Addressing the technical and market challenges to high wind power integration in Ireland

Over the last decade there has been a rapid global increase in wind power stimulated by energy and climate policies. However, as wind power is inherently variable and stochastic over a range of time scales, additional system balancing is required to ensure system reliability and stability. This paper reviews the technical, policy and market challenges to achieving ambitious wind power penetration targets in Ireland’s All-Island Grid and examines a number of measures proposed to address these challenges. Current government policy in Ireland is to address these challenges with additional grid reinforcement, interconnection and open-cycle gas plant. More recently smart grid combined with demand side management and electric vehicles have also been presented as options to mitigate the variability of wind power. In addition, the transmission system operators have developed wind farm specific grid codes requiring improved turbine controls and wind power forecasting techniques.

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.

Data mining contributions to characterize MV consumers and to improve the suppliers-consumers settlements

This paper deals with the establishment of a characterization methodology of electric power profiles of medium voltage (MV) consumers. The characterization is supported on the data base knowledge discovery process (KDD). Data Mining techniques are used with the purpose of obtaining typical load profiles of MV customers and specific knowledge of their customers’ consumption habits. In order to form the different customers’ classes and to find a set of representative consumption patterns, a hierarchical clustering algorithm and a clustering ensemble combination approach (WEACS) are used. Taking into account the typical consumption profile of the class to which the customers belong, new tariff options were defined and new energy coefficients prices were proposed. Finally, and with the results obtained, the consequences that these will have in the interaction between customer and electric power suppliers are analyzed.

MASCEM improvement for agent based coalitions

This paper presents MASCEM - Multi-Agent Simulator for Electricity Markets improvement towards an enlarged model for Seller Agents coalitions. The simulator has been improved, both regarding its user interface and internal structure. The OOA, used as development platform, version was updated and the multi-agent model was adjusted for implementing and testing several negotiations regarding Seller agents’ coalitions. Seller coalitions are a very important subject regarding the increased relevance of Distributed Generation under liberalised electricity markets.

MASGriP – a Multi-Agent Smart Grid Simulation Platform

The increasing number of players that operate in power systems leads to a more complex management. In this paper a new multi-agent platform is proposed, which simulates the real operation of power system players. MASGriP – A Multi-Agent Smart Grid Simulation Platform is presented. Several consumer and producer agents are implemented and simulated, considering real characteristics and different goals and actuation strategies. Aggregator entities, such as Virtual Power Players and Curtailment Service Providers are also included. The integration of MASGriP agents in MASCEM (Multi-Agent System for Competitive Electricity Markets) simulator allows the simulation of technical and economical activities of several players. An energy resources management architecture used in microgrids is also explained.

Study of distribution network demand response events in the Portuguese system

In competitive electricity markets with deep concerns for the efficiency level, demand response programs gain considerable significance. As demand response levels have decreased after the introduction of competition in the power industry, new approaches are required to take full advantage of demand response opportunities. Grid operators and utilities are taking new initiatives, recognizing the value of demand response for grid reliability and for the enhancement of organized spot markets’ efficiency. This paper proposes a methodology for the selection of the consumers that participate in an event, which is the responsibility of the Portuguese transmission network operator. The proposed method is intended to be applied in the interruptibility service implemented in Portugal, in convergence with Spain, in the context of the Iberian electricity market. This method is based on the calculation of locational marginal prices (LMP) which are used to support the decision concerning the consumers to be schedule for participation. The proposed method has been computationally implemented and its application is illustrated in this paper using a 937 bus distribution network with more than 20,000 consumers.

A multi-agent based approach for intelligent smart grid management

The spread and globalization of distributed generation (DG) in recent years has should highly influence the changes that occur in Electricity Markets (EMs). DG has brought a large number of new players to take action in the EMs, therefore increasing the complexity of these markets. Simulation based on multi-agent systems appears as a good way of analyzing players’ behavior and interactions, especially in a coalition perspective, and the effects these players have on the markets. MASCEM – Multi-Agent System for Competitive Electricity Markets was created to permit the study of the market operation with several different players and market mechanisms. MASGriP – Multi-Agent Smart Grid Platform is being developed to facilitate the simulation of micro grid (MG) and smart grid (SG) concepts with multiple different scenarios. This paper presents an intelligent management method for MG and SG. The simulation of different methods of control provides an advantage in comparing different possible approaches to respond to market events. Players utilize electric vehicles’ batteries and participate in Demand Response (DR) contracts, taking advantage on the best opportunities brought by the use of all resources, to improve their actions in response to MG and/or SG requests.

Remuneration and tariffs in the context of virtual power players

Power systems have been through deep changes in recent years, namely with the operation of competitive electricity markets in the scope and the increasingly intensive use of renewable energy sources and distributed generation. This requires new business models able to cope with the new opportunities that have emerged. Virtual Power Players (VPPs) are a new player type which allows aggregating a diversity of players (Distributed Generation (DG), Storage Agents (SA), Electrical Vehicles, (V2G) and consumers), to facilitate their participation in the electricity markets and to provide a set of new services promoting generation and consumption efficiency, while improving players` benefits. A major task of VPPs is the remuneration of generation and services (maintenance, market operation costs and energy reserves), as well as charging energy consumption. This paper proposes a model to implement fair and strategic remuneration and tariff methodologies, able to allow efficient VPP operation and VPP goals accomplishment in the scope of electricity markets.

