This diploma thesis inquiries into business activities of the electricity market retailer. Thesis starts with an explanation of retailers role and its relations with other market participants in the Czech Republic. In application part there are two solved examples of tasks hidden behind retailers profitable operations.

Flexibility describes the system ability to cope with events that may cause imbalance between electricity supply and demand while maintaining the system reliability in a cost-effective manner. Flexibility has always been present in the power system to cater for unplanned generator outages and demand uncertainty and variability. The arrival of wind generation with its variable and hard to predict nature increases the overall needs for system flexibility. This thesis provides a systematic approach for investigating the role of flexibility in different power system activities including generation scheduling, generation planning and market operation, and furthermore proposes two 'offline' indices for flexibility evaluation. Using the tools and metrics presented in this thesis, it is possible to perform the following tasks: • Conduct generation scheduling simulation to evaluate the impacts of wind on the flexibility requirement of power systems; • Use the unit construction and commitment algorithm to 1) estimate the maximum allowable wind capacity for an existing system; 2) find the optimal investment of new flexible units for accommodating more wind generation; and 3) decide an optimal generation mix for integrating a given wind penetration; • Use the market model to reveal the value and profitability of flexibility and evaluate the corresponding effects of alternative market design; • Use the two proposed flexibility indices to quantitatively assess the flexibility of individual generators and power systems without undertaking complex and time consuming simulations.

The introduction of a liberalised electricity market has brought a new challenge to generating companies as well as system regulators. Under this more competitive environment, generating companies are exposed to various risks that might compromise their investment return. Moreover, the various risks in the market affect each type of generation technology in a different way; hence influence the technology choice. Furthermore, it is not yet clear whether the investment cycles in a liberalised electricity market will take place in an orderly fashion or whether 'boom and bust' cycles may arise. As a consequence various market designs, investment incentives and policies have been implemented by system regulators to try to ensure the security of supply. Investment decisions under a market with incentive mechanism are even more complicated to model because the generating company needs to forecast the revenue that the new investment will make from both the energy market and the mechanism. This thesis develops some models that could be used by system regulators to study the performance of market designs and by generating companies to assess a new investment under a liberalised electricity market. Three main models have been developed to serve these purposes. A generation expansion model has been developed using Agent-based modelling approach. In this model each generating company makes investment decision taking into account their competitors' investment strategies and the interactions between them. Several incentive mechanisms are also modelled to study their impacts on the generating companies' investment decision and the dynamic of the investments. A more comprehensive investment framework for a generating company to evaluate an investment in a new power plant has also been developed. The framework consists of two stages: 1) it first models the expected future investments and retirements from all the companies in the market and 2) then calculates the market prices and revenues of the new investment against the future system expansion obtained in the first stage. Two investment models have been developed using this framework. The first model is a probabilistic valuation model to assess investment considering risks and uncertainties. The second model is developed to evaluate investment in an oligopoly electricity market taking into account various risk characteristics of different technologies. The investment framework for a generating company to evaluate an investment is also extended so that the generating company can evaluate investments in a market with an incentive mechanism.

This bachelor thesis investigates the development of value factors on the Swedish electricity market and how the development can be explained. Value factor is a parameter that indicates how well an energy source’s market price corresponds to the average spot price for the electricity mix. Value factors for nuclear-, thermal-, wind-, solar- and hydropower are calculated for the years 2014-2019. Electricity production- and spot price data has been sourced from Svenska Kraftnät, Nord Pool and Uppsala University. The influence of weather conditions, spot price, production and consumption on the development of the value factors is discussed. The Pearson correlation coefficient is used for analytical purposes, showing the correlation between two specific variables. The conclusion is that the value factor for each power source is the result of the conditions present during the specific time period. The value factors for solar- and thermal power are discontinuous since they are temperature-dependent. For nuclear-, wind- and hydropower, the value factors are more continuous during the time span. This is due to, for instance, their important roles in the Swedish energy system and their ability to match demands.

