Agostini M., Bertolini M., Coppo M., Fontini F. (2021)

The Participation of Small-Scale Variable Distributed Renewable Energy Sources to the Balancing Services Market. Energy Economics, Volume 97, May 2021, 105208

 

Abstract:

The paper considers different market settings for the participation to the balancing services market of small scale variable renewable energy sources connected to the distribution grid. By mixing an economical and a technical approach, it evaluates the efficiency of participation to the market under two distinct approaches to resources’ aggregation: a commercial scheme and a technical one. In the former, the supply of the small scale variable distributed renewable energy sources is grouped on a purely commercial basis; in the latter, the distribution system operator is responsible of the imbalances that may possibly arise in the distribution grid and aggregates the sources from a technical perspective. 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. As a general outcome of this research, it is shown that providing balancing energy based on a commercial approach is preferable as long as renewables’ curtailment penalty is low and local generators have correlated forecast errors (as in the case of photovoltaic units) with a large reserve capacity. High penalties for curtailment and lower correlation among generation schedule deviations, along with a lower reserve by distributed units, make the technical approach more convenient.