Impact of offshore wind power forecast error in a carbon constraint electricity market

This paper investigates the impacts of offshore wind power forecast error on the operation and management of a pool-based electricity market in 2050. The impact from offshore wind power forecast errors of up to 2000 MW on system generation costs, emission costs, dispatch-down of wind, number of start-ups and system marginal price are analysed. The main findings of this research are an increase in system marginal prices of approximately 1% for every percentage point rise in the offshore wind power forecast error regardless of the average forecast error sign. If offshore wind power generates less than forecasted (−13%) generation costs and system marginal prices increases by 10%. However, if offshore wind power generates more than forecasted (4%) the generation costs decrease yet the system marginal prices increase by 3%. The dispatch down of large quantities of wind power highlights the need for flexible interconnector capacity. From a system operator's perspective it is more beneficial when scheduling wind ahead of the trading period to forecast less wind than will be generated.

Momentum Trading in New York Stock Exchange (NYSE) Energy Stocks

This paper investigates whether the momentum effect exists in the NYSE energy sector. Momentum is defined as the strategy that buys (sells) these stocks that are best (worst) performers, over a pre-specified past period of time (the 'look-back' period), by constructing equally weighted portfolios. Different momentum strategies are obtained by changing the number of stocks included in these portfolios, as well as the look-back period. Next, their performance is compared against two benchmarks: the equally weighted portfolio consisting of most stocks in the NYSE energy index and the market portfolio, and the S&P500 index. The results indicate that the momentum effect is strongly present in the energy sector, and leads to highly profitable portfolios, improving the risk-reward measures and easily outperforming both benchmarks.

Building Information Modelling Energy Performance Assessment on Domestic Dwellings: A Comparative Study

Building Information Modelling (BIM) is growing in pace, not only in design and construction stages, but also in the analysis of facilities throughout their life cycle. With this continued growth and utilisation of BIM processes, comes the possibility to adopt such procedures, to accurately measure the energy efficiency of buildings, to accurately estimate their energy usage. To this end, the aim of this research is to investigate if the introduction of BIM Energy Performance Assessment in the form of software analysis, provides accurate results, when compared with actual energy consumption recorded. Through selective sampling, three domestic case studies are scrutinised, with baseline figures taken from existing energy providers, the results scrutinised and compared with calculations provided from two separate BIM energy analysis software packages. Of the numerous software packages available, criterion sampling is used to select two of the most prominent platforms available on the market today. The two packages selected for scrutiny are Integrated Environmental Solutions - Virtual Environment (IES-VE) and Green Building Studio (GBS). The results indicate that IES-VE estimated the energy use in region of ±8% in two out of three case studies while GBS estimated usage approximately ±5%. The findings indicate that the introduction of BIM energy performance assessment, using proprietary software analysis, is a viable alternative to manual calculations of building energy use, mainly due to the accuracy and speed of assessing, even the most complex models. Given the surge in accurate and detailed BIM models and the importance placed on the continued monitoring and control of buildings energy use within today’s environmentally conscious society, this provides an alternative means by which to accurately assess a buildings energy usage, in a quick and cost effective manner.

Promoting Community Renewable Energy in a Corporate Energy World

Small-scale, decentralized and community-owned renewable energy is widely acknowledged to be a desirable feature of low carbon futures, but faces a range of challenges in the context of conventional, centralized energy systems. This paper draws on transition frameworks to investigate why the UK has been an inhospitable context for community-owned renewables and assesses whether anything fundamental is changing in this regard. We give particular attention to whether political devolution, the creation of elected governments for Scotland, Wales and Northern Ireland, has affected the trajectory of community renewables. Our analysis notes that devolution has increased political attention to community renewables, including new policy targets and support schemes. However, these initiatives are arguably less important than the persistence of key features of socio-technical regimes: market support systems for renewable energy and land-use planning arrangements that systemically favour major projects and large corporations, and keep community renewables to the margins. There is scope for rolling out hybrid pathways to community renewables, via joint ownership or through community benefit funds, but this still positions community energy as an adjunct to energy pathways dominated by large, corporate generation facilities

A well-to-wheel analysis of electric vehicles in the all-island Single Electricity Market

