Renewable energy integration raises new challenges for grid planning and operations. Enhancing power system flexibility is key to coping with large disturbances resulting from renewable energy integration. Flexibility assets such as dispatchable thermal generation, demand-side resources and electricity storage must be considered to ensure regulation of supply. As the roles of market players are changing with the introduction of new technologies and flexibility assets, the wholesale electricity market design needs to be reviewed.
An innovative market design is critical to provide proper valuation of flexible services and sufficient reserve capacity, ensuring system security. The market design/mechanisms introduced should be able to provide answers to the following questions to ensure the electricity market remains competitive:
- How will thermal plants be compensated for additional costs incurred due to increased cycling (i.e. ramping up and down of thermal plants)?
- To what extent can the aggregator of distributed energy resources provide flexible services?
- With the introduction of intermittent energy resources, will price signals be sufficiently cost-reflective to encourage demand side participation?
- Which business models will enable new and existing entrants to have revenue security, with the changing market conditions?
- Will there be sufficient investment signals to encourage new entrants in the energy market?
- Is there a need for additional incentives/policy reforms for renewable energy providers to recover their fixed cost?
- Will the volatility of the energy markets discourage voluntary contracts which reflect the different risk preferences of market players?
This roundtable will bring together global industry experts and business leaders to access opportunities to unlock the system-wide flexibility potential through innovative market design, and investigate new business models to encourage long-term investments in modern power systems.