Day-Ahead Versus Intraday Valuation of Flexibility for Photovoltaic and Wind Power Systems

This paper takes the perspective of a photovoltaic (PV) or wind power plant operator who wants to optimally allocate demand-side flexibility to maximize realizable production value. We compare two allocation alternatives: (1) use of flexible loads to maximize relative day-ahead market value by shifting the portfolio balance in view of day-ahead prices; (2) use of flexible loads in intraday operations to minimize the costs incurred when balancing forecast errors. We argue that the second alternative yields a greater average value than the first in continuous-trade intraday markets. The argument is backed by a market data analysis for Germany in 2013.