Periodic Reporting for period 3 - TradeRES (Tools for the Design and modelling of new markets and negotiation mechanisms for a ~100% Renewable European Power Systems)
Período documentado: 2023-02-01 hasta 2024-11-30
Europe’s renewable energy policies and the transition route towards a near 100 % renewable power system are the most ambitious in the world. The existing designs of most European electric energy markets were conceived for power systems based in conventional and fully dispatchable power technologies. Those markets relied on marginal-cost pricing to provide effective investment incentives and to efficiently deploy available resources. This principle became dysfunctional for power system with large shares of variable renewable energy sources (vRES) as wind and solar photovoltaic (PV) power. Being weather-dependent and essentially non-dispatchable, vRES in some periods may “flood” electricity markets with excess energy, causing the price to drop to zero or even negative.
The TradeRES project developed and tested innovative electricity market designs that can meet society’s needs of a (near) 100% renewable power system. These will need to provide efficient operational and investment incentives for an electricity system that is characterized by the integration of new players and high: i) share of vRES; ii) integration with other energy sectors, and, iii) participation of flexible demand from consumers.
TradeRES focused on the following ground-breaking objectives:
- Identify barriers and deficiencies of current pricing and energy market structures to support and finance future low-carbon energy systems and characterize long-term dynamics
- Calculate cost, value, and price structure of electricity in a ~100% renewable vRES-dominated electricity system for 2030 and beyond
- Conceive, design and model electricity markets that adequately deal with relevant temporal and spatial flexibilities
- Develop optimization and agent-based models beyond the state-of-the-art.
The TradeRES project developed and tested innovative electricity market designs that can meet society’s needs of a (near) 100% renewable power system. These will need to provide efficient operational and investment incentives for an electricity system that is characterized by the integration of new players and high: i) share of vRES; ii) integration with other energy sectors, and, iii) participation of flexible demand from consumers.
TradeRES focused on the following ground-breaking objectives:
- Identify barriers and deficiencies of current pricing and energy market structures to support and finance future low-carbon energy systems and characterize long-term dynamics
- Calculate cost, value, and price structure of electricity in a ~100% renewable vRES-dominated electricity system for 2030 and beyond
- Conceive, design and model electricity markets that adequately deal with relevant temporal and spatial flexibilities
- Develop optimization and agent-based models beyond the state-of-the-art.
From M1-M18, technical procedures were prepared and data gathering planned for a successful implementation of the workplan. A characterization of the European plans was performed to prepare the scenarios to simulate the foreseen case studies. A dataflow platform to be used in the simulation of European markets case studies and innovative designs was selected, and the models previously developed by the consortium’s members started to be adapted and new actors/agents to be modelled.
In this first period, the project, besides accomplishing the first three milestones, contributed to the ENTSO-E consultation of stakeholders on Options for possible Market Design evolutions in 2030 (entsoe.eu) and was invited to present TradeRES’ views at ENTSO-E stakeholder’s workshop.
From M19-M36 the focus and activities were associated with steps 3 and 4 of the project’s methodology that involved i) the conclusion of development of a set of tools capable of simulating the performance of proposed market designs; and ii) the application of those tools to test the (1st iteration) of the proposed market designs in comparison to the reference cases.
The most relevant difficulties experienced in the second reporting period were associated with the unforeseen geo-political events, and the impact they had on the European electricity markets, on the research teams of TradeRES project, and on the contact with stakeholders.
In spite of the additional challenges, during the second reporting period project TradeRES completed the database for the simulations, constructed the scenarios, defined the designs to be applied to WP5 case studies and completed the interlink of market models. It prepared all tools, tutorials and webinars and disseminated them. It is considered the overall workplan progressed steadily in the second reporting period, although some delays were identified.
The unfortunate events in Europe proved the objectives and ambition of TradeRES’ project are even more relevant in 2022 than at the beginning of the project. By the end of the second reporting period the delays identified in key activities of the project justified an extension of 10 months, what enabled to re-schedule the remaining final phase of the project and complete the workplan foreseen without additional deviations.
In an overview, TradeRES project and consortium were able to adapt to the altered circumstances of the electricity markets in Europe and refocused a project conceived for low TRLs to a much closer-to-market reality, as demonstrated by the ENTSO-E and EC consultations on electricity markets’ reforms.
TradeRES produced new market designs, models and products to test the new trends in European electricity markets, e.g. by: i) simulating scenarios for the newly proposed retribution schemes, CfDs – Contracts for Differences, alerting for their intrinsic differences and impacts in competitive trading; ii) addressing Capacity Remuneration Mechanisms (CRMs) versus energy-only market’s, enabling to conclude on the added-value of CRMs; as well as iii) developing strategies for the participation of variable-RES in different electricity markets, concluding they are able to maximize revenues and reduce their imbalances.
