Main Drivers for the Iberian Market Price And Energy Storage in Portugal

Sustainable Energy Systems Main Drivers for the Iberian Market Price And Energy Storage in Portugal Gonçalo Pereira Susana Vieira Carlos Silva OR 2012, Hannover, Germany, 5/9/2012, contact: goncalo.duarte.pereira@ist.utl.pt

Overview Objective Methodology Introduction Portuguese Electric System (PES) Data collection Feature selection (mutual information - mrmr) Methodology Results Portuguese Market Price (PT Price) Energy Storage (Storage) Discussion Future work References and acknowledgments Main Drivers for the Iberian Market Price and Energy Storage in Portugal 2

Objective This work proposes to evaluate what production sources influence: The Portuguese market price; The energy storage charge phase. Proposed methodology: Determine the most relevant features by applying a feature selection based algorithm; Analyze the achieved results. Main Drivers for the Iberian Market Price and Energy Storage in Portugal 3

Introduction The Portuguese Electric System (PES) Composed by two types of production schemes: I. Normal Generation comprised by Coal, Fuel Oil, Natural Gas, Reservoirs and Run-of-River; II. Special Status Generation (SSG). Feed in tariff incentivized production comprised by SSG Hydro, SSG Thermal, SSG Wind and SSG Photovoltaic Energy storage is achieved using reversible hydro dams; Together with Spain, constitutes the Iberian Market; In 2010, peak demand was around 10 GW, total production was 50 TWh and 55% of all the energy supplied originated from renewable sources. Main Drivers for the Iberian Market Price and Energy Storage in Portugal 4

Introduction Main Drivers for the Iberian Market Price and Energy Storage in Portugal 5

Introduction Main Drivers for the Iberian Market Price and Energy Storage in Portugal 6

Introduction Data collection One hour time step data from 2007 to 2010; Total of 18 features composed by: I. Production from electricity generation technologies from the PES; II. Iberian market information like the transacted prices and volumes from both Portuguese and Spanish markets; III. Other inputs like the 24 hour time vector, storage demand, overall PES demand, Imports and Exports to the Spanish Electric System; The Portuguese Market Price and Storage are the variables considered as outputs. Main Drivers for the Iberian Market Price and Energy Storage in Portugal 7

Introduction Feature Selection I(X;Y) is the mutual information of variables X and Y. p(x,y) is the joint probability distribution function of X and Y. p(x) and p(y) are the marginal probability distribution functions of X and Y. Method in which is possible to choose a subset of features (or inputs) relevant to a particular application (or output) - redundant or irrelevant inputs are removed; The selected method is mutual information using the criteria of minimum redundancy and maximum relevance (mrmr). Main Drivers for the Iberian Market Price and Energy Storage in Portugal 8

Methodology The methodology can be divided into three different approaches: 1. Consider each year separately from 2007 to 2010. Apply the feature selection; Extract the relevant features. 2. Considered as input data the whole set of years from 2007 to 2010. Apply the feature selection; Extract the relevant features. 3. Randomly select the initial and final point of the inputs and outputs from the whole data set (2007 to 2010). Apply the feature selection restraining the number of features; Extract the relevant features; Repeat to ensure a statistically representative result. Main Drivers for the Iberian Market Price and Energy Storage in Portugal 9

Results: Portuguese Market Price First and Second approach (Re)iteration Main Drivers for the Iberian Market Price and Energy Storage in Portugal 10

Results: Portuguese Market Price Third approach Main Drivers for the Iberian Market Price and Energy Storage in Portugal 11

Discussion: Portuguese Market Price Portuguese market price The main drivers for the Portuguese market price are the Natural Gas, Coal and the Demand. Natural Gas power stations act as grid regulators and as a medium/fast backup to the grid - only produce electricity if the market price is high. Coal strategy is to maintain an idle state of production to avoid the lengthy start-up period. They exercise market power by doing a price dump on the electricity price to avoid shutting down the power plant. Demand obeys to the same rules as a competitive market, e.g., large generation and low demand leads to a low Portuguese market price. Main Drivers for the Iberian Market Price and Energy Storage in Portugal 12

Results: Storage First and Second approach Third approach Main Drivers for the Iberian Market Price and Energy Storage in Portugal 13

Discussion: Storage Energy Storage The main drivers for energy storage are the Reservoirs, Wind production, Portuguese transacted volumes (PT Volumes) and the time of day (Hour24). The Reservoirs are a predictable results since the energy storage works via pump storage reservoirs. Wind, an intermittent and variable production source, when there is an excess in production the storage is activated. Portuguese transacted volumes are representative of the Iberian market dynamics. Time of the day is a proxy for the Demand since they have similar dynamics. Main Drivers for the Iberian Market Price and Energy Storage in Portugal 14

Future work I. Simulate the market price and energy storage decision using the selected features using neural networks; II. Evaluate results and integrate the trained neural networks in a simulation model. Main Drivers for the Iberian Market Price and Energy Storage in Portugal 15

References and acknowledgments 1. OECD ilibrary - IEA Renewable Information Statistics. http://www.oecdilibrary.org/energy/data/iea-renewables-information-statistics_renewabdata-en Cited 1 June 2012 2. Iberian Energy Derivative Exchange: Spot Prices and Volume data. http://www.omip.pt/omip/tabid/62/language/en-gb/default.aspx Cited 20 June 2012 3. Peng, H.,Long,F., Long, C.: Feature Selection Based on Mutual Information: Criteria of Max- Dependency, Max-Relevance, and Min-Redundancy. IEE Transactions on Pattern Analysis and Machine Intelligence. 27/8, 1226 1238 (August 2005) doi: 10.1109/TPAMI.2005.159 4. Rede Electrica Nacional (REN): Information Center, Daily Statistics - Diagram. http://www.centrodeinformacao.ren.pt/en/informacaoexploracao/pages/estatisticadiaria Diagrama.aspx Cited 20 June 2012 This work is supported by the Portuguese Government under the programs: Programa de financiamento Plurianual das Unidades de I&D da FCT (POCTI-SFA-10-46-IDMEC), and by the FCT grants SFRH/BD/51400/2011 and SFRH/BPD/65215/2009, Fundação para a Ciência e a Tecnologia (FCT), Ministério do Ensino Superior, da Ciência e da Tecnologia, Portugal. Main Drivers for the Iberian Market Price and Energy Storage in Portugal 16