Analytical market model for systems with renewables and storage
Challenge and objective
Investments in renewables have been driven, in part, by incentive schemes and policies.
Rapid reduction in costs for renewables and storage.
How does these technologies influence prices and investments in competitive markets?
Work performed
Investigate how renewable energy and electric energy storage impacts the formation of prices and optimal investments in energy-only markets.
Develop an analytical approach to derive the system-optimal conditions for installed capacity of all generators and storage devices.
Significant results
All energy technologies recover their costs and maximize their profits in the system optimum, for an ideal short-term electricity market based on marginal cost and scarcity pricing subsidy schemes.
Storage triggers more investments in renewables, replaces fossil energy and reduces CO2-emissions.
Analytic results for how renewables and storage impact the short-term price formation under equilibrium conditions.
Impact for distribution system innovation
Foundation for local market designs.
Understanding competition in systems with storage and flexibility.
Inputs to optimal design of microgrids in a competitive setting.
Example of price segments derived from the analytical model. Optimal investment in variable renewable energy (VRE) causes zero price hours, pushing thermal out of the market. Competitive electric energy storage (EES) creates new price segments based on the value of stored energy and triggers more VRE in the system.
