Market Models

MarjoleinSchwachofer edited this page Aug 3, 2016 · 27 revisions

Table of Contents

Introduction

As the technologies and the associated networks in a local energy solution change, so too will the business cases for the different stakeholders. These business cases will very likely determine the willingness of stakeholders to participate in a specific solution and thus determine its success. In addition to modelling the technical details of a local energy solution, ETMoses has the capability to define financial relations between the different stakeholders. These financial relations constitute a so-called market model. Based on the technical properties of a LES and the market model, the business case for each stakeholder is calculated. The business cases are described in a separate section.

Market models

You can create a new market model or open an existing one from the Market Models menu. The image below shows the simplest market model possible, consisting of just one financial relation. Users can add as many relations to the market model as they want. In the sections below, the properties of these relations are described.

Simple market model as defined in ETMoses

Attributes

Each node in the topology of a local energy solution can be assigned to a stakeholder (see topologies for details). If a node is assigned to a stakeholder, several properties – such as the instantaneous load, the annual consumed electricity or the number of connections – can be measured. These properties form the basis for a financial transaction between two stakeholders. The measures and tariffs are described in more detail in separate sections. All financial relations combined form the market model. The results are displayed in the main page of your LES (see business cases for more details) and are recalculated every time you change your LES.

  1. Payer: the stakeholder that has to pay the payee as a result of the measure

  2. Payee: the stakeholder that receives payment from the payer as a result of the measure

  3. Measure: the result of this measure determines how much the payer has to pay the payee. ETMoses contains several pre-defined measures, e.g. kWh of electricity consumed, number of gas connections or flexibility realised; more details on these measures can be found in the measures section below.

  4. Applied to stakeholder: each node in a local energy solution belongs to a stakeholder. The applied to stakeholder attribute allows you to select to which stakeholder, and thus the associated node, this measure is applied. More than one node can be assigned to a stakeholder; in that case the measure will return the sum of the results of that measure for all these nodes. The selected stakeholder does not necessarily have to be the same as the payer or payee.

  5. Tariff: ETMoses contains three different tariffs: a fixed tariff, a user-defined price curve or the merit order price curve as calculated for your local scenario in the Energy Transition Model (see the tariffs section for more details).

Measures

  1. Annual maximum kW load: ETMoses determines the maximum load exerted on the network by the stakeholder in kW; this measure only works with a fixed price, which should be interpreted as the price per kW.
  2. Flexibility potential: flexibility is defined as the difference in load on the network without and with strategies applied. Flexibility occurs when the load with strategies is closer to zero than when the strategies are disabled. The flexibility potential is defined as the average value of this difference throughout. If you use this measure, a price will be assigned to this potential, which does not necessarily mean that this flexibility has to be realised. The assigned price should be interpreted as a price per kWh and can be fixed, follow a price curve or follow the merit order price.
  3. Flexibility realised: flexibility is defined as the difference in load on the network without and with strategies applied. Flexibility occurs when the load with strategies is closer to zero than when the strategies are disabled. The assigned price should be interpreted as a price for this realised flexibility per kWh and can be fixed, follow a price curve or follow the merit order price.
  4. Instantaneous load: ETMoses determines the instantaneous electricity load on the network caused by the stakeholder and assigns a price to this load at every time-step. This price can be fixed, or follow a (merit order) price curve.
  5. kWh of electricity consumed: assign a price to the electricity consumption.
  6. kWh of electricity produced: assign a price to the electricity production.
  7. kWh of gas consumed: ETMoses determines the gas consumption at the node(s) belonging to the stakeholder. You can assign a price per kWh, either fixed or following a (electricity merit order or other) price curve. Note that is a price per kWh, not cubic meters, so tariffs need to be adjusted for this compared to a normal gas tariff on your bill.
  8. kWh of gas produced: ETMoses determines the gas production at the node(s) belonging to the stakeholder. You can assign a price per kWh, either fixed or following a (electricity merit order or other) price curve. Note that is a price per kWh, not cubic meters, so tariffs need to be adjusted for this compared to a normal gas tariff.
  9. kWh of heat consumed: ETMoses determines the heat consumption at the node(s) belonging to the stakeholder. You can assign a price per kWh, either fixed or following a (electricity merit) price curve.
  10. Monthly maximum kW load: ETMoses determines the maximum load exerted on the network for each month. You can assign fixed price per kW to this load.
  11. Number of electricity connections1: assign a price for the number of electricity connections at the node(s) corresponding to the stakeholder (this measure only works with a fixed price).
  12. Number of gas connections1: assign a price for the number of gas connections at the node(s) corresponding to the stakeholder (this measure only works with a fixed price).
  13. Number of heat connections1: assign a price for the number of heat connections at the node(s) corresponding to the stakeholder (this measure only works with a fixed price).

1 See here for details on how the number of electricity, gas and heat connections is determined from the topology and the connected technologies.

The system operators charge their customers for their electricity and gas connection and transport. More information on the different network tariffs and values can be found on the website of the regional network operator. Real-life values can for example be found on the Liander website (in Dutch), where Stroom means electricity. For small consumers (max. 3x80A) connection, transport and measuring charges are included in one fixed capacity tariff, which can be implemented in ETMoses by measure 11 and 12. The amount depends on the connection capacity. For consumers with larger connections, the connections and transport charges are separate tariffs; another party can be responsible for measuring. The connection charge, and the fixed transport charge (vastrecht) can be best implemented by measures 11 and 12. The kWmax aspect of the transport tariff can best be modelled by measure 10. The contracted maximum value of the transport tariff is more difficult, it can probably be implemented best by measure 1 or 11.

Tariffs

It is possible to select one of three tariffs for each financial relation in the market model. These three tariffs are:

  1. Fixed-rate: a user-defined fixed rate assigned to the measure.

  2. Price curve: a time dependent price curve is assigned to the measure. These price curves or financial profiles are described in detail in the profiles page of this Wiki.

  3. Merit price: the merit order price is calculated based on the electricity producers that were transferred from the local energy scenario in ETM to the LES. If the electricity consumption or production changes, the merit order is re-run to determine the price per kWh on a 15 minute basis. Note that when you have created a local energy solution from a scaled scenario that does not include the energy sector, selecting the merit price will not give meaningful results as the merit order is not available. Also note that when this tariff is used for the gas consumption/production or heat consumption in kWh, still the electricity merit order is used.

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