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Implementing flexible demand: Real-time price vs. market integration

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  • Kühnlenz, Florian
  • Nardelli, Pedro H.J.
  • Karhinen, Santtu
  • Svento, Rauli

Abstract

This paper proposes an agent-based model that combines both spot and balancing electricity markets. From this model, we develop a multi-agent simulation to study the integration of the consumers' flexibility into the system. Our study identifies the conditions that real-time prices may lead to higher electricity costs, which in turn contradicts the usual claim that such a pricing scheme reduces cost.

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  • Kühnlenz, Florian & Nardelli, Pedro H.J. & Karhinen, Santtu & Svento, Rauli, 2018. "Implementing flexible demand: Real-time price vs. market integration," Energy, Elsevier, vol. 149(C), pages 550-565.
    • Handle: RePEc:eee:energy:v:149:y:2018:i:c:p:550-565
    DOI: 10.1016/j.energy.2018.02.024
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    6. O'Connell, Sarah & Reynders, Glenn & Keane, Marcus M., 2021. "Impact of source variability on flexibility for demand response," Energy, Elsevier, vol. 237(C).
    7. Bernardo A. Furtado & Miguel A. Fuentes & Claudio J. Tessone, 2019. "Policy Modeling and Applications: State-of-the-Art and Perspectives," Complexity, Hindawi, vol. 2019, pages 1-11, February.
    8. Wanapinit, Natapon & Thomsen, Jessica & Kost, Christoph & Weidlich, Anke, 2021. "An MILP model for evaluating the optimal operation and flexibility potential of end-users," Applied Energy, Elsevier, vol. 282(PB).
    9. Alipour, Manijeh & Zare, Kazem & Seyedi, Heresh & Jalali, Mehdi, 2019. "Real-time price-based demand response model for combined heat and power systems," Energy, Elsevier, vol. 168(C), pages 1119-1127.
    10. Milis, Kevin & Peremans, Herbert & Van Passel, Steven, 2018. "Steering the adoption of battery storage through electricity tariff design," Renewable and Sustainable Energy Reviews, Elsevier, vol. 98(C), pages 125-139.
    11. Heydarian-Forushani, Ehsan & Golshan, Mohamad Esmail Hamedani & Shafie-khah, Miadreza & Catalão, João P.S., 2020. "A comprehensive linear model for demand response optimization problem," Energy, Elsevier, vol. 209(C).
    12. Sousa, Joana & Soares, Isabel, 2020. "Demand response, market design and risk: A literature review," Utilities Policy, Elsevier, vol. 66(C).
    13. Arega Getaneh Abate & Rosana Riccardi & Carlos Ruiz, 2021. "Dynamic tariffs-based demand response in retail electricity market under uncertainty," Papers 2105.03405, arXiv.org, revised Feb 2024.

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