Independent thesis Advanced level (degree of Master (Two Years)), 20 credits / 30 HE credits
The liberalization process of the electricity industry in many countries leads to new rules and new challenges for the grid management. System reliability is a major concern, mainly because of (a) the high level penetration of renewable energy sources and (b) the growing peak load and environmental regulations
In most electricity markets, peak resources operate only during a short period, and at a high operating cost, jeopardizing their return on investment, while low-cost base resources make the most revenues on the market. Forward capacity markets, introduced by American operators such as PJM and ISO New England in 2007, aim at coping with this issue by providing the necessary financial incentives towards enough generation investments to meet future electricity needs. Since its first auction 4 years ago, the mechanism has proven to attract and retain competitive capacity on the market. The key characteristics are a single buyer structure, a fair pricing mechanism and a long term commitment from the TSO.
But the development of such market is not meant to be constrained to American countries. In Europe, the so-called law NOME (New Organization of the Electricity Market) has been adopted in France in November 2010, representing a new step in establishing a fair, transparent and efficient energy market in France. It enforces market participants and operator to design a fair and transparent mechanism for long-term capacity procurement.
This thesis introduces regulatory requirements from European countries which are in the process of designing forward capacity markets. These requirements are then compared to the mechanism brought in by PJM. Based on these specifications an adaptation of this mechanism to France is done, and a mathematical program simulating a forward capacity market is built using the software Aimms. Computational simulations are then led, based on a realistic dataset representing the French electricity market.
The fairness, competitiveness and transparency of the proposed mechanism is afterwards demonstrated based on the analysis of simulations.
2012. , 85 p.
R. Hesamzadeh, Mohammad, Assistant professor