Balancing Market actions by a broker

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Balancing Market actions by a broker

susobhang70
Hi,

I'm not able to get a clear picture as to what all a broker can voluntarily do to participate in the Balancing Market. The recent change stated that the simulation automatically places balancing orders in the Balancing Market for a broker from its Tariff Specifications involving up and down regulation (I classify this as an "involuntary" action). So, what are the voluntary actions that a broker can take to participate in the Balancing Market? For example, is there still any way a broker can place a valid balancing order that will make a difference? If yes, can you please elaborate?

Regards,
Susobhan
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Re: Balancing Market actions by a broker

grampajohn
Administrator
Hello, Susobhan -

susobhang70 wrote
I'm not able to get a clear picture as to what all a broker can voluntarily do to participate in the Balancing Market. The recent change stated that the simulation automatically places balancing orders in the Balancing Market for a broker from its Tariff Specifications involving up and down regulation (I classify this as an "involuntary" action). So, what are the voluntary actions that a broker can take to participate in the Balancing Market? For example, is there still any way a broker can place a valid balancing order that will make a difference? If yes, can you please elaborate?
The description is in Section 6 of the 2018 game specification, at the bottom of page 24. Basically, you have two options:

- If you offer a Tariff that includes a RegulationRate, then the customer knows what they will be paid for the exercise of their regulation capacity, and that payment is also used as the broker's bid against that tariff in the Balancing Market. Since the clearing price in the Balancing Market is always no worse (for the broker) than the bid price (a guarantee of the VCG mechanism), the customer is paid the promised amount and the broker always makes a non-negative profit if a balancing order is exercised.

- If you offer a Tariff without a RegulationRate that supports curtailment (for which isInterruptible() is true), then (a) the customer knows they may be curtailed, and (b) rather than being paid for curtailment, they may subscribe if the expected inconvenience of curtailment is less than the savings in the per-kWh rate. If a broker has subscriptions to such a tariff, then it always has two choices for how to take advantage of curtailment. The first is to issue EconomicControlEvent messages against the tariff to reduce (or increase, possible only for storage types) consumption in response to wholesale market prices or expected imbalance. The second is to issue a BalancingOrder against such a tariff, which acts as a standing bid allowing the Balancing Market to exercise curtailment against that tariff for the specified price.

Does this help?

John