Wind power generation does, on the one hand, contribute to a less polluting and more sustainable electric power generation mix. On the other hand, the uncertainty and the variability of the power output do challenge the operation of the power system: hourly variations in wind power generation are hardly predictable in a precise way. To decrease the need for balancing power, it might be beneficial from the overall system-perspective to subject power generating companies to stricter balancing incentives/rules. The way the market is designed has become crucial to exploit the existing flexibility in the power system and to increase the efficiency in its operation: inappropriate market designs can counteract all technical achievements. The work conducted for this thesis is embedded in a project on wind power integration and electricity market design following the aim to develop a simulation tool to analyse the consequences of changes in specific market rules. This thesis analyses wind power variations and forecast errors in the Swedish power system and explores the question whether internal ex-ante self-balancing can efficiently reduce the need for balancing power. Applying internal ex-ante self-balancing, every power generating company re-schedules its own power plants in order to balance its commitments towards other market actors with its newest production forecast. This is done shortly before the hour of delivery. To assess the value of this self-balancing, possible trading and scheduling decisions for power generating companies are modelled based on a hydro-thermal generation portfolio within the framework of the Nordic electricity market design. The model is based on a sequence of mixed-integer linear optimisation problems for the clearing of the different sub-markets. Both the data and the model have an hourly time resolution. In a case study, the model is applied on a simplified test-system. The need of real-time balancing by the transmission system operator, the total variable generation cost of the system, as well as the extent to which the power generating companies re-scheduled their production are then used as indicators to evaluate self-balancing. / <p>QC 20121017</p> / Short-term hydro power planning in power systems with large amounts of wind power / Elektra 36141: Korttidsplanering av vatten-värmekraftsystem vid stora mängder vindkraft: System-perspektivet

In deregulated electricity markets, profit driven electricity retailers compete to supply cheap reliable electricity to electricity consumers, and the electricity consumers have free will to switch between the electricity retailers. The need to maximize the profits of the electricity retailers while minimizing the electricity costs of the electricity consumers has therefore seen a drastic increase in the research of electricity markets. One of the factors that affect the profits of the electricity retailers and the energy cost of the consumers in electricity retail markets is the supply and demand. During high-supply and low-demand periods, the excess electricity if not managed, is wasted. During low-supply high-demand periods, the deficit supply can lead to electricity blackouts or costly electricity because of the volatile electricity wholesale spot market prices. Research studies have shown that electricity retailers can achieve significant profits and reduced electricity costs for their electricity consumers by minimizing the excess electricity and deficit electricity. Existing studies developed load forecasting models that aimed to match electricity supply and electricity demand. These models reached excellent accuracy levels, however due to the high volatility character of load demand and the rise of new electricity consumers, load forecasting alone is unable to mitigate excess and deficit electricity. In other studies, researchers proposed charging the electricity consumers’ batteries with excess electricity during high-supply low-demand periods and supplying their deficit electricity during low-supply high-demand periods. Electricity consumers’ incorporating batteries resulted in minimized excess and deficit electricity, in turn, maximizing the profits for the electricity retailers and minimizing the electricity costs for the electricity consumers. However, the batteries are consumer centric and only provide battery energy for the battery-owned consumer. Electricity consumers without battery energy during low-supply highdemand periods have electricity blackouts or require costly electricity from the electricity wholesale spot market. The peer-to-peer (P2P) energy sharing framework which allows electricity consumers to share their energy resources with one another is a viable solution to allow electricity consumers to share their battery energy. P2P energy sharing is a hot topic in research because of its potential to maximize the electricity retailers’ profits and minimize the electricity consumers’ electricity costs. Due to the increased profits for the electricity retailer and reduced electricity costs for the electricity consumers from implementing battery charging and P2P energy sharing, this dissertation proposes a day-ahead electricity retail market structure in which the electricity retailer supplies consumers’ batteries with excess electricity during high-supply low-demand periods, and during low-supply highdemand periods the electricity retailer discharges the consumers’ batteries to supply their deficit supply or supply their peers’ deficit supply. The electricity retailer aims to maximize its profits and minimize the electricity cost of the electricity consumers in its electricity retail market, by minimizing the excess and deficit electricity. The problem is formulated as a non-linear optimization model and solved using game theory. This dissertation compares the profits of the electricity retailer and electricity costs of the consumers that charge their batteries with excess electricity, discharge their batteries and purchase electricity from their peers to supply their deficit supply, with consumers that only charge their batteries with excess electricity but do not share their battery energy with their peers, consumers that only purchase electricity from their peers to supply their deficit supply but do not employ a battery, and consumers that neither employ a battery nor purchase electricity from their peers to supply their deficit supply. The results show that the consumers that charge their batteries with excess electricity, discharge their batteries and purchase electricity from their peers to supply their deficit supply achieved the lowest electricity cost and highest profits for the electricity retailer. / Dissertation (MEng)--University of Pretoria, 2020. / Electrical, Electronic and Computer Engineering / MEng / Unrestricted

Within forecasting electricity pricing, we analyse whether adding various vari- ables improves the predictions, and if shorter time intervals between observa- tions enhance accuracy of the forecasting. Next, we focus on proper selection of lagged observations, which has not been thoroughly covered in the past litera- ture. In addition, many papers studied electricity prices in larger markets (e.g. United States, Australia, Nord Pool, etc.) on datasets limited in scope, with 2-3 years timespan. To address these gaps in literature, we obtain one daily and one hourly dataset, both spanning 6 years (January 1, 2015 - December 31, 2020), from four Central and Eastern European countries - the Czech Repub- lic, the Slovak Republic, Hungary, and Romania. These contain information on the electricity prices, and information on our observed added variables - temperature and cross-border electricity flows. For the forecasting, we use two different methods - Autoregression (AR) and Seemingly Unrelated Regression (SUR). The thorough selection of lagged observations, which we accustom to the closing time of the auction-based electricity market system, serves further studies as a guidance on how to avoid possible errors and inconsistencies in their predictions. In our analyses, both AR and SUR models show that...

