Impact of minimum bid requirement of Japan's electricity market on virtual power plant's profit
In the context of small-scale virtual power plants (VPPs), the minimum power requirement (MPR) poses a significant challenge for market participation due to the inherent volatility and uncertainty associated with renewable energy sources. To mitigate this, a VPP system can potentially enhance its pr...
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| Language: | English |
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Elsevier
2025-01-01
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| Series: | Heliyon |
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| Online Access: | http://www.sciencedirect.com/science/article/pii/S2405844025004475 |
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| author | Reza Nadimi Masahito Takahashi Koji Tokimatsu Mika Goto |
| author_facet | Reza Nadimi Masahito Takahashi Koji Tokimatsu Mika Goto |
| author_sort | Reza Nadimi |
| collection | DOAJ |
| description | In the context of small-scale virtual power plants (VPPs), the minimum power requirement (MPR) poses a significant challenge for market participation due to the inherent volatility and uncertainty associated with renewable energy sources. To mitigate this, a VPP system can potentially enhance its profitability by utilizing an Internal MPR, which is a value derived from market prices and historical data, including actual and forecasted renewable power generation, and is typically lower than the market MPR. This study investigates several market strategies, designated as Plans II, III, and V, under hypothetical conditions, and evaluates their impact on the profitability of VPPs relative to existing strategies (Plans I and IV) within the Japan Electric Power eXchange (JEPX) market. Currently, the MPR for day-ahead (DA) and intraday (ID) markets is set at 0.1 MW per settlement period. This research involves the simulation of all five plans across 11 small-scale VPP systems, with capacities ranging from 0.05 MW to 1 MW. The simulation results indicate that reducing the market MPR to 0.04 MW for both DA and ID markets results in increased profitability for VPPs. The findings of this study suggest potential policy implications for Japan's power market, emphasizing the benefits of adjusting MPR thresholds to better accommodate the participation of small-scale VPPs and enhance overall market efficiency. |
| format | Article |
| id | doaj-art-c703e445613048e4a2bac46f4d53138a |
| institution | Kabale University |
| issn | 2405-8440 |
| language | English |
| publishDate | 2025-01-01 |
| publisher | Elsevier |
| record_format | Article |
| series | Heliyon |
| spelling | doaj-art-c703e445613048e4a2bac46f4d53138a2025-02-02T05:28:55ZengElsevierHeliyon2405-84402025-01-01112e42067Impact of minimum bid requirement of Japan's electricity market on virtual power plant's profitReza Nadimi0Masahito Takahashi1Koji Tokimatsu2Mika Goto3Department of Innovation Science, School of Environment and Society, Tokyo Institute of Technology, 3-3-6, Shibaura, Minato-ku, Tokyo, 108-0023, Japan; Corresponding author.Central Research Institute of Electric Power Industry, Ōtemachi, Tokyo, 100-8126, JapanDepartment of Transdisciplinary Science and Engineering, School of Environment and Society, Tokyo Institute of Technology, 4259 Nagatsuta-cho, Midori-ku, Yokohama, 226-8503, JapanDepartment of Innovation Science, School of Environment and Society, Tokyo Institute of Technology, 3-3-6, Shibaura, Minato-ku, Tokyo, 108-0023, JapanIn the context of small-scale virtual power plants (VPPs), the minimum power requirement (MPR) poses a significant challenge for market participation due to the inherent volatility and uncertainty associated with renewable energy sources. To mitigate this, a VPP system can potentially enhance its profitability by utilizing an Internal MPR, which is a value derived from market prices and historical data, including actual and forecasted renewable power generation, and is typically lower than the market MPR. This study investigates several market strategies, designated as Plans II, III, and V, under hypothetical conditions, and evaluates their impact on the profitability of VPPs relative to existing strategies (Plans I and IV) within the Japan Electric Power eXchange (JEPX) market. Currently, the MPR for day-ahead (DA) and intraday (ID) markets is set at 0.1 MW per settlement period. This research involves the simulation of all five plans across 11 small-scale VPP systems, with capacities ranging from 0.05 MW to 1 MW. The simulation results indicate that reducing the market MPR to 0.04 MW for both DA and ID markets results in increased profitability for VPPs. The findings of this study suggest potential policy implications for Japan's power market, emphasizing the benefits of adjusting MPR thresholds to better accommodate the participation of small-scale VPPs and enhance overall market efficiency.http://www.sciencedirect.com/science/article/pii/S2405844025004475Virtual power plantSimulation-based optimizationShort-term power marketPower market design options |
| spellingShingle | Reza Nadimi Masahito Takahashi Koji Tokimatsu Mika Goto Impact of minimum bid requirement of Japan's electricity market on virtual power plant's profit Heliyon Virtual power plant Simulation-based optimization Short-term power market Power market design options |
| title | Impact of minimum bid requirement of Japan's electricity market on virtual power plant's profit |
| title_full | Impact of minimum bid requirement of Japan's electricity market on virtual power plant's profit |
| title_fullStr | Impact of minimum bid requirement of Japan's electricity market on virtual power plant's profit |
| title_full_unstemmed | Impact of minimum bid requirement of Japan's electricity market on virtual power plant's profit |
| title_short | Impact of minimum bid requirement of Japan's electricity market on virtual power plant's profit |
| title_sort | impact of minimum bid requirement of japan s electricity market on virtual power plant s profit |
| topic | Virtual power plant Simulation-based optimization Short-term power market Power market design options |
| url | http://www.sciencedirect.com/science/article/pii/S2405844025004475 |
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