Independent Aggregation in the Nordic Day-Ahead Market: Potential Impact of Different Supplier Compensation Mechanisms
2021 IAEE International Online Conference: Energy, Covid, and Climate Change 2021
Kārlis Baltputnis, Tim Schittekatte, Zane Broka

The adoption of the Electricity Directive (EU 2019/944) mandated the European Union (EU) Member States (MS) to transpose provisions enabling the participation of Demand Response (DR) via Independent Aggregators (IAs) in all organised electricity markets. IAs have been defined in Art. 2 (19) of the Directive (EU) 2019/944 as «a market participant engaged in aggregation who is not affiliated to the customer’s supplier». Even though the IA’s activities can be expected to bring benefits (in the form of reduced electricity costs), the suppliers whose consumers have contracted with IAs can be confronted with foregone revenues due to the actions of the independent aggregator (Alba et al., 2021). To solve this issue, a compensation payment has been proposed in many EU MSs; however, there are several ways how that can be implemented. For an overview, please consult Reif et al. (2021). In light of this issue, this study quantifies the potential effects of IA participation in the Nordic region under different implementations of the compensation mechanisms for the suppliers. We focus on the impact of the compensation mechanism on the IA’s profitability, the impact on wholesale prices, the total compensation paid to the suppliers, and, finally, the net benefit due to the introduction of IAs. To achieve this, historical supply and demand curve data from the Nordic region is used to simulate the market clearing (limited to the system price) under varying costs and volumes of DR via IAs.


Atslēgas vārdi
aggregation, electricity markets, compensation
Hipersaite
https://www.iaee.org/proceedings/article/17155

Baltputnis, K., Schittekatte, T., Broka, Z. Independent Aggregation in the Nordic Day-Ahead Market: Potential Impact of Different Supplier Compensation Mechanisms. No: 2021 IAEE International Online Conference: Energy, Covid, and Climate Change, Online, 7.-9. jūnijs, 2021. Online: 2021, 1.-2.lpp.

Publikācijas valoda
English (en)
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