Impact of quarter hourly imbalance settlement period on the Nordic physical electricity market

Thumbnail Image

Files

master_Solovian_Andrej_2019.pdf (1.55 MB)

URL

Journal Title

Journal ISSN

Volume Title

Sähkötekniikan korkeakoulu | Master's thesis
Unless otherwise stated, all rights belong to the author. You may download, display and print this publication for Your own personal use. Commercial use is prohibited.

Authors

Date

2019-08-19

Department

Major/Subject

Sustainable Energy Systems and Markets

Mcode

ELEC3048

Degree programme

Master's Programme in Advanced Energy Solutions

Language

en

Pages

53

Series

Abstract

Increasingly interconnected Nordic synchronous area coupled with increasing amount of intermittent generations poses a challenge to power system balancing. This thesis examines a set of regulatory measures which are to be implied for Nordic electricity markets to ease the balancing of the grid and possibly make it increasingly market based. The regulatory changes identified in the thesis are introduction of intraday cross-zonal capacity pricing methodology, introduction of one balance model, tightening of imbalance settlement pricing, introduction to rolling gate closure with relation to market time unit and most importantly introduction of 15-minute imbalance settlement period. As 15-minute imbalance settlement period is considered the most fundamental change, the purpose of thesis is to assess the impact of it to Nordic electricity market. In order to quantitatively assess the impact of quarter hourly imbalance settlement period to Nordic electricity markets a German quarter hourly intraday auction was studied. The auction data used in the thesis is from year 2018. The purpose of analysis was to find systematic behaviour from market participants in quarter hourly trading. The method was to compile average prices of quarters over a month and compare them with day-ahead prices. It was found out that intraday auction prices possessed cyclical “zig-zag” pattern which revolved around day-ahead prices. After studying volatility of intraday auction prices, it led to conclusion that market participants were trading error of expected production and already allocated volume in day-ahead market. Based on the observation market participants were actively trying to avoid imbalance settlement by fixing their position in intraday market. The same impact of quarter hourly resolution is expected to the Nordic electricity market, which would push market participants to actively trade in the intra-hourly imbalances. Based on literature review, it was found out that in German markets trading in finer resolution and closer to time of delivery has decreased the need for balancing of the power system. One of the key findings of the thesis was that power market design is strongly linked with balancing need of power system. It was identified that since Nordic electricity market is divided into eleven price areas, the same effect cannot be achieved from 15-minute trading as in German case without involvement of interconnectors. According to thesis ideally interconnector flow would be deter-mined on 15-minute resolution, interconnector ramping would be continuous and HVDC interconnectors could be used for imbalance netting with central European markets. However, more research needs to be conducted on the topic on how inter-connectors would be utilized in most efficient manner with respect to all stakeholders.

Description

Supervisor

Syri, Sanna

Thesis advisor

Suhonen, Timo

Keywords

15-minute imbalance settlement period, bidding behaviour, short term electricity markets, power system balancing

Other note

Citation

Permanent link to this item

https://urn.fi/URN:NBN:fi:aalto-201908254880

Collections

[dipl] Sähkötekniikan korkeakoulu / ELEC