Start Date
10-12-2017 12:00 AM
Description
Renewable energy producers (REPs) as future electricity market participants might not bid truthfully in the market, hedging against their unpredictability. It is essential for electricity market owners to have truthful bidders, because compensation is costly and polluting. We study whether or not adding a battery can help truthfulness and if yes what are the characterizations of such a market that advocate that. We gain several novel insights in this direction. For example, we found that batteries help truthful ask strategies only under certain market pricing schemes. Moreover, the market owner must set a limit on the allowable battery size of each market participant, according to his unpredictability level. Without following these settings, REPs might misuse batteries by manipulating the market. We finally suggest as alternatives that either the battery ownership must be shifted to the market owners, or market owners must help REPs have better predictions of their own production.
Recommended Citation
Ghiassi, Yashar; Ketter, Wolfgang; and Collins, John, "Designing a Battery-Friendly Electricity Market" (2017). ICIS 2017 Proceedings. 9.
https://aisel.aisnet.org/icis2017/IT-and-Social/Presentations/9
Designing a Battery-Friendly Electricity Market
Renewable energy producers (REPs) as future electricity market participants might not bid truthfully in the market, hedging against their unpredictability. It is essential for electricity market owners to have truthful bidders, because compensation is costly and polluting. We study whether or not adding a battery can help truthfulness and if yes what are the characterizations of such a market that advocate that. We gain several novel insights in this direction. For example, we found that batteries help truthful ask strategies only under certain market pricing schemes. Moreover, the market owner must set a limit on the allowable battery size of each market participant, according to his unpredictability level. Without following these settings, REPs might misuse batteries by manipulating the market. We finally suggest as alternatives that either the battery ownership must be shifted to the market owners, or market owners must help REPs have better predictions of their own production.