In this paper, we build a realistic large-scale agent-based model of the Italian electricity market and run simulations to investigate how a signi cant increase of installed wind capacity can a ect electricity prices at the national level when, as in the case of Italy, the wind resource is geographically concentrated. The simulator implements both cost-based and oligopoly models in which electricity companies learn to bid strategically. We compare a scenario based on the 2010 wind supply and a scenario based on the maximum potential wind capacity as estimated in technical reports. Results con rm the bene cial e ect of low-cost renewable energy in reducing average market prices, but simulated power ows in the grid suggest that congestion in the electricity network induced by high wind penetration creates market power opportunities that can o set the price reduction e ects.
High wind penetration in an agent-based model of the electricity market: the case of Italy
SAPIO, Alessandro
2012-01-01
Abstract
In this paper, we build a realistic large-scale agent-based model of the Italian electricity market and run simulations to investigate how a signi cant increase of installed wind capacity can a ect electricity prices at the national level when, as in the case of Italy, the wind resource is geographically concentrated. The simulator implements both cost-based and oligopoly models in which electricity companies learn to bid strategically. We compare a scenario based on the 2010 wind supply and a scenario based on the maximum potential wind capacity as estimated in technical reports. Results con rm the bene cial e ect of low-cost renewable energy in reducing average market prices, but simulated power ows in the grid suggest that congestion in the electricity network induced by high wind penetration creates market power opportunities that can o set the price reduction e ects.I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.
