summary of work in conclusion and minor changes to other chapters

source/10_lit_review.md

@@ -277,4 +277,4 @@ Though developing this understanding is a significant undertaking in and of itse
 
 Policy-makers must confront and account for these complexities to design the flexible operational practices required to effectively and efficiently operate complex power systems and electricity markets undergoing a transition to renewable energy. Whilst the literature has identified high-level design outcomes and the design areas that deserve the most attention, there is, as @maysMissingIncentivesFlexibility2021 indicates, a role for empirical work that identifies "second-best" design solutions given the specific context of each power system and jurisdiction. This approach to the design problem recognises that purpose-fit balancing practices arise not from "optimal" settings, but from solutions that combine and compromise.
 
-With the need for robust design decisions supported by context-specific analysis, the work in [Chapters @sec:fcs; Chapters @sec:reserves] and [-@sec:info] contributes to the field of power system operational practice design by providing recommendations to system operators, market designers and energy system policy-makers based on detailed empirical studies and models of facets of the Australian National Electricity Market. Whilst some of the recommendations in these chapters may be unsuitable for other jurisdictions, the work in this thesis also contributes to the broader literature by serving as an example for policy-makers elsewhere of how to approach "second-best" and context-specific design when assessing which practices are best to successfully balance electricity markets in operational timeframes with increasing penetrations of variable renewable energy.
+With the need for robust design decisions supported by context-specific analysis, the work in [Chapters @sec:fcs; Chapters @sec:reserves] and [-@sec:info] contributes to the field of power system operational practice design by providing recommendations to system operators, market designers and energy system policy-makers based on models and detailed empirical studies of facets of the Australian National Electricity Market. Whilst some of the recommendations in these chapters may be unsuitable for other jurisdictions, the work in this thesis also contributes to the broader literature by serving as an example for policy-makers elsewhere of how to approach "second-best" and context-specific design when assessing which practices are best to successfully balance electricity markets in operational timeframes with increasing penetrations of variable renewable energy.

source/11_research_framework.md

@@ -24,7 +24,7 @@ Frequency control services are a significant component of a system operator's ba
 
 > _To better understand how the **capabilities** and **deployability** of balancing flexibility in scheduling timeframes are changing during energy transition, and whether these changes impact the suitability of more decentralised operational balancing practices._
 
-In wholesale electricity markets, market participation decisions determine the type and quantity of balancing flexibility available within scheduling timeframes. There is a role for empirical studies examining whether decentralised operational balancing practices, such as markets, are purpose-fit to deliver the balancing flexibility requirements of electricity markets in transition – particularly given that new markets for flexibility (e.g. reserve product markets) can introduce additional costs, constraints and complexity and even encroach upon the functions of existing operational practices. [Chapter @sec:reserves] focuses on understanding the balancing flexibility **capabilities** available in scheduling timeframes both now and into the near future, and using this knowledge to inform market design. In this chapter, I offer a practical method for quantifying the time-varying spectrum of upwards and downwards balancing flexibility capabilities, and then use this method to assess historical and projected resource mixes in two regions of the Australian National Electricity Market. The results from my analysis suggest that with higher penetrations of renewable energy: 1) downwards flexibility margins can be exhausted around noon if wind and solar are unable or unwilling to provide it, 2) upwards flexibility becomes more scarce during morning and evening peak demand events and 3) a greater portion of upwards flexibility is provided by energy-limited resources. Using these findings, I examine and compare the suitability of various flexibility design options, with a particular focus on assessing the need for an additional reserve product market. I finally recommend that policy-makers examine how existing operational practices can be augmented to elicit upwards flexibility provision, and that duration specifications and sustained footroom procurement be considered for reserve products.
+In wholesale electricity markets, market participation decisions determine the type and quantity of balancing flexibility available within scheduling timeframes. There is a role for empirical studies examining whether decentralised operational balancing practices, such as markets for services and products, are purpose-fit to deliver the balancing flexibility requirements of electricity markets in transition – particularly given that new markets for flexibility (e.g. reserve product markets) can introduce additional costs, constraints and complexity, and even encroach upon the functions of existing operational practices. [Chapter @sec:reserves] focuses on understanding balancing flexibility **capabilities** in scheduling timeframes both now and into the near future, and using this knowledge to inform market design. In this chapter, I offer a practical method for quantifying the time-varying spectrum of upwards and downwards balancing flexibility capabilities, and then use this method to assess historical and projected resource mixes in two regions of the Australian National Electricity Market. The results from my analysis suggest that with higher penetrations of renewable energy: 1) downwards flexibility margins can be exhausted around noon if wind and solar are unable or unwilling to provide it, 2) upwards flexibility becomes more scarce during morning and evening peak demand events and 3) a greater portion of upwards flexibility is provided by energy-limited resources. Using these findings, I examine and compare the suitability of various flexibility design options, with a particular focus on assessing the need for an additional reserve product market. I recommend that policy-makers examine how existing operational practices can be augmented to elicit upwards flexibility provision, and that duration specifications and sustained footroom procurement be considered for reserve products.
 
