Helping emerging energy market players make the right calls
Europe's changing energy market is attracting new, smaller players that lack experience and know-how when it comes to negotiating commercial transactions. An EU-funded project has come up with a solution to help them make better decisions.
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The increased use of renewable energy sources is driving change in Europes energy markets. Recent years have seen the uptake of smart grids, which are networks that can automatically monitor energy flows and adjust to changes in supply and demand. In addition, the EU wants to develop a pan-European energy market, where providers freely compete and provide the best energy prices while helping Europe fully achieve its renewable energy potential.
As the traditional market model disappears, new players are entering the energy sector, including renewable energy providers and small-scale consumers. They want to participate directly in electricity market transactions but often lack the expertise to get the best deal for themselves and their customers.
Using the latest developments in artificial intelligence, the EU-funded ADAPT project has created a decision support system to help new players with their negotiations. Its system assists users as they plan their entry into the electricity market and with the actual negotiation process.
In the planning phase we are helping players to decide which market opportunities they wish to participate in and the volumes of energy they want to negotiate, says lead researcher Tiago Pinto, who carried out his work at the University of Salamanca, Spain. In the negotiation phase, ADAPT supports players as they deal with other organisations in the electricity market.
The planning component of the project consists of a model that identifies the most gainful negotiation opportunities considering the available markets, including those at smart grid level. Meanwhile, novel machine learning approaches are applied to support the negotiation process as users choose the most suitable strategies for each context.
These contexts refer to factors that influence negotiations such as volumes of renewables to be traded, expected market prices and the different organisations involved. The opponent players negotiation profiles are also factored into the system.
As well as giving users the confidence to improve their own outcomes, the ADAPT system promises to deliver other, wider benefits. For example, it supports the European Unions aim to integrate smart grids into the electricity market more effectively. And because it can help emerging green energy suppliers maximise their gains from the sale of power, ADAPT should also play a role in boosting the sustainability of renewable energy investments.
In addition, the system has the potential to increase competition in the market, which should in turn lead to a reduction in electricity prices.
An evolving sector
The ADAPT system is being tested using simulations that harness real data from several European electricity market operators. A large power provider, ENGIE, is involved in validating the results to ensure the projects models work in the market environment.
Moreover, the scientific results of the project which received funding from the EUs Marie Skłodowska-Curie actions programme promise to open up new paths for research. The new machine learning, optimisation and negotiation approaches proposed by ADAPT create a solid basis for further exploration of theoretical artificial intelligence models and their application to the evolving electricity market sector for example in the ongoing transition towards local energy markets, including peer-to-peer transactions, says Pinto.