Electricity Aggregators: Solution Analysis and Recommendations for Their Integration in Electricity Markets

2019
VPP Enerģētika projekts INGRIDO

This deliverable is the first set of policy recommendations resulting from the INGRIDO project. It assesses the regulatory requirements imposed by EU directives and regulations on the subjects of demand response (DR) and its aggregation. The report outlines current drawbacks and insufficiencies in Latvian energy legislation and offers a series of possible solutions for their alleviation. The document has three main chapters followed by conclusions. The first chapter summarizes the problem under study and defines the key terms. It outlines and assesses the requirements imposed by Directive 2012/27/EU (which Latvia had not yet fully transposed by 2019) and the Clean Energy Package (CEP), particularly Directive 2019/944/EU. The second chapter is devoted to the principal issues of aggregator regulation, especially in light of the independent aggregator (IA) role mandated by CEP, such as the relations between IAs and suppliers (supplier imbalance and financial compensation issues), relations to end-users, delivered demand response (DR) volume verification, and technical/ administrative topics. The third chapter deals with potential regulatory frameworks for enabling aggregator access to various electricity markets – balancing, day-ahead, intraday etc., as well as the risks inherent in the solutions. It contains both qualitative assessment of various IA-supplier settlement schemes and quantitative modelling-based analysis of the impact of IA activities on other parties as well as on the market clearing price. Some of the included modelling results have also been published in scientific publications, such as the considerations of financial risks caused by the rebound effect and the modelled impact on the day-ahead price. Additionally, the chapter briefly explores the experiences of IA implementation in other EU member states. Finally, the conclusions outline the pros and cons related to establishing an IA-supplier compensation mechanism and its potential impacts on both aggregator business model feasibility and supplier additional costs/ foregone revenue, which can be expected to be indirectly passed-down to end-users. While not implementing a compensation would foster IA development, its absence might prove to be a major burden on suppliers, especially on small and emerging suppliers, who can be most affected by asymmetric IA penetration in their portfolios. On the other hand, as concerns particularly the day-ahead market, the conventional approach of tying the compensation price to the day-ahead market price risks practically disqualifying IAs from participation, which is against the principle of fostering DR development. To this end, policymakers need to weigh the consequences of either action (compensating or not) in light of the considerations provided. Either way, for efficient market operation and DR development, it is preferable for IA regulation to be harmonized across the region.

Keywords
pieprasījuma reakcija, agregatori, elektroenerģijas tirgus

Elektroenerģijas agregatori: risinājumu analīze un priekšlikumi to integrācijai pakalpojumu tirgū: Valsts pētījumu programma “Enerģētika”, projekts “INGRIDO” VPP-EM-INFRA-2018/1-0006: 1. starpziņojums. Rīga: Rīgas Tehniskās universitāte, 2019. 44 p.

Publication language
Latvian (lv)