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- Agent-based retail competition and portfolio optimization in liberalized electricity markets: A study involving real-world consumersPublication . Algarvio, Hugo; Lopes, FernandoABSTRACT: The liberalization of energy markets brought full competition to the electric power industry. In the wholesale sector, producers and retailers submit bids to day-ahead markets, where prices are uncertain, or alternatively, they sign bilateral contracts to hedge against pool price volatility. In the retail sector, retailers compete to sign bilateral contracts with end-use customers. Typically, such contracts are subject to a high-risk premium—that is, retailers request a high premium to consumers to cover their potential risk of trading energy in wholesale markets. Accordingly, consumers pay a price for energy typically higher than the wholesale market price. This article addresses the optimization of the portfolios of retailers, which are composed of end-use customers. To this end, it makes use of a risk-return optimization model based on the Markowitz theory. The article presents a simulation-based study conducted with the help of the MATREM system, involving 6 retailer agents, with different risk preferences, and 312 real-world consumers. The retailers select a pricing strategy and compute a tariff to offer to target consumers, optimize their portfolio of consumers using data from the Iberian market, sign bilateral contracts with consumers, and compute their target return during contract duration. The results support the conclusion that retail markets are more favourable to risk-seeking retailers, since substantial variations in return lead to small variations in risk. However, for a given target return, risk-averse retailers consider lower risk portfolios, meaning that they may obtain higher returns in both favourable and unfavourable situations.
- Decarbonization of electricity systems in Europe: market design challengesPublication . Strbac, Goran; Papadaskalopoulos, Dimitrios; Chrysanthopoulos, Nikolaos; Estanqueiro, Ana; Algarvio, Hugo; Lopes, Fernando; Vries, Laurens de; Morales-España, Germán; Sijm, Jos; Hernandez-Serna, Ricardo; Kiviluoma, Juha; Helistö, NiinaABSTRACT: Driven by climate change concerns, Europe has taken significant initiatives toward the decarbonization of its energy system. The European Commission (EC) has set targets for 2030 to achieve at least 40% reduction in greenhouse gas emissions with respect to the 1990 baseline level and cover at least 32% of the total energy consumption in the European Union (EU) through renewable energy sources, predominantly wind and solar generation. However, these technologies are inherently characterized by high variability, limited predictability and controllability, and lack of inertia, significantly increasing the balancing requirements of the system with respect to historical levels. The flexibility burden is currently carried by flexible fossil-fueled conventional generators (mainly gas), which are required to produce significantly less energy (as low operating cost and CO2-free renewable and nuclear generation are prioritized in the merit order) and operate part loaded with frequent startup and shut-down cycles, with devastating effects on their cost efficiency.
- Enterprise Europe Network (EEN) : Notas para a preparação de relatórios de sustentabilidade : Informação de apoio às PMEPublication . Miranda, Miguel; Catarino, Justina; Couto, António; Lopes, Fernando; Afonso, JoanaRESUMO: A Enterprise Europe Network (EEN) é uma rede de serviços que tem como objetivo ajudar as empresas ou organizações a inovar e a competir no quadro internacional. As entidades que pretendam inovar, competir e estabelecer parcerias com as suas congéneres estrangeiras ou que necessitam também de instrumentos que lhes permitam avaliar o desempenho do seu modelo de negócio podem fazê-lo através desta rede. Das diversas possibilidades disponibilizadas pela EEN destaca-se a preparação de relatórios de sustentabilidade. Os relatórios de sustentabilidade e a EEN podem estar relacionados por diferentes maneiras uma vez que esta rede visa auxiliar as empresas ou organizações a tornarem-se mais competitivas e inovadoras por via da oferta de um conjunto de serviços e informações relevantes num quadro internacional. No âmbito da Sustentabilidade, a EEN permite a disseminação, em larga escala, de informação diversa, bem como das melhores práticas relacionadas com o desenvolvimento sustentável em diferentes áreas de atuação. No quadro da divulgação de informações do modelo de negócio, os relatórios de sustentabilidade são utilizados como uma ferramenta que permite avaliar e comunicar o desempenho ambiental, social e económico de uma empresa ou organização. A EEN pode fornecer orientações e recursos que permitem apoiar estas entidades a desenvolver os seus relatórios de sustentabilidade, garantindo que as informações relevantes sejam identificadas e divulgadas de maneira adequada e assertiva. Na partilha de boas práticas, a EEN atua como uma plataforma de divulgação de boas práticas entre as entidades, de experiências na implementação de medidas sustentáveis e dos resultados alcançados, também por via dos relatórios de sustentabilidade, servindo de inspiração a outras empresas a adotarem práticas semelhantes. Na componente