Market Design with Wind: Managing low-predictability in intraday markets

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Show simple item record HENRIOT, Arthur 2012-11-28T16:02:01Z 2012-11-28T16:02:01Z 2012
dc.identifier.issn 1028-3625
dc.description.abstract This paper evaluates the benefits for wind power producers to trade in the intraday electricity markets in a context of massive penetration of intermittent renewables. Using a simple analytical model we find out that there are situations when it will be costly for those producers to adjust their positions in intraday markets. A first key factor is of course the technical flexibility of the power system: if highly flexible units provide energy at very low prices in real-time there is no point in participating into intraday markets. Besides, we identify the way wind production forecast errors evolve constitutes another essential, although less obvious, key-factor. Both the value of the standard error and the correlation between forecasts errors at different gate closures will determine the strategy of the wind power producers. Policy implications of our results are the following: low liquidity in intraday markets will be unavoidable for given sets of technical parameters, it will also be inefficient in some cases to set discrete auctions in intraday markets, and compelling players to adjust their position in intraday markets will then generate additional costs. en
dc.format.mimetype application/pdf
dc.language.iso en en
dc.relation.ispartofseries EUI RSCAS en
dc.relation.ispartofseries 2012/63 en
dc.relation.ispartofseries Loyola de Palacio Programme on Energy Policy en
dc.rights info:eu-repo/semantics/openAccess
dc.subject Market design en
dc.subject intraday markets en
dc.subject wind forecasts en
dc.subject large-scale renewables en
dc.subject intermittency en
dc.title Market Design with Wind: Managing low-predictability in intraday markets en
dc.type Working Paper en
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