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[pt] O mercado de energia do Brasileiro foi decidido com base nas suas características físicas dos anos 90, predominantemente hídrico. Apesar de ainda dominado pela geração hidrelétrica, a participação dessa fonte foi reduzida significativamente, cedendo espaço principalmente para as fontes renováveis intermitentes. Sendo assim, há uma dissonância entre o atual sistema elétrico e aquele que embasou a atual regulação. As hipóteses e aproximações adotadas para a constituição da estrutura regulatória foram baseadas em um sistema com excesso de flexibilidade e alta previsibilidade no curto prazo. A maior participação das renováveis intermitentes, e sua projeção de crescimento nos próximos anos faz com essa estrutura se torne cada vez menos aderente e suas falhas intensificadas. A falta de adaptação pode enfraquecer os sinais econômicos e ameaçar a sustentabilidade e adequabilidade do sistema no longo prazo. A consulta pública CP 33 propôs uma agenda pragmática para auxiliar no processo de modernização do setor, se tornando um dos pilares principais de leis em tramitação no Congresso sobre esse assunto. Apesar do consenso a respeito da necessidade de modernização, principalmente na adoção de um mercado de curto prazo mais competitivo, ainda existem muitas preocupações e questionamentos a respeito dos mecanismos de mercados a serem adotados. A vasta literatura e as experiências internacionais podem auxiliar muito no processo de modernização nacional. Todavia, as particularidades de cada sistema, como matriz de geração e dimensões territoriais, desafiam qualquer tentativa simplista de compatibilizar o caso Brasileiro com experiências relatadas. Dessa maneira, esse trabalho tem como objetivo 1) definir uma nomenclatura e classificar as estruturas de mercado relevantes, 2) delinear um panorama sistematizado das características que influenciaram a escolha de diferentes mecanismos de mercado 3) comparar os mercados internacionais ao mercado Brasileiro utilizando as nomenclaturas e as características físicas definidas em 1) e 2). Mercados da América do Sul e do Norte, Europa e Nova Zelândia foram selecionados para apresentar as análises comparativas. Dessa maneira, nós contribuímos com um panorama atualizado e padronizado de alguns desenhos mercados internacionais e mecanismos relevantes. Além do mais, nós conscientizamos e discutimos lições relevantes aprendidas com a experiência internacional para apoiar e fomentar a agenda de modernização do mercado Brasileiro. / [en] The Brazilian power-market design features were decided based on the system s physical and economic characteristics observed in the 90s, when the system was remarkably hydro-dominated and the economy experienced large GDP growth rates. Nowadays, the power system s capacity is still hydrodominated, albeit with a significantly lower hydro participation (64 percent), has experienced a sharp growth in variable renewable energy integration, and has faced the impacts of different economic crises. Therefore, some of the approximations and assumptions adopted for the regulatory framework based on the original system s condition and economic reality are not valid anymore. Failing to adapt the regulatory framework to the current system and economic realities may provide poor market signals, possibly threatening the long-run system sustainability. Based on the continued flaws experienced in this country, the need for a market-design review is critical and urgent in Brazil. The public consultation named CP 33 proposed a handful agenda for the Brazilian power sector modernization, which is the backbone of some bills already in progress. Despite the consensus on the modernization agenda, especially on a more short-term-based market-oriented approach, there are still many concerns and questions on which market features should be adopted. The vast literature and international experience in the subject notwithstanding, each system s particularities, challenge any simplistic attempt to match the Brazilian case with previously reported experiences. Thus, this work aims to 1) define a general market design nomenclature and classify relevant market structures, 2) draw a systematized panorama of the physical characteristics that have influenced the selection of different market designs and mechanisms in other similar markets, and 3) compare the Brazilian market design, within a common language using 1) and 2), to the international experience. Markets from South and North America, Europe, and New Zealand were selected to present comparisons between them and Brazil. Based on that, we contribute with an updated and standardized panorama of a few relevant market designs and structures. Additionally, we raise awareness and discuss the relevant lessons learned from the international experience applicable to support and foster the Brazilian market modernization agenda.

