The impact of short-term pricing on flexible generation investments in electricity markets

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dc.contributor.authorVillalobos, Cristian
dc.contributor.authorNegrete-Pincetic, Matias
dc.contributor.authorFigueroa, Nicolas
dc.contributor.authorLorca, Alvaro
dc.contributor.authorOlivares, Daniel
dc.date.accessioned2025-01-20T22:18:55Z
dc.date.available2025-01-20T22:18:55Z
dc.date.issued2021
dc.description.abstractThe massive growth in the integration of variable renewable energy sources is producing several challenges in the operation of power systems and its associated markets. In this context, flexibility has become a critical attribute to allow the system to react to changes in generation or demand levels. Thus, it is critical for market signals at both short and long term scales to include flexibility features, to align agents' incentives with systemic flexibility requirements. In this paper, different pricing schemes for short-term markets are studied, based on various relaxations of the unit commitment problem, including convex-hull approximations, with the aim of representing operational flexibility requirements in a more explicit way. Extensive simulations illustrate the performance of the proposed schemes, as compared to conventional ones, in terms of the capability of the system to properly incentivize flexibility attributes, resulting in better agents' cost recovery and more variable renewable energy utilization. The results show that short-term pricing schemes considered improve the long-term signals for flexible investments but additional changes to market design are still required. Thus, there is a need to revisit historical practices for pricing rules by incorporating additional flexibility-related attributes into them. Several alternatives are discussed and policy recommendations based on these considerations are provided.
dc.description.abstract(c) 2021 Elsevier B.V. All rights reserved.
dc.fuente.origenWOS
dc.identifier.doi10.1016/j.eneco.2021.105213
dc.identifier.eissn1873-6181
dc.identifier.issn0140-9883
dc.identifier.urihttps://doi.org/10.1016/j.eneco.2021.105213
dc.identifier.urihttps://repositorio.uc.cl/handle/11534/94582
dc.identifier.wosidWOS:000659334500023
dc.language.isoen
dc.revistaEnergy economics
dc.rightsacceso restringido
dc.subjectElectricity markets
dc.subjectPricing schemes
dc.subjectMarket incentives
dc.subjectFlexibility
dc.subjectRenewable energy
dc.subject.ods07 Affordable and Clean Energy
dc.subject.odspa07 Energía asequible y no contaminante
dc.titleThe impact of short-term pricing on flexible generation investments in electricity markets
dc.typeartículo
dc.volumen98
sipa.indexWOS
sipa.trazabilidadWOS;2025-01-12
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