Introduction
The Ahead- and Balancing Electricity Market (ABEM) is a two-stage market mechanism, developed at the Intelligent Systems (IS) group of CWI. It is inspired by recent developments in wholesale market design for electricity, but is better suited for smaller, non-sophisticated players, for instance in smart grids. We will soon be able to offer the functionality of ABEM as a web service to project partners via our market framework Market Garden.
In coordination problems in the energy domain, planning ahead is highly important to reach efficient outcomes. Two examples are the use of weather forecasts, such that solar power can be put to maximal use, and to plan when to power on the home heating, such that heating costs are minimised across a whole day. Markets are highly effective tools to solve such problems, when a higher number of devices is involved.
The arrangement of trading electricity in two ways, as early commitments (for planning) and as reserve capacity (for balancing), exists in several (wholesale) auctions today, but it is very complex. It is not easy for a market operator to find efficient outcomes across the inherent timing issues and it is not easy for bidders to participate. This is why we have developed a novel market mechanism.
Special features of ABEM
The ABEM mechanism can deal with flexibility and uncertainty in supply as well as demand and is also highly usable for bidders. It has two unique features: First, bids for binding commitments as well as for reserve capacity are combined into one bid, which signicantly reduces the complexity in finding well-working bids. Second, the bid species a quantitative relationship between binding commitments and reserve capacity./p pWe have evaluated ABEM from a bidder perspective in several publications (see below). A list of advantages of the ABEM mechanism is as follows:/p ul listrongintegration/strong: the same capacity can be offered in two markets (ahead of time and for balancing)/li listrongspeed/strong: bids can be computationally optimised fast/li listrongfair/strong: excessive market power is reduced/li listrongincentives/strong: flexible consumers have no drawback of offering flexibility/li listrongstable/strong against uncertainty about market outcomes/li /ul pCurrently, a reference implementation is built into our market framework a href=https://www.cwi.nl/market-gardenMarket Garden/a, as part of a href=http://www.aifb.kit.edu/web/HEGRIDthe Hegrid project/a. We are also extending a repertoire of reference bidding strategies to use in ABEM. We welcome the opportunity to use ABEM in cooperation with new partners, for instance in pilot projects or the simulation of interesting optimisation problems in smart grids./p h2References/h2 p[1] N. Höning and H. La Poutré, Integrating power and reserve trade in electricity networks, Proc. of the 10th International Conf on Autonomous Agents and Multiagent Systems (AAMAS), 2011/p p[2] N. Höning and H. La Poutré, Reduction of Market Power and Stabilisation of Outcomes in a Novel and Simplified Two-Settlement Electricity Market, In:nbsp; Proceedings of IEEE/WIC/ACM International Conference on Intelligent Agent Technology (IAT), 2012/p p[3] N. Höning and H. La Poutré, Flexible Consumers Reserving Electricity and Offering Profitable Downward Regulation, In: Proc. of the Third IEEE PES Conference On Innovative Smart Grid Technologies (ISGT), 2012/p p[4] N. Höning and H. La Poutré, a href=http://content.iospress.com/articles/multiagent-and-grid-systems/mgs00220An electricity market with fast bidding, planning and balancing in smart grids/a, Journal of Multiagent and Grid Systems,nbsp;vol. 10, no. 3, 2014/p
