Ass. Prof. Yashar Ghiassi-Farrokhfal
Lecturer Ass. Prof. Yashar Ghiassi-Farrokhfal
(Erasmus University, Rotterdam)
Title Supply Predictability of Renewable Electricity Providers:
Limits on Storage
Date Friday, 07/06/2019, 11.30
Location S3|20 Rundeturmstr. 10, Darmstadt
Room 111
Renewable energy producers (REPs) are quickly becoming major players in wholesale electricity markets. Bidding in these markets requires quantity and price commitments as much as 36 hours in the future. REPs are very different from traditional power plants for two reasons: (1) uncertainty of predictions about future energy production, and (2) negligible marginal costs. Thus, understanding the market behavior of REPs is essential for both REPs and market operators. The uncertainty of REPs might motivate them to shade their bids in either direction, thus hiding their true `estimate' of future production and complicating supply-demand matching for market operators. In this work, we use analytical and simulation approaches to study the behavior of REPs in multiple market settings, and show how market prices, curtailment, and having energy storage systems (ESS) could transform their revenue and behavior.   Accordingly, we develop recommendations on how to align REP's market behavior with market needs, using pricing, curtailment, storage, or a combination of them. We characterize three market pricing zones (which determine REP's market behavior) and we find that curtailment and storage are not always helpful in all pricing zones. In the price zone for which storage and curtailment are highly beneficial, we find that increasing the storage capacity B improves truthfulness with  Theta(1/B log(B)) and profit at a slower rate Theta(1/ log (B)). Our analytical and simulation results suggest that maximum allowable ESS sizes must be regulated not to incentivize deviation from truthfulness; we formulate such ESS sizing in a simpler setting to gain insights on proper regulations.
Yashar Ghiassi-Farrokhfal received the Ph.D. degree in electrical and computer engineering from the University of Toronto in 2011. He is currently an Assistant Professor with the Department of Technology and Operations Management, School of Management, Erasmus University. He was a Postdoctoral Fellow with the University of Waterloo.