The Re-Evolution of Short- and Long-term
Electricity Market Design
Towards an electricity market for all
MIT's Utility of the Future Study
Understanding how distributed energy resources are changing the provision of electricity services
Carlos Batlle
[email protected]
www.iit.comillas.edu/batlle
European Power Market Summit: Today’s trends, power for tomorrow
Towards a common vision for European electricity markets?
EPEXSPOT in partnership with the Florence School of Regulation
5 – 6 October 2016, Brussels
http://energy.mit.edu/research/utility-future-study/
Utility of the Future Consortium Members
External Advisory Committee
Phil Sharp, Utility of the Future Advisory Committee Chair, President, Resources for the Future
Richard O’Neill, Utility of the Future Advisory Committee Vice Chair, Chief Economic Advisor, FERC
Janet Besser, VP for Policy and Government Affairs, New England Clean Energy Council
Paul Centolella, Paul Centolella & Associates
Martin Crouch, Senior Partner, Ofgem Smarter Grids & Governance: Transmission
Phil Giuidice, CEO and President, Ambri Inc.
Timothy Healy, Chairman & CEO, EnerNoc. Represented by Peter Holzaepfel, Senior Analyst & Marketing
Manager, EnerNoc
Manuel Sanchez Jimenez , Policy Officer, European Commission
Paul Joskow, President and CEO, Alfred P. Sloan Foundation, MIT Professor Emeritus
Alex Laskey, President & Founder, Opower. Represented by Jim Kapsis, VP Global Policy & Regulatory
Affairs, Opower
Luca Lo Schiavo Deputy Director, Service Quality and Consumer Affairs, Italian Regulatory Authority for
Electricity and Gas
Audrey Zibelman, Chair, New York State Public Service Commission
MIT’s Utility of the Future Study
Research Team
Principal Investigator
Ashwini Bharatkumar (MIT)
Scott Burger (MIT)
Dr. José Pablo Chaves (Comillas)
Dr. Cyril Draffin
Ignacio Herrero (Comillas)
Sam Huntington (MIT)
Jesse Jenkins (MIT)
Max Luke (MIT)
Dr. Raanan Miller (MIT)
Dr. Pablo Rodilla (Comillas)
Dr. Richard Tabors (MIT)
Dr. Karen Tapia-Ahumada (MIT)
Dr. Claudio Vergara (MIT)
Nora Xu (MIT)
Prof. Ignacio Pérez-Arriaga (MIT/Comillas)
Prof. Christopher Knittel (MIT)
Directors
Dr. Raanan Miller (MIT)
Richard Tabors (MIT)
Faculty Committee
Prof. Carlos Batlle (MIT/Comillas)
Prof. Michael Caramanis (BU)
Prof. John Deutch (MIT)
Prof. Tomas Gomez (Comillas)
Prof. William Hogan (Harvard)
Prof. Steven Leeb (MIT)
Prof. Richard Lester (MIT)
Prof. Les Norford (MIT)
Dr. John Parsons (MIT)
Prof. Richard Schmalensee (MIT)
MIT’s Utility of the Future Study
MIT’s Utility of the Future Study
Could regulation be prepared for whatever occurs?
• No one can predict the future with perfect
foresight
– The best we can do is construct a sound and robust
set of regulations, prices, and charges and let an
efficient power sector emerge
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MIT’s Utility of the Future Study
A toolkit for a “future proof” power system
• Identify unnecessary barriers and distortionary
incentives that impede the evolution of the
power sector
– Special focus on distributed energy resources
(DERs)
• Design a framework to establish a level
playing field for the provision and
consumption of electricity services
(centralized or distributed)
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MIT’s Utility of the Future Study
Core findings
• Improve prices and regulated charges (e.g.
tariffs) for power consumption and injection
• Upgrade the regulation of distribution utilities
• Carefully reconsider the structure of the
electricity industry
• Improve wholesale market design to create a
level playing field for all technologies
• Cyber security and privacy increasingly matter
• Economies of scale might still be significant
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MIT’s Utility of the Future Study
The re-evolution of short- and long-term
electricity market design
The re-evolution of short- and long-term electricity market design
Towards an electricity market for all
• Levelizing the playing field: short-term markets
for an efficient integration of the new diversity
of resources
– Day-ahead and intraday market mechanisms
– Reserves and balancing markets
• Balancing long-term policy-oriented objectives,
uncertainty and market shortsightedness
– Dealing with long-term uncertainty: Capacity
Mechanisms
– Market friendly support schemes for clean energy
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The re-evolution of short- and long-term electricity market design
Short-term markets
• Energy markets
– Efficient intraday prices and market designs
– Alignment of prices and dispatch instructions
• Reserves and balancing markets
– Efficient pricing of reserves
– Imbalance settlements and balancing
responsibilities
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The re-evolution of short- and long-term electricity market design
Long-term complements for energy markets
• Capacity mechanisms
– Interaction of capacity mechanisms with other
support mechanisms
– Avoid mixing objectives
• Support schemes for clean energy
technologies
– Capacity-based schemes for market compatibility
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Stay tuned, fourth quarter 2016…
http://energy.mit.edu/research/utility-future-study/
Carlos Batlle
Assoc. Professor @ Institute for Research in Technology (Comillas University)
Research Scholar @ MIT Energy Initiative (MIT)
Electricity Advisor @ Florence School of Regulation (EUI)
Contact:
[email protected]
www.iit.comillas.edu/batlle
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