Energy and reserve provision dispatch considering distributed generation and demand response

In competitive electricity markets with deep concerns at the efficiency level, demand response programs gain considerable significance. In the same way, distributed generation has gained increasing importance in the operation and planning of power systems. Grid operators and utilities are taking new initiatives, recognizing the value of demand response and of distributed generation for grid reliability and for the enhancement of organized spot market´s efficiency. Grid operators and utilities become able to act in both energy and reserve components of electricity markets. This paper proposes a methodology for a joint dispatch of demand response and distributed generation to provide energy and reserve by a virtual power player that operates a distribution network. The proposed method has been computationally implemented and its application is illustrated in this paper using a 32 bus distribution network with 32 medium voltage consumers.

Intelligent electric vehicle heuristic for energy resource management using simulated annealing

The smart grid concept appears as a suitable solution to guarantee the power system operation in the new electricity paradigm with electricity markets and integration of large amounts of Distributed Energy Resources (DERs). Virtual Power Player (VPP) will have a significant importance in the management of a smart grid. In the context of this new paradigm, Electric Vehicles (EVs) rise as a good available resource to be used as a DER by a VPP. This paper presents the application of the Simulated Annealing (SA) technique to solve the Energy Resource Management (ERM) of a VPP. It is also presented a new heuristic approach to intelligently handle the charge and discharge of the EVs. This heuristic process is incorporated in the SA technique, in order to improve the results of the ERM. The case study shows the results of the ERM for a 33-bus distribution network with three different EVs penetration levels, i. e., with 1000, 2000 and 3000 EVs. The results of the proposed adaptation of the SA technique are compared with a previous SA version and a deterministic technique.

Virtual power producers market strategies

This paper presents MASCEM - a multi-agent based electricity market simulator. MASCEM uses game theory, machine learning techniques, scenario analysis and optimisation techniques to model market agents and to provide them with decision-support. This paper mainly focus on the MASCEM ability to provide the means to model and simulate Virtual Power Producers (VPP). VPPs are represented as a coalition of agents, with specific characteristics and goals. The paper detail some of the most important aspects considered in VPP formation and in the aggregation of new producers and includes a case study.

Distributed generation producers' reserve management

Sustainable development concerns are being addressed with increasing attention, in general, and in the scope of power industry, in particular. The use of distributed generation (DG), mainly based on renewable sources, has been seen as an interesting approach to this problem. However, the increasing of DG in power systems raises some complex technical and economic issues. This paper presents ViProd, a simulation tool that allows modeling and simulating DG operation and participation in electricity markets. This paper mainly focuses on the operation of Virtual Power Producers (VPP) which are producers’ aggregations, being these producers mainly of DG type. The paper presents several reserve management strategies implemented in the scope of ViProd and the results of a case study, based on real data.

Energy and ancillary services joint market simulation

In order to develop a flexible simulator, a variety of models for Ancillary Services (AS) negotiation has been implemented in MASCEM – a multi-agent system competitive electricity markets simulator. In some of these models, the energy and the AS are addressed simultaneously while in other models they are addressed separately. This paper presents an energy and ancillary services joint market simulation. This paper proposes a deterministic approach for solving the energy and ancillary services joint market. A case study based on the dispatch of Regulation Down, Regulation Up, Spinning Reserve, and Non-Spinning Reserve services is used to demonstrate that the use of the developed methodology is suitable for solving this kind of optimization problem. The presented case study is based on CAISO real AS market data considers fifteen bids.

Transmission costs allocation based on optimal re-dispatch

Congestion management of transmission power systems has achieve high relevance in competitive environments, which require an adequate approach both in technical and economic terms. This paper proposes a new methodology for congestion management and transmission tariff determination in deregulated electricity markets. The congestion management methodology is based on a reformulated optimal power flow, whose main goal is to obtain a feasible solution for the re-dispatch minimizing the changes in the transactions resulting from market operation. The proposed transmission tariffs consider the physical impact caused by each market agents in the transmission network. The final tariff considers existing system costs and also costs due to the initial congestion situation and losses. This paper includes a case study for the 118 bus IEEE test case.

A data-mining-based methodology for transmission expansion planning

In recent decades, all over the world, competition in the electric power sector has deeply changed the way this sector’s agents play their roles. In most countries, electric process deregulation was conducted in stages, beginning with the clients of higher voltage levels and with larger electricity consumption, and later extended to all electrical consumers. The sector liberalization and the operation of competitive electricity markets were expected to lower prices and improve quality of service, leading to greater consumer satisfaction. Transmission and distribution remain noncompetitive business areas, due to the large infrastructure investments required. However, the industry has yet to clearly establish the best business model for transmission in a competitive environment. After generation, the electricity needs to be delivered to the electrical system nodes where demand requires it, taking into consideration transmission constraints and electrical losses. If the amount of power flowing through a certain line is close to or surpasses the safety limits, then cheap but distant generation might have to be replaced by more expensive closer generation to reduce the exceeded power flows. In a congested area, the optimal price of electricity rises to the marginal cost of the local generation or to the level needed to ration demand to the amount of available electricity. Even without congestion, some power will be lost in the transmission system through heat dissipation, so prices reflect that it is more expensive to supply electricity at the far end of a heavily loaded line than close to an electric power generation. Locational marginal pricing (LMP), resulting from bidding competition, represents electrical and economical values at nodes or in areas that may provide economical indicator signals to the market agents. This article proposes a data-mining-based methodology that helps characterize zonal prices in real power transmission networks. To test our methodology, we used an LMP database from the California Independent System Operator for 2009 to identify economical zones. (CAISO is a nonprofit public benefit corporation charged with operating the majority of California’s high-voltage wholesale power grid.) To group the buses into typical classes that represent a set of buses with the approximate LMP value, we used two-step and k-means clustering algorithms. By analyzing the various LMP components, our goal was to extract knowledge to support the ISO in investment and network-expansion planning.