Project Details
Projekt
Agent-based Inverse Analysis of Market Potentials for Carnot Batteries considering Uncertain Energy System Pathways (AIM for Carnot)
Applicant
Professor Dr. Wolf Fichtner
Subject Area
Operations Management and Computer Science for Business Administration
Term
since 2023
Project identifier
Deutsche Forschungsgemeinschaft (DFG) - Project number 526233915
This project aims at investigating promising CB configurations, the potential role of CBs in future energy systems, as well as economic incentives and barriers for a successful market entry. As technical CB development is still in progress, energy economics can provide an orientation towards promising directions. This motivates a novel inverse approach to investigate the role of CBs in future energy markets. Such an inverse approach is new to energy market modellers and brings challenges with it. Hence, we aim at depicting CBs in an agent-based market model depicting Germany and its neighbours to identify economically attractive technical configurations and their use in the system, to derive potential profit-risk structures for CBs as an investment option, and to assess inevitable techno-economic trade-offs from a market perspective. The major challenge consists of the adequate depiction of the market functioning through individual economic decisions. A working programme consisting of six working packages addresses this challenge and thereby deploys an agent-based electricity market simulation. Whereas optimization approaches usually identify desirable investment and dispatch decisions in a normative manner taking a central planner perspective, the agent-based approach is not dependent on generally assuming perfect foresight and perfect coordination. It is able to depict the market structure and market participants’ individual decisions. The key objectives of the project are threefold: On the one hand, the goal is to integrate the inverse engineering character into agent-based energy system modelling by modelling techno-economic characteristics as decision variables of the agents. This requires extensive methodological developments, both in the short- and in the long-term decision-making of agents. On the other hand, the technical representation of the CB’s characteristics requires model enhancements. Particularly the differentiation, interplay and potential profit cannibalization of competing flexibility options lead to challenges, as many degrees of freedom complicate convergence, if the techno-economic properties are very similar or agents face immanent uncertainties in their strategic decisions. The third objective is to develop a framework for assessing profit-risk structures of promising technical configurations, based on mean-reverting and path-dependent energy system uncertainties. Path-dependent uncertainties such as the development of new technologies or renewable capacity expansion require endogenous treatment in the simulation model. We propose extension of the existing agent-based model to derive, among others, dispatch curves for different CB configurations under varying market circumstances, as well as profit-risk structures for CBs from an individual market participant’s perspective.
DFG Programme
Priority Programmes