The following master thesis is conducted on behalf of The Royal Institute of Technology and Manetos AB with the purpose of investigating potential business markets for the new innovation, the Digital Circuit Breaker (DCB). The DCB is a mean for digitalising the distribution board, which is the middleman between households’ electrical appliances and the electrical grid. Through this digitalisation, a two-way communication between households and the grid can emerge, creating possibilities for demand side flexibility and energy management. The technology also provides more transparency for homeowners and real estate owners into households’ and buildings’ energy consumption, through monitoring and disaggregation. The study found that the energy landscape is facing significant challenges for the future. The integration of more intermittent energy, unpredictable energy consumption, new power consuming technologies and an aging grid were examples of challenges which potentially could jeopardize the security of electric supply. Many of these challenges however were also found to be issues which the DCB could potentially solve. It was also found that power-based tariffs spoke in favour of the DCB. Based on the overall empirical results, the study found that there is a need amongst utilities for demand side flexibility solutions and that there is a need amongst homeowners for electricity transparency and monitoring tools. This gives rise to a situation where the possibility to commercialize the DCB exists. By making the DCB a demand flexibility solution for utilities and a transparency and monitoring tool for homeowners, the needs for both utilities and homeowners can be fulfilled. The recommendations towards Manetos were to focus on the business markets electric utilities, more specifically municipally owned grid companies, and homeowners. It was found that the municipally owned grid companies focused more on socioeconomics than profit based grid companies. Furthermore, the municipally owned grid companies that had powerbased tariffs in place today showed great interest in the DCB as a tool for better managing electrical load and avoiding power peaks. For homeowners it was found that the people who owned electric vehicles or had direct electric heating showed great interest in an electricity management tool such as the DCB. The study also found real estate companies to be a business market of interest, however, not enough interviews were conducted in order to draw conclusions for the markets viability. Therefore, further investigation of the real estate company market is recommended. / Följande examensarbete har utförts på uppdrag av Kungliga Tekniska Högskolan och Manetos AB med syftet att undersöka potentiella affärsmarknader för en ny innovation kallad den Digitala Brytaren (DCB – Digital Circuit Breaker). DCBn är ett verktyg för att digitalisera elskåpet, vilket fungerar som en mellanhand mellan hushåll och elnätet. Denna digitalisering möjliggör för tvåvägskommunikation mellan hushåll och elnät, vilket öppnar upp möjligheter för efterfrågeflexibilitet och bättre energihushållning. Teknologin ökar även transparensen gällande byggnaders energikonsumtion, både för hushåll och fastighetsägare, genom övervakning och dissaggregering. Studien fann att energilandskapet står inför betydande utmaningar inför framtiden. Integrationen av mer intermittent energi, oförutsägbar energikonsumtion, nya teknologier och ett åldrande elnät är några exempel på utmaningar vilka kan komma att äventyra leveranssäkerheten i systemet. Många av dessa utmaningar visade sig dock vara problem som DCBn skulle kunna lösa. Studien fann även att effektbaserade tariffer, vilka idag används som ett verktyg för att motverka höga effektuttag, fungerar som incitament för DCBn och för en mer hållbar energikonsumtion generellt. Baserat på de övergripande empiriska resultaten fann studien att det finns ett behov för efterfrågeflexibilitets lösningar bland elnätsägare, samt ett behov för transparens- och kontroll-verktyg för villaägare. Detta ger möjlighet för att kommersialisera DCBn. Behoven hos både elnätsägare och villaägare kan uppnås genom att paketera DCBn som ett efterfrågeflexibilitets-, transparens- och övervaknings-verktyg. Rekommendationen till Manetos var att fokusera på kundsegmenten elnätsägare, främst de kommunalt ägda, samt villaägare. Studien fann att kommunalägda elnätsägare fokuserade mer på samhällsekonomi är de vinstdrivande elnätsföretagen. Vidare så fann studien att de kommunala elnätsägarna vilka idag använder effekt tariffer, hade ett stort intresse för DCBn som ett verktyg för att minska effekttoppar och uppnå bättre övervakning. För villaägare kunde det ses att de personer som ägde elbilar eller hade direktverkande el i bostaden visade störst intresse för ett verktyg såsom DCBn. Även kundsegmentet fastighetsägare visade sig vara av intresse, dock genomfördes inte ett tillräckligt stort antal intervjuer inom segmentet för att kunna dra slutsatser om marknadens lönsamhet. Därför föreslås undersökning av detta segment för vidare framtida studier, såväl som att undersöka potentialen för DCBn internationellt samt att inkludera ett större antal villaägare i studien.