On the efficiency of decentralized decision-making in self-dispatch power systems

Authors

Marie Petitet, Marie Perrot, Sébastien Mathieu, Damien Ernst, Yannick Phulpin

Abstract

This paper focuses on market design options for operational balancing management in self-dispatch electric power systems. In particular, it investigates the most relevant timing for the balancing gate closure, when competitors can no longer modify their decisions on the setting of controllable assets and when this responsibility is simultaneously transferred to the system operator. This discussion is central in the development and implementation of the European Electricity Balancing Guideline. Based on a multi-level simulation tool with a realistic modelling of short-term power system operations including informational asymmetry between market participants and the system operator, this paper proposes the first quantitative assessment of reducing the balancing gate closure time from one hour to 15 minutes ahead of the imbalance settlement period. For different environments (energy mix, power plant capabilities, outages, etc…), the results highlight that postponing the balancing gate closure time from one hour to 15 minutes increases the operational cost of the system. Based on robust and scalable results, we show that this difference is mainly due to a better coordination of the available resources by the central decision maker.