 Simply quantifying capabilities, however, is insufficient if market participants are unable or unwilling to offer them into the wholesale spot market. Market participation decisions and thus resource schedules are informed by knowledge processes, which provide current and forecasted power system and market information. As such these knowledge processes and, more broadly, market participation rules must be purpose-fit to enable resource scheduling that leads to effective and efficient system balancing. [Chapter @sec:info] explores how market information and market participant operational strategies impact the **deployability** of balancing flexibility from energy-limited storage resources, which are expected to aid in balancing electricity markets with high penetrations of variable renewable energy through energy arbitrage. In this chapter, I focus on the scheduling coordination role of centralised price forecasts generated by the system and market operator in Australian National Electricity Market. I highlight the increasing frequency and severity of errors in these price forecasts, and propose a hypothesis that market participant (re)bidding is partially responsible for this phenomenon. I then model the extent to which arbitrage revenues might be reduced (compared to perfect foresight operation) should these forecasts guide battery energy storage scheduling. Based on the findings from these analyses, I discuss potential changes to market participant scheduling strategies and market design that could improve scheduling outcomes. I recommend that Australian policy-makers not only increase the frequency at which centralised knowledge processes are run, but also consider whether stricter market participation restrictions might incentivise participant bidding strategies that are less likely to induce sudden price forecast swings that can hamper effective scheduling.
 

source/14_information.md

@@ -1,4 +1,4 @@
-# The scheduling role of future pricing information in electricity markets with rising deployments of renewables and energy storage: an Australian National Electricity Market case study {#sec:info}
+# The scheduling role of future pricing information in electricity markets with rising deployments of renewables and energy storage: a National Electricity Market case study {#sec:info}
 
 ## Link to thesis
 

source/15_conclusion.md

@@ -1,14 +1,53 @@
-# Conclusion {.unumbered#sec:conclusion}
+# Conclusion {#sec:conclusion}
 
-## Thesis summary
+Prompted by rising deployments of VRE, policy-makers are contemplating redesigning operational practices in their jurisdictions to deliver more effective and efficient balancing in decarbonising power systems and electricity markets. Given the challenges and complexities of the design problem, these outcomes require flexible, "second-best" and context-specific solutions.
 
-In summary, pellentesque habitant morbi tristique senectus et netus et malesuada fames ac turpis egestas. Nunc eleifend, ex a luctus porttitor, felis ex suscipit tellus, ut sollicitudin sapien purus in libero. Nulla blandit eget urna vel tempus. Praesent fringilla dui sapien, sit amet egestas leo sollicitudin at.
+This thesis aims to address the following research question:
 
-## Future work
+> Given existing design challenges and increasing penetrations of variable renewable energy resources as energy transition proceeds, how should we design or, at the very least, approach the design of operational practices for balancing electricity markets?
 
-There are several potential directions for extending this thesis. Lorem ipsum dolor sit amet, consectetur adipiscing elit. Aliquam gravida ipsum at tempor tincidunt. Aliquam ligula nisl, blandit et dui eu, eleifend tempus nibh. Nullam eleifend sapien eget ante hendrerit commodo. Pellentesque pharetra erat sit amet dapibus scelerisque.
+The broad scope of this research question was narrowed through two research objectives (see below), which were investigated through models and detailed empirical studies of facets of the Australian National Electricity Market. In this chapter, I first summarise the main findings of the research within this thesis according to the research objective they address. Specifically, [@sec:conclusion-ro1] summarises insights from [Chapter @sec:fcs] that address Research Objective 1, and [@sec:conclusion-ro2] summarises the main findings from [Chapter @sec:reserves] and [Chapter @sec:info], which together address Research Objective 2. I then highlight potential opportunities for future work in [@sec:conclusion-future_work]. Finally, I provide brief closing remarks in [@sec:conclusion-closing_remarks].
 