The European Union has set a target for 10% renewable energy in transport by 2020 to be met using biofuels and electric vehicles. In the case of biofuels, the biofuel must achieve greenhouse gas savings of 35% relative to the fossil fuel replaced. For biofuels, greenhouse gas savings can be calculated using life cycle analysis or the European Union default values. In contrast, all electricity used in transport is considered to be the same, regardless of the source or the type of electric vehicle. However, the choice of the electric vehicle and electricity source will have a major impact on the greenhouse gas saving. In this paper the initial findings of a well-to-wheel analysis of electric vehicle deployment in Northern Ireland are presented. The key finding indicates that electric vehicles require least amount of energy per mile on a well-to-wheel basis, consume the fewest resources, even accommodating inefficient fuel production, in comparison to standard internal combustion engine and hybrid vehicles.

What do high penetrations of wind power mean for gas generation?

Dependency on thermal generation and continued wind power growth in Europe due to renewable energy and greenhouse gas emissions targets has resulted in an interesting set of challenges for power systems. The variability of wind power impacts dispatch and balancing by grid operators, power plant operations by generating companies and market wholesale costs. This paper quantifies the effects of high wind power penetration on power systems with a dependency on gas generation using a realistic unit commitment and economic dispatch model. The test system is analyzed under two scenarios, with and without wind, over one year. The key finding of this preliminary study is that despite increased ramping requirements in the wind scenario, the unit cost of electricity due to sub-optimal operation of gas generators does not show substantial deviation from the no wind scenario.

The significance of interconnector counter-trading in a security constrained electricity market

Throughout the European Union there is an increasing amount of wind generation being dispatched-down due to the binding of power system operating constraints from high levels of wind generation. This paper examines the impact a system non-synchronous penetration limit has on the dispatch-down of wind and quantifies the significance of interconnector counter-trading to the priority dispatching of wind power. A fully coupled economic dispatch and security constrained unit commitment model of the Single Electricity Market of the Republic of Ireland and Northern Ireland and the British Electricity Trading and Transmission Arrangement was used in this study. The key finding was interconnector counter-trading reduces the impact the system non-synchronous penetration limit has on the dispatch-down of wind. The capability to counter-trade on the interconnectors and an increase in system non-synchronous penetration limit from 50% to 55% reduces the dispatch-down of wind by 311 GW h and decreases total electricity payments to the consumer by €1.72/MW h. In terms of the European Union electricity market integration, the results show the importance of developing individual electricity markets that allow system operators to counter-trade on interconnectors to ensure the priority dispatch of the increasing levels of wind generation.

Assessing the Potential for Saving Energy by Impersonating Idle Networked Devices

The idea of proxying network connectivity has been proposed as an efficient mechanism to maintain network presence on behalf of idle devices, so that they can “sleep”. The concept has been around for many years; alternative architectural solutions have been proposed to implement it, which lead to different considerations about capability, effectiveness and energy efficiency. However, there is neither a clear understanding of the potential for energy saving nor a detailed performance comparison among the different proxy architectures. In this paper, we estimate the potential energy saving achievable by different architectural solutions for proxying network connectivity. Our work considers the trade-off between the saving achievable by putting idle devices to sleep and the additional power consumption to run the proxy. Our analysis encompasses a broad range of alternatives, taking into consideration both implementations already available in the market and prototypes built for research purposes. We remark that the main value of our work is the estimation under realistic conditions, taking into consideration power measurements, usage profiles and proxying capabilities.

Essays on energy derivatives pricing and financial risk management

This thesis consists of an introductory chapter (essay I) and five more empirical essays on electricity markets and CO2 spot price behaviour, derivatives pricing analysis and hedging. Essay I presents the structure of the thesis and electricity markets functioning and characteristics, as well as the type of products traded, to be analyzed on the following essays. In the second essay we conduct an empirical study on co-movements in electricity markets resorting to wavelet analysis, discussing long-term dynamics and markets integration. Essay three is about hedging performance and multiscale relationships in the German electricity spot and futures markets, also using wavelet analysis. We concentrate the investigation on the relationship between coherence evolution and hedge ratio analysis, on a time-frequency-scale approach, between spot and futures which conditions the effectiveness of the hedging strategy. Essays four, five and six are interrelated between them and with the other two previous essays given the nature of the commodity analyzed, CO2 emission allowances, traded in electricity markets. Relationships between electricity prices, primary energy fuel prices and carbon dioxide permits are analyzed on essay four. The efficiency of the European market for allowances is examined taking into account markets heterogeneity. Essay five analyzes stylized statistical properties of the recent traded asset CO2 emission allowances, for spot and futures returns, examining also the relation linking convenience yield and risk premium, for the German European Energy Exchange (EEX) between October 2005 and October 2009. The study was conducted through empirical estimations of CO2 allowances risk premium, convenience yield, and their relation. Future prices from an ex-post perspective are examined to show evidence for significant negative risk premium, or else a positive forward premium. Finally, essay six analyzes emission allowances futures hedging effectiveness, providing evidence for utility gains increases with investor’s preference over risk. Deregulation of electricity markets has led to higher uncertainty in electricity prices and by presenting these essays we try to shed new lights about structuring, pricing and hedging in this type of markets.

