Project description
Solution for efficient and crisis-resilient energy price discovery
The recent energy crisis has intensified the ongoing struggle to combat climate change and transition to cleaner energy solutions, with societies facing steep increases in energy costs. Heated debates have blurred the boundaries between systems and markets, revealing a 'wind of change' in electricity market design, whose direction remains unclear. The ERC-funded CRISP project aims to seize this opportunity to promote just and equitable decarbonisation by developing disruptive theories, innovative methodologies, and new mechanisms for discovering efficient and crisis-resilient prices. Project work will have the added effect of minimising the gap between market-driven outcomes and decisions made by system operators. To achieve this, CRISP will explore new concepts based on generalised linear programming, adaptive robust optimisation, and interpretable machine learning.
Objective
Can we turn the Energy Crisis into an opportunity that advances the clean energy transition? Yes, we can, and we pave the path leading to just and equitable decarbonization. Debates that followed extreme events in Europe and the US pointed to a “wind of change” for the power market design and the price discovery process. Operators are put in the corner, inheriting market schedules that they more and more amend using their judgement, whereas they are also accountable for their out-of-market decisions. The process is inherently sub-optimal and costly! Extreme events may turn annual market revenues into daily energy costs!
I will explore innovative ideas in Generalized Linear Programming and adaptive robust optimization with data-driven uncertainty sets, to support network and reliability related operator decisions, and novel machine learning developments to remove computational barriers while maintaining interpretability. Tackling major obstacles that derive from non-convexities, externalities, and uncertainty (to date open problems), leveraging demand adaptability, and combining optimization with economic theory, I will break new ground by (i) defining efficient, adaptive, and robust prices that minimize the gap between market outcomes and operator decisions, and (ii) designing innovative protection mechanisms that dynamically delineate the (blurred) boundaries between systems and markets encoding crisis resilience and shielding from catastrophic financial impacts.
CRISP will break the barriers that have restricted power markets to “half-markets” for more than 30 years tapping adaptable demand and set the foundations for efficient scheduling and correct investment signals in innovation, infrastructure, resource adequacy, and sustainability. The theoretical and computational breakthroughs will benefit a wide class of problems (scheduling, routing, and others) and are also relevant to integrated grids and systems hampered similarly by climate change and extreme events.
Keywords
Programme(s)
- HORIZON.1.1 - European Research Council (ERC) Main Programme
Topic(s)
Funding Scheme
HORIZON-ERC - HORIZON ERC GrantsHost institution
75272 Paris
France