Special session on proposal of a new European co-optimized energy and ancillary service market design - part I - concept

A new market design is proposed which employs a joint day-ahead (DAM) trading platform for energy and security reserves. Its main purpose is to address the growing difficulties in the procurement of European ancillary services. This paper is the first part of the resulting research project's synthesis. The concept of co-optimization is described, followed by a proposal of a co-optimized power exchange (PX) complying with the European sequential energy and control reserve procurement. Co-optimization refers to that reserves are procured and priced jointly with the energy by a single market clearing algorithm. The novelty of our concept is that it enables concurrent reserve capacity procurement and the market coupling of PXs via implicit auction, without using centralized unit-commitment. The developed algorithm, its implementation and case studies are presented in the companion paper.