Working Papers,
Copenhagen Business School, Department of Economics

Abstract: In recent years, European system operators have been more frequently needing to redispatch generation, load, or both, after the day-ahead market clearing to ensure that the final dispatch schedule does not violate any network limit. In this paper, we focus on the environmental impact of redispatch processes. We use hourly data from the Spanish market operator and transmission system operator between 2019-2021 to analyze the emissions introduced by redispatch processes. We find that while redispatch energy accounts for about 2-4% of total annual electricity demand, it contributes to about 6-11% of the annual power sector’s CO2 emissions. Upwards redispatch energy is nearly entirely provided by polluting power plants, while clean wind generation is by far the most downwards redispatched. We confirm that redispatch volumes increase when the share of intermittent renewables in the supply mix increases but, additionally, show that redispatch volumes also significantly increase during hours with low energy demand. The latter can indicate important inefficiencies in the integration of renewables in the power system, not only leading to higher costs but also emissions. Finally, we find that when considering the CO2 emissions from redispatch, the abated CO2 emissions resulting from marginally increasing renewable generation, substituting coal or gas in the day-ahead schedule, reduces by 0.7-4.5%. We offer several recommendations to reduce the need for redispatch actions and recommendations to make redispatch actions less polluting. A key point is the consideration of a specific ancillary service for voltage control.

Keywords: renewables; redispatching CO2 emissions; power markets; power system operations; ancillary services

JEL-codes: L51; L94; Q41; Q42

Language: English

31 pages, January 25, 2023

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