Recent rises in the price of electrical energy have drawn incredible attention to Italian Electricity Markets. These marketplaces have experienced drastic changes in past years, mainly driven by the desire to transition to a more sustainable and green economy, which entailed the growing diffusion of power plants fueled by non-programmable Renewable Energy Sources. Indeed, these units are able to produce much cheaper and cleaner energy than traditional CCGT power plants but are causing a sharp increase in the measures required for the regulation of the Power System, with balancing resources that have to be procured by Terna, the Italian Transmission System Operator (TSO), on the Ancillary Services Market (MSD).
My Master’s thesis has the aim to provide a wide-ranging analysis of MSD, thanks to a thorough study of the offer profiles submitted by the Production Units operating in Northern Italy. The obtained results combine the technical knowledge of the departments of Energy and Mathematics of Politecnico di Milano and the practical experience on electricity markets of the Research Institute RSE, which supported the initial portion of the work.
The work is focused on the specific service denoted as “GR1” on MSD ex-ante, considering bids of both upward and downward types. These offers will be interpreted on the basis of many predictors, including both endogenous and exogenous data to the electricity markets. My findings confirmed the intricacy of the market MSD and showed how different operators tend to manage their power plants in various
ways, with disparate degrees of both variability and effectiveness of the submitted bids.