Road traffic information platform for energy and emissions savings

Apesar das recentes inovações tecnológicas, o setor dos transportes continua a exercer impactes significativos sobre a economia e o ambiente. Com efeito, o sucesso na redução das emissões neste setor tem sido inferior ao desejável. Isto deve-se a diferentes fatores como a dispersão urbana e a existência de diversos obstáculos à penetração no mercado de tecnologias mais limpas. Consequentemente, a estratégia “Europa 2020” evidencia a necessidade de melhorar a eficiência no uso das atuais infraestruturas rodoviárias. Neste contexto, surge como principal objetivo deste trabalho, a melhoria da compreensão de como uma escolha de rota adequada pode contribuir para a redução de emissões sob diferentes circunstâncias espaciais e temporais. Simultaneamente, pretende-se avaliar diferentes estratégias de gestão de tráfego, nomeadamente o seu potencial ao nível do desempenho e da eficiência energética e ambiental. A integração de métodos empíricos e analíticos para avaliação do impacto de diferentes estratégias de otimização de tráfego nas emissões de CO2 e de poluentes locais constitui uma das principais contribuições deste trabalho. Esta tese divide-se em duas componentes principais. A primeira, predominantemente empírica, baseou-se na utilização de veículos equipados com um dispositivo GPS data logger para recolha de dados de dinâmica de circulação necessários ao cálculo de emissões. Foram percorridos aproximadamente 13200 km em várias rotas com escalas e características distintas: área urbana (Aveiro), área metropolitana (Hampton Roads, VA) e um corredor interurbano (Porto-Aveiro). A segunda parte, predominantemente analítica, baseou-se na aplicação de uma plataforma integrada de simulação de tráfego e emissões. Com base nesta plataforma, foram desenvolvidas funções de desempenho associadas a vários segmentos das redes estudadas, que por sua vez foram aplicadas em modelos de alocação de tráfego. Os resultados de ambas as perspetivas demonstraram que o consumo de combustível e emissões podem ser significativamente minimizados através de escolhas apropriadas de rota e sistemas avançados de gestão de tráfego. Empiricamente demonstrou-se que a seleção de uma rota adequada pode contribuir para uma redução significativa de emissões. Foram identificadas reduções potenciais de emissões de CO2 até 25% e de poluentes locais até 60%. Através da aplicação de modelos de tráfego demonstrou-se que é possível reduzir significativamente os custos ambientais relacionados com o tráfego (até 30%), através da alteração da distribuição dos fluxos ao longo de um corredor com quatro rotas alternativas. Contudo, apesar dos resultados positivos relativamente ao potencial para a redução de emissões com base em seleções de rotas adequadas, foram identificadas algumas situações de compromisso e/ou condicionantes que devem ser consideradas em futuros sistemas de eco navegação. Entre essas condicionantes importa salientar que: i) a minimização de diferentes poluentes pode implicar diferentes estratégias de navegação, ii) a minimização da emissão de poluentes, frequentemente envolve a escolha de rotas urbanas (em áreas densamente povoadas), iii) para níveis mais elevados de penetração de dispositivos de eco-navegação, os impactos ambientais em todo o sistema podem ser maiores do que se os condutores fossem orientados por dispositivos tradicionais focados na minimização do tempo de viagem. Com este trabalho demonstrou-se que as estratégias de gestão de tráfego com o intuito da minimização das emissões de CO2 são compatíveis com a minimização do tempo de viagem. Por outro lado, a minimização de poluentes locais pode levar a um aumento considerável do tempo de viagem. No entanto, dada a tendência de redução nos fatores de emissão dos poluentes locais, é expectável que estes objetivos contraditórios tendam a ser minimizados a médio prazo. Afigura-se um elevado potencial de aplicação da metodologia desenvolvida, seja através da utilização de dispositivos móveis, sistemas de comunicação entre infraestruturas e veículos e outros sistemas avançados de gestão de tráfego.

