Innovative electricity market designs to support a transition to (near) 100% renewable power system: first results from H2020 TradeRES project

Estanqueiro, Ana; Strbac, G.; Chrysanthopoulos, Nikolaos; Santos, Gabriel; Jo-hanndeiter, S.; Algarvio, Hugo; Syse, Helleik; Wang, Ni; Sanches Jimenez, Ingrid; Qiu, Dawei; Vale, Zita; Nienhaus, Kristina; Kochems, Johannes; Schimeczek, Christoph; Sijim, Jos; De Vries, L.J; Lopes, F.; M. Couto, António; Sperber, Evelyn

doi:10.1049/icp.2023.2748

Published September 26, 2023 | Version v1

Conference paper Open

Innovative electricity market designs to support a transition to (near) 100% renewable power system: first results from H2020 TradeRES project

1. National Laboratory of Energy and Geology, Renewable Energy and Energy Efficiency Unit
2. Professor at Imperial College London
3. Researcher at Imperial College London
4. GECAD, LASI, Polytechnic of Porto
5. EnBW Baden-Württemberg, Department of Energy Economics
6. University of Stavanger
7. TNO
8. Delft University of Technology
9. Delft University of Tecnology
10. Imperial College of London
11. German Aerospace Center
12. DLR Institute of Networked Energy Systems Stuttgart
13. ECN part of TNO
14. Renewable Energies and Energy Efficiency Unit
15. National Laboratory of Energy and Geology

Developing innovative electricity market designs to facilitate a sustainable transition to (near) 100% renewable power systems while meeting societal needs is a crucial and actual topic of research. This article presents preliminary key findings from the H2020 Euro-pean project TradeRES, addressing this critical topic. The project uses agent-based and optimization models to effectively capture the behaviour of different market players, and to analyse the current and future power system energy mixes of selected European case studies with different physical and spatial scales from: i) local energy communities and local energy markets (LEMs); ii) nation-al/regional - the Netherlands, Germany, and Iberia (Portugal and Spain); and iii) pan-European energy markets. The first results on LEMs indicate a substantial economic benefit for participants and enhanced revenue streams for distributed energy resources, able to i) incentivise further decentralised investments; ii) promote the growth of variable renewable energy systems (vRES) and iii) increase flexibility at the local level. The outcomes are sensitive to the tariffs' structure, while the retail sector competitiveness was identified as a critical parameter affecting its efficiency. For the pan-European and national/regional case studies, the first set of simulations had consistent outcomes, namely, by pointing out current design of energy-only markets to be insufficient to incentivize the high levels of vRES foreseen in Europe. Different support schemes (e.g., fixed market premia, contract for differences) were tested and results suggest they may play a relevant role in effectively covering the cost of vRES in a market environment.

Notes

This work has received funding from the EU Horizon 2020

research and innovation program under project TradeRES

(grant agreement No 864276).

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