Conference Agenda

The ambitious goals for the integration of renewable energy sources in modern energy systems in order to combat climate change implies that the electricity supply chain becomes increasingly reliant on energy sources that are inherently and, to a large extent, unpredictable and out of human control. Reserves are backup resources that are needed in order to ensure that the electricity system can operate reliably despite the significant uncertainty caused by the massive integration of renewable resources. In addition to trading energy and access to networks, electricity markets worldwide are evolving in order to improve their processes for procuring reserves. Among numerous engineering challenges that this objective raises, one can single out formidable computational challenges for optimizing the allocation of conventional generation capacity between the provision of energy and reserves, and ensuring the delivery of these reserves over networks. The institutional challenges are also important, since the economics of price formation in electricity markets are deeply affected by how reserves are compensated and the conventional roles of network operators and power exchange operators become increasingly intertwined. This presentation presents a brief overview of the organization of electricity markets and discusses the aforementioned engineering and institutional challenges, the state of play in the European energy market, as well as the potential welfare benefits and institutional implications of exploiting operations research in order to achieve a smoother coordination of conventional resources as “dancing partners” to renewable energy resources.