Swedish researchers have struck a deal to help renewable energy producers and retailers pay high imbalance costs. The new framework could increase clean energy returns by up to 4.8% and retail profits by more than 7%, researchers claim.
Researchers at Sweden’s Lulea University of Technology have developed Flexcon, a contract-based flexible electricity trading system between variable renewable energy producers (VREP) and electricity retailers (RET). Flexcon seeks to provide an alternative to the day-ahead market (DAM) and balancing market (BLM) VREPs, which are followed by systemic imbalances due to the intermittent nature of supply.
“VREP’s bid is considered a decision parameter in the RET decision problem,” they said, arguing that RET’s bid is also a decision parameter for VREP. “When it’s negative, it means the VREP is ready to sell, and when it’s positive, it indicates the VREP is ready to buy.”
Based on several case studies, the researchers found that the proposed contract could potentially increase the expected profit of the participants. VREPs can increase by as much as 4.8%, while RETs can increase by 7.15%.
“The impact of FlexCon on the parties’ profit is greater when the difference between the DAM price and the BLM price is larger,” they said. “The impact of FlexCon on the profit of the parties is greater when the uncertainty of the maximum flexibility of the exchangeable power is greater.”
The researchers presented their findings “Contract-based electricity flexibility trade between variable renewable energy producer and electricity retailer”, which was recently published in Sustainable energy, networks and networks.