da sustentabilidade, a EEN pode oferecer ainda um suporte e uma orientação para todas as entidades que tenham o objetivo de se tornarem mais sustentáveis, por via da divulgação de informações sobre regulamentações ambientais, incentivos governamentais, bem como através da identificação de estratégias de economia de recursos em diferentes áreas tidas como relevantes. Os relatórios de sustentabilidade podem ser uma ferramenta muito útil na avaliação do progresso e na identificação de novas áreas de atuação ou de áreas que podem ainda ser desenvolvidas. Esta informação permite também demonstrar o compromisso e o desempenho destas entidades, tornando-as mais resilientes e, consequentemente, mais atrativas para investidores, parceiros comerciais e clientes. No quadro do acesso ao financiamento e nas oportunidades de negócios, a rede EEN permite ainda identificar oportunidades de financiamento e de negócios. Assim, os relatórios de sustentabilidade e a EEN estão estritamente interligados no sentido de que esta rede internacional pode fornecer suporte, orientação e recursos às entidades que manifestem o compromisso em promover a sustentabilidade e que, tenham ainda como objetivo, a avaliação e a comunicação do desempenho do seu modelo de negócio nas mais diferentes áreas de atuação. O presente documento congrega um conjunto de informação objectiva, estruturada e orientada e que tem como principal objetivo apoiar as entidades na preparação de relatórios de sustentabilidade. Assim, na Secção 1 são apresentados os serviços disponibilizados pela EEN, bem como identificadas as principais vantagens e a relação de proximidade que existe entre a EEN e estas entidades e a sua relação (critérios, benefícios e obrigatoriedade) com as normas e indicadores - European Sustainability Reporting Standards (ESRS). Na Secção 2 são abordados os temas relacionados com as normas europeias, o seu enquadramento, transparência, comparabilidade e gestão de desempenho, identificando os principais requisitos, objetivos e os critérios, bem como identificados os Critérios Técnicos de Avaliação e os Objetivos de Desenvolvimento Sustentável no âmbito da Taxonomia da União Europeia. Na Secção 3 é apresentada a estrutura e as principais áreas de atuação das ESRS-ESG (Environmental, Social e Governance) e sua relevância, identificados os desafios e limitações, bem como as principais estratégias de superação dos desafios. Nesta secção são ainda assinaladas algumas limitações ao atual enquadramento normativo. Na Secção 4 são apresentadas as principais conclusões.
- Renewable energy support policy based on contracts for difference and bilateral negotiationPublication . Algarvio, Hugo; Lopes, Fernando; Santana, JoãoABSTRACT: The European Union has been one of the major drivers of the development of renewable energy. The energy policies of most European countries have involved subsidized tariffs, such as the feed-in tariff in Portugal, the regulated tariff and the market price plus premium in Spain, and the Renewables Obligation in UK, that came into effect in 2002. Recently, UK has made some reforms and started to consider contracts for difference (CfDs) as a key element of the energy policy. This paper presents a support policy based on CfDs and bilateral negotiation. The first phase consists in a CfD auction and the second phase involves a bilateral negotiation between a Government and each of the selected investors. The paper also presents a case-study to analyze the potential benefits of the support policy. It was performed with the help of the MATREM system. The preliminary results indicate some advantages for the Government (and, in some cases, for the investors as well).
- Potential impact of load curtailment on the day-ahead Iberian market : a preliminary analysisPublication . Rodrigues, Francisco; Algarvio, Hugo; Lopes, Fernando; Pronto, Anabela; Santana, JoãoABSTRACT: Demand response (DR) in electricity markets may offer a variety of financial and operational benefits. Typically, customers respond to DR events by adopting curtailment and shifting strategies. This article focuses on the former strategy and assumes that consumers are encouraged to avoid consuming electricity during specific hours of a 24 h day, because the energy price is above a given threshold. It presents a study on the Iberian market, conducted with the help of an agent-based simulation tool, called MATREM. The results are very favorable to the adoption of the load curtailment strategy (as a consequence of the enrollment in different DR programs).
- Interdisciplinary approach to automated negotiation: a preliminary reportPublication . Lopes, Fernando; Novais, Augusto Q.; Coelho, HelderAutonomous agents with negotiation competence are becoming increasingly important and pervasive. This paper follows an interdisciplinary approach to build autonomous negotiating agents by considering both game-theoretic techniques and bargaining procedures from the social sciences. The paper presents a generic model that handles bilateral multi-issue negotiation, describes equilibrium strategies for the bargaining game of alternating offers, and formalizes important strategies used by human negotiators. Autonomous agents equipped with the model are able to negotiate under both complete and incomplete information, thereby making them very compelling for automated negotiation.