Enabling solar electricity with electric vehicles in future energy systems

Tese de doutoramento, Sistemas Sustentáveis de Energia, Universidade de Lisboa, Faculdade de Ciências, 2015

Impact of energy-using product policies

Energy-using products (EuPs), such as domestic appliances, audio-visual and ICT equipment contribute significantly to CO2 emissions, both in the domestic and non-domestic sectors. Policies that encourage the use of more energy efficient products can therefore generate significant reductions in overall energy consumption and hence, CO2 emissions. To the extent that these policies cause an increase the average production cost of EuPs, they may impose economic costs on producers, or on consumers, or on both. In this theoretical paper, an adaptation of a simple vertical product differentiation model – in which products are characterised in terms of their quality and their energy consumption – is used to analyse the impact of the different EuP polices on product innovation and to assess the resultant economic impacts on producers and consumers. It is shown that whereas the imposition of a binding product standard for energy efficiency unambiguously reduces aggregate profit and increases the average market price in the absence of any learning effects, the introduction or strengthening of demand-side measures (such as energy labelling) may reduce, or increase, aggregate profit. Even in the case where the overall impact is unambiguously negative, the effects of product innovation and learning can be in either direction.

Product innovation and the costs of energy-using product policies

Energy-using Products (EuPs) contribute significantly to the United Kingdom’s CO2 emissions, both in the domestic and non-domestic sectors. Policies that encourage the use of more energy efficient products (such as minimum performance standards, energy labelling, enhanced capital allowances, etc.) can therefore generate significant reductions in overall energy consumption and hence, CO2 emissions. While these policies can impose costs on the producers and consumers of these products in the short run, the process of product innovation may reduce the magnitude of these costs over time. If this is the case, then it is important that the impacts of innovation are taken into account in policy impact assessments. Previous studies have found considerable evidence of experience curve effects for EuP categories (e.g. refrigerators, televisions, etc.), with learning rates of around 20% for both average unit costs and average prices; similar to those found for energy supply technologies. Moreover, the decline in production costs has been accompanied by a significant improvement in the energy efficiency of EuPs. Building on these findings and the results of an empirical analysis of UK sales data for a range of product categories, this paper sets out an analytic framework for assessing the impact of EuP policy interventions on consumers and producers which takes explicit account of the product innovation process. The impact of the product innovation process can be seen in the continuous evolution of the energy class profiles of EuP categories over time; with higher energy classes (e.g. A, A+, etc.) entering the market and increasing their market share, while lower classes (e.g. E, F, etc.) lose share and then leave the market. Furthermore, the average prices of individual energy classes have declined over their respective lives, while new classes have typically entered the market at successively lower “launch prices”. Based on two underlying assumptions regarding the shapes of the “lifecycle profiles” for the relative sales and the relative average mark-ups of individual energy classes, a simple simulation model is developed that can replicate the observed market dynamics in terms of the evolution of market shares and average prices. The model is used to assess the effect of two alternative EuP policy interventions – a minimum energy performance standard and an energy-labelling scheme – on the average unit cost trajectory and the average price trajectory of a typical EuP category, and hence the financial impacts on producers and consumers.

Balancing market integration in MASCEM electricity market simulator

With the restructuring of the energy sector in industrialized countries there is an increased complexity in market players’ interactions along with emerging problems and new issues to be addressed. Decision support tools that facilitate the study and understanding of these markets are extremely useful to provide players with competitive advantage. In this context arises MASCEM, a multi-agent simulator for competitive electricity markets. It is essential to reinforce MASCEM with the ability to recreate electricity markets reality in the fullest possible extent, making it able to simulate as many types of markets models and players as possible. This paper presents the development of the Balancing Market in MASCEM. A key module to the study of competitive electricity markets, as it has well defined and distinct characteristics previously implemented.