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Framework for Deterministic Assessment of Risk-Averse Participation in Local Flexibility Markets †

Author

Listed:
  • Carlo Schmitt

    (Institute for High Voltage Equipment and Grids, Digitalization and Energy Economics (IAEW), RWTH Aachen University, 52062 Aachen, Germany
    Current address: Institute for High Voltage Equipment and Grids, Digitalization and Energy Economics (IAEW), RWTH Aachen University, Schinkelstrasse 6, 52062 Aachen, Germany.)

  • Felix Gaumnitz

    (Institute for High Voltage Equipment and Grids, Digitalization and Energy Economics (IAEW), RWTH Aachen University, 52062 Aachen, Germany)

  • Andreas Blank

    (Institute for High Voltage Equipment and Grids, Digitalization and Energy Economics (IAEW), RWTH Aachen University, 52062 Aachen, Germany)

  • Olivier Rebenaque

    (LEDa, University Paris-Dauphine, University PSL, CGEMP, CNRS, 75016 Paris, France)

  • Théo Dronne

    (LEDa, University Paris-Dauphine, University PSL, CGEMP, CNRS, 75016 Paris, France)

  • Arnault Martin

    (EPEX SPOT SE, 75002 Paris, France)

  • Philippe Vassilopoulos

    (EPEX SPOT SE, 75002 Paris, France)

  • Albert Moser

    (Institute for High Voltage Equipment and Grids, Digitalization and Energy Economics (IAEW), RWTH Aachen University, 52062 Aachen, Germany)

  • Fabien Roques

    (LEDa, University Paris-Dauphine, University PSL, CGEMP, CNRS, 75016 Paris, France)

Abstract

Local flexibility markets (LFMs) are a market-based concept to integrate distributed energy resources into congestion management. However, the activation of flexibility for storage-based flexibility changes the respective state of charge. Compensation in later points of time is needed to regain the original flexibility potential. Therefore, we propose a LFM bid formulation including both flexibility and compensation. Furthermore, flexibility market participation might lead to inc-dec-gaming, i.e., congestion-increasing behavior to maximize profits. However, this inc-dec-gaming might lead to electricity market schedule deviations if LFM offers are not activated. We propose a risk-averse modeling formulation considering the potential non-activation of LFM bids to provide a framework for the assessment of LFM participation comparing different approaches. Our exemplary case studies demonstrate the proposed LFM bid formulation and show the impact of LFM participation modeling on inc-dec-gaming and congestion management costs.

Suggested Citation

  • Carlo Schmitt & Felix Gaumnitz & Andreas Blank & Olivier Rebenaque & Théo Dronne & Arnault Martin & Philippe Vassilopoulos & Albert Moser & Fabien Roques, 2021. "Framework for Deterministic Assessment of Risk-Averse Participation in Local Flexibility Markets †," Energies, MDPI, vol. 14(11), pages 1-34, May.
    • Handle: RePEc:gam:jeners:v:14:y:2021:i:11:p:3012-:d:560275
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    References listed on IDEAS

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    1. Rebenaque, Olivier & Schmitt, Carlo & Schumann, Klemens & Dronne, Théo & Roques, Fabien, 2023. "Success of local flexibility market implementation: A review of current projects," Utilities Policy, Elsevier, vol. 80(C).
    2. Erik Heilmann & Nikolai Klempp & Kai Hufendiek & Heike Wetzel, 2022. "Long-term Contracts for Network-supportive Flexibility in Local Flexibility Markets," MAGKS Papers on Economics 202224, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
    3. Schmitt, Carlo & Schumann, Klemens & Kollenda, Katharina & Blank, Andreas & Rebenaque, Olivier & Dronne, Théo & Martin, Arnault & Vassilopoulos, Philippe & Roques, Fabien & Moser, Albert, 2022. "How will local energy markets influence the pan-European day-ahead market and transmission systems? A case study for local markets in France and Germany," Applied Energy, Elsevier, vol. 325(C).

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