I see a few people complain about slide 4. It is not incorrect. Although G1 is underproducing, the whole system is in an excess of 15mwh because someone else, G2, has overproduced way more than G1 has underproduced. Now G1 did not go according to plan, producing 30 instead of 50 which they have already received money for. So they have to return the money for the missing 20, now at a price of 35 instead of 37.5. G1 actually makes a profit, not because they underproduced but because someone else, G2, overproduced way more than them. On the other hand for G2, it is overproducing 35 more energy, so they will receive money for this extra 35mwh, now at a price of 35 instead of 37.5 had they been more accurate in the day ahead market. So G2, although being paid, is actually losing. As for B1, it has agreed to reduce by 15, producing only 35 when it has already received money for 50mwh at a price of 37.5. so B1 has to pay back the money it got for the 15mwh it will curtail. But it will pay 35 , 15mwh instead of 37.5 x 15. So B1 gains! I hope this helps someone. You'll get this better if you look at the next slide closely
Slide 4/9 is incorrect. There are logical errors in the settlment procedure. The correct one is the following: G1 Receives 20*35= 700 Euro G2 pays 35*35=1225 Euro B1 receives 15*35= 525 Euro Considering Both DAM and BM the following is true: G1 receives from DAM 1875 but also receives 700 more from the BM, because the particiapant's deviation is opposite to the system's imbalance. Total Income: 2575 G2 receives from DAM 4500 but has to pay back 1225 Euro. Total income: 3275 B1 receives from DAM 7500 but also receives 525 more since it offered the required downward product.
As far as I understand.. G1 is paying as the schedule price to correct its deviation from the scheduled; though unintentionally it helps the grid, it is rewarded by deviation for free. G2 is receiving the balancing price for its production; since it contributes to grid surplus, it is punished with the difference (2.5 euro/MW) compared to what it can receive in the day-ahead market. B1(/G3) received the schedule price, which is higher, for the 15 MW, then is paying the balancing price, which is lower, for the same 15 MW, so it gets the difference (2.5 euro/MW) as a reward for helping the grid (here it produces nothing). Though it should always be the one who produces gets paid, for producers who reduce their generation this seems always to be a loss in revenue. If it is a conventional balancing generator, if the (schedule price - fuel cost) < 2.5 then it has a net gain. If it is a wind / solar balancing generator the scheduled revenue seems to be a pure opportunity cost?
I see a few people complain about slide 4. It is not incorrect. Although G1 is underproducing, the whole system is in an excess of 15mwh because someone else, G2, has overproduced way more than G1 has underproduced. Now G1 did not go according to plan, producing 30 instead of 50 which they have already received money for. So they have to return the money for the missing 20, now at a price of 35 instead of 37.5. G1 actually makes a profit, not because they underproduced but because someone else, G2, overproduced way more than them. On the other hand for G2, it is overproducing 35 more energy, so they will receive money for this extra 35mwh, now at a price of 35 instead of 37.5 had they been more accurate in the day ahead market. So G2, although being paid, is actually losing. As for B1, it has agreed to reduce by 15, producing only 35 when it has already received money for 50mwh at a price of 37.5. so B1 has to pay back the money it got for the 15mwh it will curtail. But it will pay 35 , 15mwh instead of 37.5 x 15. So B1 gains! I hope this helps someone.
You'll get this better if you look at the next slide closely
Slide 4/9 is incorrect. There are logical errors in the settlment procedure. The correct one is the following:
G1 Receives 20*35= 700 Euro
G2 pays 35*35=1225 Euro
B1 receives 15*35= 525 Euro
Considering Both DAM and BM the following is true:
G1 receives from DAM 1875 but also receives 700 more from the BM, because the particiapant's deviation is opposite to the system's imbalance. Total Income: 2575
G2 receives from DAM 4500 but has to pay back 1225 Euro. Total income: 3275
B1 receives from DAM 7500 but also receives 525 more since it offered the required downward product.
Slide 8 has both arithmetical and logical mistakes, please revisit
G1 and B1(/G3) should be receiving not paying?
G2 is overproducing in a negative P balance to should be paying?
Otherwise the balancer is paying!
As far as I understand..
G1 is paying as the schedule price to correct its deviation from the scheduled; though unintentionally it helps the grid, it is rewarded by deviation for free. G2 is receiving the balancing price for its production; since it contributes to grid surplus, it is punished with the difference (2.5 euro/MW) compared to what it can receive in the day-ahead market. B1(/G3) received the schedule price, which is higher, for the 15 MW, then is paying the balancing price, which is lower, for the same 15 MW, so it gets the difference (2.5 euro/MW) as a reward for helping the grid (here it produces nothing).
Though it should always be the one who produces gets paid, for producers who reduce their generation this seems always to be a loss in revenue. If it is a conventional balancing generator, if the (schedule price - fuel cost) < 2.5 then it has a net gain. If it is a wind / solar balancing generator the scheduled revenue seems to be a pure opportunity cost?