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Title:
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Discussion Paper: Short-Term Price and Volume Interactions in an Integrated Gas- & Electricity Market Framework
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Author(s):
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Published by:
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Publication date:
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ECN
Policy Studies
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22-12-2015
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ECN report number:
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Document type:
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ECN-E--15-073
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ECN publication
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Number of pages:
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Full text:
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31
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Download PDF
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Abstract:
Gas and electricity (G&E) markets are interdependent due to the participation of natural
gas fired power plants (NGFPPs) in both markets. Policy makers and regulators require
tools to understand the implications of possible technology-, policy-, and economic developments
in one market for the opera??on of the other. Although each market is studied
extensively, i.e. by means of a gas market model or an electricity market model, these
studies are confined to a certain extent in the sense that G&E market interdependencies
are not considered, or at most, only in an iterative manner. In this paper, we propose an
integrated gas- and electricity market model focusing on short-term interdependencies
that relate to price and volume interactions. The short-run Integrated ELectricity and GAS
market (I-ELGAS) model is an economic equilibrium model for hourly price and volume
interac??ons, that takes into account ramping rates of conventional units, intermittent renewable
(I-RES) variability, seasonal- and peak gas storage, and electricity storage. We
show that this equilibrium model can be formulated as a Quadra??c Program (QP) under
the assumption of perfect competition. This assumption allows for solving large-scale systems.
The model is applied to a (four-node) system to analyse the impact of higher I-RES
generation, higher CO2 prices and different types of energy storage on the price and volume
interactions in the gas- and electricity market.
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