetration levels, existing capacities and endogenous investments, as well as assumptions on the EU-ETS.

Suggested Citation

  • Oggioni, G. & Murphy, F.H. & Smeers, Y., 2014. "Evaluating the impacts of priority dispatch in the European electricity market," Energy Economics, Elsevier, vol. 42(C), pages 183-200.
    • Handle: RePEc:eee:eneeco:v:42:y:2014:i:c:p:183-200
    DOI: 10.1016/j.eneco.2013.12.009
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    Cited by:

    1. Wang, Qi & Zhang, Chunyu & Ding, Yi & Xydis, George & Wang, Jianhui & Østergaard, Jacob, 2015. "Review of real-time electricity markets for integrating Distributed Energy Resources and Demand Response," Applied Energy, Elsevier, vol. 138(C), pages 695-706.
    2. Savelli, Iacopo & Hardy, Jeffrey & Hepburn, Cameron & Morstyn, Thomas, 2022. "Putting wind and solar in their place: Internalising congestion and other system-wide costs with enhanced contracts for difference in Great Britain," Energy Economics, Elsevier, vol. 113(C).
    3. Majid Al-Gwaiz & Xiuli Chao & Owen Q. Wu, 2017. "Understanding How Generation Flexibility and Renewable Energy Affect Power Market Competition," Manufacturing & Service Operations Management, INFORMS, vol. 19(1), pages 114-131, February.
    4. Ahmed, Tofael & Mekhilef, Saad & Shah, Rakibuzzaman & Mithulananthan, N. & Seyedmahmoudian, Mehdi & Horan, Ben, 2017. "ASEAN power grid: A secure transmission infrastructure for clean and sustainable energy for South-East Asia," Renewable and Sustainable Energy Reviews, Elsevier, vol. 67(C), pages 1420-1435.
    5. Daraeepour, Ali & Patino-Echeverri, Dalia & Conejo, Antonio J., 2019. "Economic and environmental implications of different approaches to hedge against wind production uncertainty in two-settlement electricity markets: A PJM case study," Energy Economics, Elsevier, vol. 80(C), pages 336-354.
    6. Chen, H. & Chyong CK. & Kang, J-N. & Wei Y-M., 2018. "Economic dispatch in the electricity sector in China: potential benefits and challenges ahead," Cambridge Working Papers in Economics 1836, Faculty of Economics, University of Cambridge.
    7. Triolo, Ryan C. & Wolak, Frank A., 2022. "Quantifying the benefits of a nodal market design in the Texas electricity market," Energy Economics, Elsevier, vol. 112(C).
    8. de Menezes, Lilian M. & Houllier, Melanie A., 2015. "Germany's nuclear power plant closures and the integration of electricity markets in Europe," Energy Policy, Elsevier, vol. 85(C), pages 357-368.
    9. Simshauser, Paul, 2021. "Renewable Energy Zones in Australia's National Electricity Market," Energy Economics, Elsevier, vol. 101(C).
    10. Maria Kannavou & Marilena Zampara & Pantelis Capros, 2019. "Modelling the EU Internal Electricity Market: The PRIMES-IEM Model," Energies, MDPI, vol. 12(15), pages 1-28, July.
    11. Morales, Juan M. & Pineda, Salvador, 2017. "On the inefficiency of the merit order in forward electricity markets with uncertain supply," European Journal of Operational Research, Elsevier, vol. 261(2), pages 789-799.
    12. Elisabetta Allevi & Adriana Gnudi & Igor V. Konnov & Giorgia Oggioni, 2017. "Dynamic Spatial Auction Market Models with General Cost Mappings," Networks and Spatial Economics, Springer, vol. 17(2), pages 367-403, June.
    13. Paul Simshauser & Farhad Billimoria & Craig Rogers, 2021. "Optimising VRE plant capacity in Renewable Energy Zones," Working Papers EPRG2121, Energy Policy Research Group, Cambridge Judge Business School, University of Cambridge.
    14. Rangarajan, Arvind & Foley, Sean & Trück, Stefan, 2023. "Assessing the impact of battery storage on Australian electricity markets," Energy Economics, Elsevier, vol. 120(C).
    15. Hélène Le Cadre & Anthony Papavasiliou & Yves Smeers, 2015. "Wind Farm Portfolio Optimization under Network Capacity Constraints," Post-Print hal-01007992, HAL.
    16. Simshauser, Paul & Billimoria, Farhad & Rogers, Craig, 2022. "Optimising VRE capacity in Renewable Energy Zones," Energy Economics, Elsevier, vol. 113(C).
    17. Wei, Yi-Ming & Chen, Hao & Chyong, Chi Kong & Kang, Jia-Ning & Liao, Hua & Tang, Bao-Jun, 2018. "Economic dispatch savings in the coal-fired power sector: An empirical study of China," Energy Economics, Elsevier, vol. 74(C), pages 330-342.

    More about this item

    Keywords

    Wind policy; Priority dispatch; Nodal Pricing; Market Coupling; European Electricity Market;
    All these keywords.

    JEL classification:

    • D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models
    • Q20 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - General
    • Q40 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - General

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