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The German offshore wind tender, launched in April 2017, resulted in three out of the four winning projects being delivered with zero subsidies, relying only on the wholesale price. This result has been regarded as a turning point for the industry. This paper analyses the 2017/18 German offshore wind tenders and the bidding strategies of the winning developers. We then propose a re-design of the tenders with the aim of achieving optimality/zero-subsidies and efficiency - two key properties in mechanism design. The paper contributes to the discussion on how to design offshore wind tenders with both a policy and theoretical perspective. This is of particular relevance given the rapid expansion of this type of investment in Europe and the use of auctions to select developers. [ABSTRACT FROM AUTHOR]

This paper presents a comparative analysis of various capacity mechanisms that are either in force or under approval in key countries/regions in Europe and the US. A detailed analysis on the necessities that led to the establishment of the capacity mechanisms, along with various fundamental technical and operational features associated with the design and operation of different capacity mechanisms, mainly in Europe (Italy, France, Germany, Belgium, Poland, Great Britain, Ireland, Cyprus) and complementarily in the US (PJM, New England), are presented. This analysis is complemented by a real-life application regarding the long-term capacity remuneration mechanism that is expected to be established in Greece in the near future. A detailed simulation of the envisaged capacity mechanism auctions under differentiated scenarios has been performed, regarding the future Greek power system operating conditions during the forthcoming decade (2022–2031). Test results illustrate that the outcome of the auctions is heavily dependent on the future energy generation mix and the market participants' bidding strategy. Whereas, the total cost that will have to be undertaken by the electricity supply companies and, ultimately, by the end-consumers for the financing of the proposed capacity mechanism lies in the range of 5.5–8.7 €/MWh for the entire study period. [ABSTRACT FROM AUTHOR]

This paper uses evidence from a data set of 27 European IPOs to analyze how investors bid and the factors that influence their allocations. We also make use of a unique ranking of investor quality, associated with the likelihood of flipping the IPO. We find that investors perceived to be long-term holders of the stock are consistently favored in allocation and in out-turn profits. In contrast to Cornelli and Goldreich (2001), we find little evidence that more informative bids receive larger allocations or higher profits. Our results cast doubt upon the extent of information production during the bookbuilding period. [ABSTRACT FROM AUTHOR]

This paper addresses the bidding problem faced by a virtual power plant (VPP) in a joint market of energy and spinning reserve service. The proposed bidding strategy is a non-equilibrium model based on the deterministic price-based unit commitment (PBUC) which takes the supply-demand balancing constraint and security constraints of VPP itself into account. The presented model creates a single operating profile from a composite of the parameters characterizing each distributed energy resources (DER), which is a component of VPP, and incorporates network constraints into its description of the capabilities of the portfolio. The presented model is a nonlinear mixed-integer programming with inter-temporal constraints and solved by genetic algorithm (GA). [ABSTRACT FROM PUBLISHER]

In light of the advancing energy transition and an increasing amount of intermittent renewable energy to be integrated, flexibility from distributed energy resources will be key. In this paper, the Italian UVAM (Unità Virtuali Abilitate Miste, i.e., virtually aggregated mixed units) project, one of the biggest pilots in Europe to serve this purpose, is critically reviewed and mapped after two years of operation. The pilot is analyzed on a global level as well as the individual participant level. Based on the extensive analysis of actual market data, different strategies of participating companies to obtain capacity in accordance with the pilot project's design are identified. Furthermore, the specific bidding strategies of individual participating units on the balancing market are outlined. Alongside this, the overall pilot project's market integration, in terms of offered and accepted bids, is depicted. The thorough data analysis, therefore, serves as an input and fundamental building block for future electricity market modeling. Comprehending specific data from the coronavirus disease 2019 (COVID-19) pandemic, provides insights for future high renewable-energy scenarios. Based on the analysis findings, valuable deliverables are devised for both policy-makers and decision-makers who aim to leverage the flexibility potential of distributed resources. [ABSTRACT FROM AUTHOR]