- Towards an interdisciplinary framework for automated negotiationPublication . Lopes, Fernando; Novais, Augusto Q.; Coelho, HelderNegotiation is an important and pervasive form of social interaction. The design of autonomous negotiating agents involves the consideration of insights from multiple relevant research areas to integrate different perspectives on negotiation. As a starting point for an interdisciplinary research effort, this paper presents a model that handles bilateral multi-issue negotiation, employs game-theoretic techniques to define equilibrium strategies for the bargaining game of alternating offers, and formalizes a set of negotiation strategies and tactics studied in the social sciences. Autonomous agents equipped with the model are currently being developed using the Jade framework. The agents are able to negotiate under both complete and incomplete information, thereby making the model in particular and the agents in general very compelling for automated negotiation
- Influence of Increasing Renewable Power Penetration on the Long-Term Iberian Electricity Market PricesPublication . Leal, Pedro; Castro, Rui; Lopes, FernandoABSTRACT: n recent years, there has been a significant increase in investment in renewable energy sources, leading to the decarbonization of the electricity sector. Accordingly, a key concern is the influence of this process on future electricity market prices, which are expected to decrease with the increasing generation of renewable power. This is important for both current and future investors, as it can affect profitability. To address these concerns, a long-term analysis is proposed here to examine the influence of the future electricity mix on Iberian electricity prices in 2030. In this study, we employed artificial intelligence forecasting models that incorporated the main electricity price-driven components of MIBEL, providing accurate predictions for the real operation of the market. These can be extrapolated into the future to predict electricity prices in a scenario with high renewable power penetration. The results, obtained considering a framework featuring an increase in the penetration of renewables into MIBEL of up to 80% in 2030, showed that electricity prices are expected to decrease by around 50% in 2030 when compared to 2019, and there will be a new pattern of electricity prices throughout the year due to the uneven distribution of renewable electricity. The study's findings are relevant for ongoing research on the unique challenges of energy markets with high levels of renewable generation.
- Market design for a reliable ~100% renewable electricity system: Deliverable D3.5Publication . Morales-España, Germán; Algarvio, Hugo; Vries, Laurens de; Faia, Ricardo; Hernandez-Serna, Ricardo; Johanndeiter, Silke; Couto, António; José, Débora Regina S.; Papadaskalopoulos, Dimitrios; Lopes, Fernando; Strbac, Goran; Sanchez, Ingrid; Kochems, Johannes; Helistö, Niina; Chrysanthopoulos, Nikolaos; Estanqueiro, AnaABSTRACT: The goal of this report is to identify in which respects the design and regulation of electricity markets needs to be improved in order facilitate a (nearly) completely decarbonized electricity system. It provides a basis for scoping the modeling analyses that are to be performed in subsequent work packages in the TradeRES project. These simulations will provide the basis for an update of this deliverable in the form of a more precise description of an all-renewable electricity market design. In this first iteration1 of deliverable 3.5, we analyze how the current design of electricity markets may fall short of future needs. Where there is a lack of certainty about the best market design choices, we identify alternative choices. Alternatives may concern a choice between policy intervention and no intervention or different intervention options. Section 2 outlines current European electricity market design and the key pieces of European legislation that underlie it. The European target model is zonal pricing with bidding zones that are defined as geographic areas within the internal market without structural congestion. That implies that within one bidding zone electricity can be traded without considering grid constraints and there are uniform wholesale prices in each zone. The main European markets are Nordpool, EPEX and MIBEL. Trading between zones in the European Price Coupling Region occurs through an implicit auction where price and quantity are computed for every hour of the next day, using EUPHEMIA, a hybrid algorithm for flowbased market coupling that is considered the best practice in Europe at this time.
- Changing the day-ahead gate closure to wind power integration: a simulation-based studyPublication . Algarvio, Hugo; Couto, António; Lopes, Fernando; Estanqueiro, AnaABSTRACT: Currently, in most European electricity markets, power bids are based on forecasts performed 12 to 36 hours ahead. Actual wind power forecast systems still lead to large errors, which may strongly impact electricity market outcomes. Accordingly, this article analyzes the impact of the wind power forecast uncertainty and the change of the day-ahead market gate closure on both the market-clearing prices and the outcomes of the balancing market. To this end, it presents a simulation-based study conducted with the help of an agent-based tool, called MATREM. The results support the following conclusion: a change in the gate closure to a time closer to real-time operation is beneficial to market participants and the energy system generally.