Skip to Main content Skip to Navigation
Journal articles

The impact of a virtual power plant on the day-ahead market in France

Abstract : This paper studies the impact of virtual power plant (VPP) contracts on the French day-ahead market. Holders of VPPs have the right to access electric power at a predetermined strike price per MWh in 30-minute slices 24 hours per day, 7 days a week during the delivery period, after paying an upfront premium, which is fixed at the auction. So VPPs are call options. Recent work on market power in Nordic countries suggests that subtle mechanisms such as transfers from one time period to another may be involved, rather than short-run manipulations. To assess the effect VPPs have on market power we need to understand precisely how they function. In this paper we show that the structure of the market allows holders of VPPs to sell power on the exchange when the day-ahead price is above the VPP strike (if they do not need the power) and conversely to buy power when the price is below the strike. By documenting the strike prices of VPPs that were active at different times and by carefully examining the structure of day-ahead prices we demonstrate that they are doing this.
Document type :
Journal articles
Complete list of metadata
Contributor : Yann Ménière Connect in order to contact the contributor
Submitted on : Friday, December 21, 2012 - 6:16:03 PM
Last modification on : Wednesday, November 17, 2021 - 12:31:45 PM


  • HAL Id : hal-00768534, version 1


Margaret Armstrong, Alain Galli. The impact of a virtual power plant on the day-ahead market in France. The journal of energy markets, Infopro Digital, 2010, 3 (1), pp.53-71. ⟨hal-00768534⟩



Record views