Power Market Design
NREL researchers are developing a modeling platform to test various power market designs in terms of flexibility incentives for generation and demand response resources as well as revenue sufficiency.
In many parts of the world, the interconnected power system functions as a large wholesale electricity market (separate and distinct from the retail, or distribution, network). However, these markets do not always value flexibility, a necessary attribute in systems with large amounts of variable renewable energy such as wind and solar power. In addition, the near-zero marginal cost of variable renewable energy can pose challenges to market designs that may result in insufficient revenue from generation needed to maintain resource adequacy.
- Development of power system models using PLEXOS (a commercial electricity production simulation model) and FESTIV (the NREL-developed Flexible Energy Scheduling Tool for Integrating Variable Generation)
- Expertise of an interdisciplinary research team consisting of researchers in power systems and economics
The objective of this project is to develop a modeling platform to test alternative market designs and their impact on flexibility, electricity production cost, renewable curtailment, and system balancing.
Impact of Market Behavior, Fleet Composition, and Ancillary Services on Revenue Sufficiency, NREL Technical Report (2016)
Evolution of Wholesale Electricity Market Design with Increasing Levels of Renewable Generation, NREL Technical Report (2014)
Evolution of the Market: Designing a Market for High Levels of Variable Generation, IEEE Power and Energy Magazine (2015)
Market Designs for the Primary Frequency Response Ancillary Service—Part I: Motivation and Design, IEEE Transactions on Power Systems (2014)
Market Designs for the Primary Frequency Response Ancillary Service - Part II: Case Studies. IEEE Transactions on Power Systems (2014)
View all NREL publications about power market design.