Energy transition: Digitalization and decarbonization

Mitigating the negative impacts of climate change requires bold actions within the energy sector: With 65% of global energy consumption originating from fossil resources, the energy sector substantially contributes to greenhouse gas emissions and hence, accelerates climate change. For that reason, we observe a transformation of the energy landscape from conventional to renewable generation all over the planet. But this change does not come easy as energy in general, and electricity in particular are very complex economic goods. Digitization, smart and information systems play a crucial role in this process.

Not only do smart and digital systems facilitate this transformation. They also change the way stakeholders interact with one another, resulting in a new understanding of energy as a commodity, service or good. For example, digitization and information systems allow us to get in immediate interaction with consumers, allowing us to understand their preferences at very low cost and hence, open up new business and economic opportunities.

Scientific Publications

Avci, E., Ketter, W., & Heck, E. V. (2018). Managing electricity price modeling risk via ensemble forecasting: The case of Turkey. Energy Policy, 123, 390-403. 

Naseri, N., Talari, S., Ketter, W. and Collins, J., 2022. Dynamic retail market tariff design for an electricity aggregator using reinforcement learning. Electric Power Systems Research, 212, p.108560.

Local energy markets

At the same time, due to the increasing granularity and decentralization of the energy supply (and demand) in many countries, bottom-up operation of energy systems for the future is crucial. Within this framework, concepts of controlling energy and power flows within power systems are described that use economic or market-based approaches. These approaches should enable an efficient, reliable and secure supply with (electric) energy and provide incentives for citizens to be active players.

Visions of local markets are enabled by the growing availability of intelligent devices and distributed computing resources. This distributed intelligence enables generation and demand to engage in peer-to-peer communication, building a network as opposed to the uni-directional characteristic of traditional power systems. Furthermore, using intelligent agents, actors in local markets (e.g. prosumers) can directly engage in peer-to-peer trading. This way, local supply and demand are more balanced and costly infrastructure expansions at higher grid levels can be avoided.

Due to the inherent decentralized characteristics of such operation, also using a decentralized market environment is conceivable. Distributed ledgers such as blockchain provide the technological foundation to design such a decentralized market. Energy tokenization and automated market makers (AMM) are among the solutions to facilitate such non-intermediary interaction among actors.    

Using such technologies and new concepts in energy domain is not without challenges, yet we are in the stage of addressing challenges and leveraging the advantages (e.g.  transparency, less transaction fees, security provision, and privacy preservation) to check their applicability in the real world.

Scientific Publications

Talari, S., Khorasany, M., Razzaghi, R., Ketter, W. and Gazafroudi, A.S., 2022. Mechanism design for decentralized peer-to-peer energy trading considering heterogeneous preferences. Sustainable Cities and Society, 87, p.104182

Bichler, M., Gupta, A., & Ketter, W. (2010). Research Commentary—Designing Smart Markets. Information Systems Research, 21(4), 688-699.

Felxibility resources

A cost-efficient energy system that is largely based on variable renewable energy sources not only requires an appropriate mix of different generation technologies. It should also the utilize dedicated flexibility resources. Flexibility is the ability of a system to maintain resilient in case of any rapid and large swings in the demand or supply. There is a different sources of  flexibility in energy system, ranging from supply to demand side measures. In supply side, energy storage technologies, and EVs have come to the center of attention. Storage would be useful with renewables, but it is often perceived somewhat optimistically as a generic solution to increasing flexibility, underestimating the scale in energy. in demand side, however, flexible loads are the main source of flexibility. Various demand response program with different pricing algorithm have been introduced so afar. We try, in our research, to integrate such emerging flexibility resources to the existing electricity markets and also in a smaller scale to develop a market-based approach to harness their potential within local markets.

Scientific Publications

Naseri, N., Ghiassi-Farrokhfal, Y., Ketter, W. and Collins, J., 2023. Understanding and managing the participation of batteries in reserve electricity markets. Decision Support Systems, 165, p.113895.