In the frame of the H2020 project MAGNITUDE, N-SIDE and VITO have designed innovative integrated markets in which conversion and storage orders enable asset owners to mitigate spot market risks and trade more efficiently thanks to co-cleared gas, electricity and heat markets.
The objective of the H2020 project MAGNITUDE is to develop business and market mechanisms as well as supporting coordination tools to provide flexibility to the European electricity system, by increasing and optimizing synergies between electricity, gas and heat systems.
There is an intrinsic value in higher integration of multi-carrier energy systems, especially gas and electricity, to increase operational flexibility in the electricity system and to improve allocation of resources in gas and electricity networks.
However, the integration of different energy carrier markets is challenging due to the existence of physical and economic dependencies between the different energy carriers.
N-SIDE and VITO have investigated in a recent published academic article  the design of an integrated day-ahead multi-carrier gas, electricity and heat market which includes new types of orders to represent technical constraints, cost structures of conversion, and storage technologies.
Simulations show the benefits for the market parties of the integration performed by well-designed bidding tools for conversion and storage technologies.
Mitigating risk of market participants
It is proved in the paper that market outcomes are always optimal for market parties in the sense that prices computed for each carrier market (gas, electricity and heat) across the clearing horizon are arbitrage free for conversion and storage technology owners. Technically, clearing of these multi-energy carrier markets results in competitive equilibria.
Bringing flexibility provided by multi energy carrier integration to a new MAGNITUDE
Market designs developed in the paper by N-SIDE and VITO allows better leveraging the flexibility that conversion and storage units can provide, enabling integrating renewable energy and facilitate the energy transition further. That higher integration of multi-carrier energy systems could hence act as an enabler to the energy transition, besides bringing more efficiency in those systems.
 Shahab Shariat Torbaghan, Mehdi Madani, Peter Sels, Ana Virag, Hélène Le Cadre, Kris Kessels, and Yuting Mou. “Designing day-ahead multi-carrier markets for flexibility: Models and clearing algorithms.” Applied Energy 285 (2020): 116390.
Acknowledgement: Work realized in the frame of the Magnitude project which has received funding from the European Union’s Horizon 2020 research and innovation programme under grant agreement No. 774309. The work and the results described reflect only the view of the authors. The European Commission and the Innovation and Networks Executive Agency (INEA) are not responsible for any use that may be made of the information they contain.
This work on multi-carrier markets complements the extensive expertise of N-SIDE related to market clearing design and solutions.
For more information, visit our Energy Market Optimization web page or download the full published article below: