The Participation of Small-Scale Variable Distributed Renewable Energy Sources to the Balancing Services Market. Marco Fanno Working Paper 263/2020.
The paper considers different market settings for the participation to the balancing services market of small scale variable renewable energy sources connected at the distribution level to the grid. By mixing an economical and a technical approach, it evaluates the efficiency of participation to the market under two opposite settings: a commercial scheme and a technical one. In the former, the supply of the small scale variable distributed renewable energy sources are grouped on a purely commercial basis; in the latter, the DSO is responsible of the imbalances that may possibly arise in the distribution grid. By considering a reference distribution network and designing scenarios for the forecast uncertainty about supply and demand of power profiles, the impact of different market frameworks is assessed. The upward and downward balancing services provided by variable distributed energy resources and controllable units connected to the high voltage grid are both considered. Moreover, the power supply curtailments, that endogenously arise due to the violation of technical constraints of the distribution grid and the random nature of energy supply by renewables, are addressed, for each specific market model. It is shown that the social costs of balancing energy provision can be higher or lower according to the market framework and the specific scenario, depending on the relative share of the different types of distributed renewable energy sources as well as on the amount of reserved energy for balancing services and their cost.