• Automatic Frequency Restoration Reserve market description and analysis. • Prediction methodology to be used for bidding strategies. • Statistical and machine learning based prediction models. • Derivation of the acceptance probability of a bid. • Machine learning based models do not outperform statistical models. In continental Europe, automatic Frequency Restoration Reserve (aFRR) is the second fastest control reserve market. Due to the complex auction design, market entrance barriers for new players are high and the market is dominated by few operators of conventional power plants. However, a rising share of renewable technologies requires their integration into this market in order to assure future grid stability. Due to the high market complexity, operators and traders of such technologies are currently lacking a tool to estimate earning potentials. Both a market prediction methodology as well as a bidding strategy are required to estimate the earning potentials and to participate in the aFRR market. To encourage participation of new technologies, this paper first provides a detailed market description and then presents a market prediction methodology for estimating revenue potentials and to assist in creating bidding strategies for auction participation. For any potential bid, the acceptance probability within the auction is derived. Both statistical and machine learning based models are used for predicting key market quantities. A model comparison reveals a steadier and usually better performance of statistical models. Exogenous data sources such as weather, electrical loads or market data did not improve the prediction performance. [ABSTRACT FROM AUTHOR]

• Automatic Frequency Restoration Reserve market description. • Operating strategy for a generation pool comprising a Battery Energy Storage Systems (BESS) • Bidding strategy to derive optimal bids and to evaluate economic feasibility. • BESS market participation not economic feasible in 2019 but possibly in 2025. In continental Europe, automatic Frequency Restoration Reserve (aFRR) is one of three control reserve services to counteract imbalances in the electrical grid. The market is dominated by a few operators of conventional power plants since the auction design is complex and new players face various entrance barriers. In order to stabilize the electrical grid in the future, renewable generation technologies need to enter the market. To encourage operators (and traders) of renewable generation facilities to enter the market, this paper presents a bidding strategy based on an optimization approach for deriving an optimal bid and for estimating the revenue potential on this market. The focus is on the participation of Battery Energy Storage Systems (BESS) either in standalone mode or in conjunction with a virtual power plant (VPP). An in-depth cost breakdown and battery ageing model support the derivation of earning potentials. With current costs of containerized BESS, an operation is not economically viable. However, with a predicted cost breakdown for the year 2025 and a pooled operation, profits can be generated. But even for the reduced-cost scenario, profits were found to be lower than on the Frequency Control Reserve (FCR) market. [ABSTRACT FROM AUTHOR]

• Investigation integrated home: photovoltaic battery storage and power-heat coupling. • Economic evaluation of integrated homes participating on frequency reserve market. • Investigation of bidding strategies for frequency reserve market participation. • Market participation could enhance the economics of integrated homes up to 14.5%. • Calculation of the marginal savings to get counter-value for reserve power. In central Europe, the number of photovoltaic battery storage systems is steadily growing. Combined with a heat pump for power-to-heat coupling, these storage systems can contribute to sector coupling and increase the use of renewable energies in private households. The growing share of renewable energies leads to further fluctuations in the grid and a growing demand for reserve power. Integrated homes that combine a photovoltaic battery storage system with power-to-heat coupling can contribute to providing control reserve. The frequency restoration reserve in central Europe is divided into a negative and a positive reserve market, enabling market opportunities for integrated homes. Integrated homes participating in the negative frequency restoration reserve market could benefit from energy at low costs. Therefore, integrated homes profit from the additional flexibility provided by the heating sector. Low-cost energy from dual-use operation could lead to enhanced economics of integrated homes, especially during the winter. This paper presents the calculation of the marginal costs and savings for the market participation and the resulting economic influence on integrated homes. Costs for additional battery aging, as well as savings for reduced domestic energy consumption from the grid and an enhanced feed-in, are taken into account. The results show that participation in the German frequency restoration reserve market could reduce the annual costs for heat and electricity of integrated homes by up to 14.5%. A dual-use operation could be beneficial for integrated homes and enhance their market penetration. [ABSTRACT FROM AUTHOR]

We present laboratory experiments of five different multi-unit auction mechanisms. Two units of a homogeneous object were auctioned off among two bidders with flat demand for two units. We test whether expected demand reduction occurs in open and sealed-bid uniform-price auctions. We also test revenue equivalence for these auctions as well as for the Ausubel, the Vickrey and the discriminatory sealed-bid auction. Furthermore, we compare the five mechanisms with respect to the efficient allocation of the units. [ABSTRACT FROM AUTHOR]