The current limitations in electricity storage transform the electricity supply process into a product of complex balance and coordination, beyond just energy generation. Achieving the delicate equilibrium where every kilowatt-hour produced matches what is consumed is one of the biggest challenges for the electricity market. Within these constantly shifting dynamics, a system that instantaneously matches supply and demand is essential. This article focuses on this critical operation of the energy market, particularly the Intra-Day Market and the risks posed to hydroelectric power plants (HPPs).
1. Introduction: From Day-Ahead to Intraday – Dynamic Market Realities
Electricity markets, by their dynamic nature, are constantly changing. The delicate balance between energy production and consumption presents both opportunities and risks for market participants. This dynamism makes planning processes more complex, especially for weather-sensitive generation facilities like hydroelectric power plants (HPPs).
"I planned, but the rain stopped" scenario
As a run-of-river HPP operator (one without a dam), your production planning for the day-ahead market (DAM) relies heavily on the expected rainfall for the following day. However, forecasts can change, and the anticipated rain might not materialize. In such a scenario, you face the prospect of generating less energy than planned. Conversely, you might receive significantly more rainfall than expected, causing water levels to rise rapidly, leading to the potential or necessity to produce above your planned output. These types of scenarios result in deviations between your scheduled production in the DAM and your actual generation.Changes in demand throughout the day: how flexible can energy supply be?
Electricity demand fluctuates continuously throughout the day; it rises in the morning, reaches peaks in the afternoon and evening, and declines at night. These fluctuations require supply to adapt to demand with similar flexibility. However, not every generation facility can offer the same degree of flexibility. While HPPs can offer a certain flexibility depending on hydrological conditions, it can be difficult for them to adapt quickly to sudden and large-scale changes. Maintaining the supply-demand balance in the system necessitates the instantaneous management of flexible generation capacities.
Why is DAM alone not enough for HPPs?
The Day-Ahead Market (DAM) is the fundamental planning platform of the electricity market, aiming to balance the production and consumption plans of market participants one day in advance (EPDK). However, for power plants reliant on natural resources like hydroelectric power plants (HPPs), sudden changes in hydrological conditions (e.g., rainfall amounts, water levels) can render the forecasts made in the DAM obsolete within the same day. This creates imbalances between planned and actual production, and relying solely on the DAM can lead to both operational inefficiencies and financial costs. Academic studies show that this imbalance and forecast deviation can be 30% or more on average. Therefore, additional market mechanisms are needed to manage the uncertainties that arise during the day and to provide flexibility.