In summary, TradeRES not only fulfilled all the project initial objectives, but embraced new ones introduced by the actual European geo-politics and their intrinsic energy and market’s challenges. It produced, apart from a large quantity of high-quality deliverables, most publicly accessible; an open-access database for electricity markets simulations; several models and open-access tools (including a and a webtool) for markets simulations. The project concluded by publishing of a set of Electricity Market’s Recommendations summarized in the projects final Policy Brief, available at https://traderes.eu/wp-content/uploads/2025/01/TradeRES_PolicyBrief.pdf(se abrirá en una nueva ventana)
In this first period, the project, besides accomplishing the first three milestones, contributed to the ENTSO-E consultation of stakeholders on Options for possible Market Design evolutions in 2030 (entsoe.eu) and was invited to present TradeRES’ views at ENTSO-E stakeholder’s workshop.
From M19-M36 the focus and activities were associated with steps 3 and 4 of the project’s methodology that involved i) the conclusion of development of a set of tools capable of simulating the performance of proposed market designs; and ii) the application of those tools to test the (1st iteration) of the proposed market designs in comparison to the reference cases.
The most relevant difficulties experienced in the second reporting period were associated with the unforeseen geo-political events, and the impact they had on the European electricity markets, on the research teams of TradeRES project, and on the contact with stakeholders.
In spite of the additional challenges, during the second reporting period project TradeRES completed the database for the simulations, constructed the scenarios, defined the designs to be applied to WP5 case studies and completed the interlink of market models. It prepared all tools, tutorials and webinars and disseminated them. It is considered the overall workplan progressed steadily in the second reporting period, although some delays were identified.
The unfortunate events in Europe proved the objectives and ambition of TradeRES’ project are even more relevant in 2022 than at the beginning of the project. By the end of the second reporting period the delays identified in key activities of the project justified an extension of 10 months, what enabled to re-schedule the remaining final phase of the project and complete the workplan foreseen without additional deviations.
In an overview, TradeRES project and consortium were able to adapt to the altered circumstances of the electricity markets in Europe and refocused a project conceived for low TRLs to a much closer-to-market reality, as demonstrated by the ENTSO-E and EC consultations on electricity markets’ reforms.
TradeRES produced new market designs, models and products to test the new trends in European electricity markets, e.g. by: i) simulating scenarios for the newly proposed retribution schemes, CfDs – Contracts for Differences, alerting for their intrinsic differences and impacts in competitive trading; ii) addressing Capacity Remuneration Mechanisms (CRMs) versus energy-only market’s, enabling to conclude on the added-value of CRMs; as well as iii) developing strategies for the participation of variable-RES in different electricity markets, concluding they are able to maximize revenues and reduce their imbalances.
In summary, TradeRES not only fulfilled all the project initial objectives, but embraced new ones introduced by the actual European geo-politics and their intrinsic energy and market’s challenges. It produced, apart from a large quantity of high-quality deliverables, most publicly accessible; an open-access database for electricity markets simulations; several models and open-access tools (including a and a webtool) for markets simulations. The project concluded by publishing of a set of Electricity Market’s Recommendations summarized in the projects final Policy Brief, available at https://traderes.eu/wp-content/uploads/2025/01/TradeRES_PolicyBrief.pdf(se abrirá en una nueva ventana)
Although the renewable share in the European power systems is unique in the world, the path to a ~100% renewable energy system is still uncharted. It is still not clear how to raise the different flexibility potentials, from demand response to sector coupling. The role of short-term to real-time trading, like the adaptation of gate-closure times to forecasts, or of regional solutions like local energy marketing is still mostly unrevealed. Accordingly, the conditions for an efficient interplay of these diverse flexibility options need to be understood.
To explore all those features and provide landscape of future market designs, TradeRES project developed optimization and agent-based models to reach all the objectives of the project. These models included new features to simulate i) emerging new players (as aggregators and prosumers), and ii) spatial and temporal flexibility options, and iii) new market designs and products. These improvements were tested into five different cases studies - local energy markets, the Iberian, Germany and Netherland markets, and at a pan-European scale, to provide contributions to address the medium-term goals proposed by the European Union to all member-states and the society’s aspirations for more sustainable energy future. All tools are available for testing by stakeholders. In addition, a user-friendly web-based market design decision-tool for policy-makers and other stakeholders was provided by TradeRES.
To explore all those features and provide landscape of future market designs, TradeRES project developed optimization and agent-based models to reach all the objectives of the project. These models included new features to simulate i) emerging new players (as aggregators and prosumers), and ii) spatial and temporal flexibility options, and iii) new market designs and products. These improvements were tested into five different cases studies - local energy markets, the Iberian, Germany and Netherland markets, and at a pan-European scale, to provide contributions to address the medium-term goals proposed by the European Union to all member-states and the society’s aspirations for more sustainable energy future. All tools are available for testing by stakeholders. In addition, a user-friendly web-based market design decision-tool for policy-makers and other stakeholders was provided by TradeRES.