-Vestibulum suscipit tellus risus, faucibus vulputate orci lobortis eget. Nunc varius sem nisi. Nunc tempor magna sapien, euismod blandit elit pharetra sed. In dapibus magna convallis lectus sodales, a consequat sem euismod. Curabitur in interdum purus. Integer ultrices laoreet aliquet. Nulla vel dapibus urna. Nunc efficitur erat ac nisi auctor sodales.
+## Research Objective 1 {#sec:conclusion-ro1}
+
+> **RO1**: To determine what features are needed in centrally-coordinated arrangements for procuring frequency control services during energy transition.
+
+Frequency control services are a significant component of a system operator's balancing toolkit and are critical to ensuring that imbalances are quickly addressed. The design of frequency control arrangements in restructured electricity industries will need to be revisited as resource mixes, network topologies and broader market arrangements and policy settings change with growing penetrations of variable renewable energy resources.
+
+Based on the review of North American and European frequency control arrangements and the analysis of the NEM's presented in [Chapter @sec:fcs], I offer four insights consisting of desirable features and design principles for policy-makers revisiting their jurisdiction's frequency control arrangements during energy transition:
+
+1. Control deficiencies may not be addressable through introducing new frequency control services. While this solution may address emerging needs, such as low-inertia operation, policy-makers need to better understand the interdependency, interoperability and interchangeability between frequency control services and the interactions with other technical attributes of the power system (e.g. system strength) to ensure that frequency control is first and foremost effective. Once this has been achieved, the short-run efficiency of arrangements can be improved through mechanisms such as dynamic and probabilistic dimensioning and co-optimising the procurement of interchangeable frequency control services.
+
+2. A dynamically efficient outcome in some power systems may require additional investments in capability. Prices for frequency control services can be strengthened through scarcity pricing, which may better reflect the system's preference for security and reliability. Such pricing mechanisms are complementary to appropriate and efficient cost-allocation based on causation or needs. Both efficient price formation and cost-allocation will improve the potential for frequency control services derivatives, which may assist in providing price signals for investment.
+
+3. System operators should systematically and frequently verify frequency control service delivery, where relevant, and withhold or penalise remuneration when delivery is deemed to be insufficient. If such monitoring is in place, remuneration can be performance-based to drive the provision of high quality frequency control services. Performance monitoring would also enable the system operator to assess frequency control arrangements and identify any deficiencies in control action or procurement.
+
+4. During energy transition, a suitable set of frequency control arrangements will most likely involve a combination of market-based and regulatory mechanisms. Frequency control is a power system public good and achieving frequency stability requires a degree of coordination and cooperation between resources. These characteristics make it difficult to establish complete markets for frequency control services, and an emphasis on market solutions may obscure these characteristics to market participants and undermine effective control. In contrast, regulatory mechanisms may prove to be more robust and resilient in the face of uncertainties, particularly those that are exogenous to the power system (e.g. climate risk). Regardless of whether arrangements are skewed towards market-based mechanisms or regulatory mechanisms, designers should be more forward-looking and avoid assumptions regarding the provision of frequency control capabilities over time, particularly when there is a pervasive competition norm and effective frequency control relies on sequential and hierarchical control actions.
+
+## Research Objective 2 {#sec:conclusion-ro2}
+
+> **RO2**: To better understand how the **capabilities** and **deployability** of balancing flexibility in scheduling timeframes are changing during energy transition, and whether these changes impact the suitability of more decentralised operational balancing practices.
+
+There is a role for empirical studies examining whether decentralised operational balancing practices, such as markets for services and products, are purpose-fit to deliver the balancing flexibility requirements of electricity markets in transition – particularly given that new markets for flexibility (e.g. reserve product markets) can introduce additional costs, constraints and complexity, and even encroach upon the functions of existing operational practices.
+
+By quantifying the time-varying spectrum of balancing flexibility **capabilities** in scheduling timeframes for historical and projected resource mixes in two regions of the NEM in [Chapter @sec:reserves], I show that with higher penetrations of VRE: 1) downwards flexibility margins can be exhausted around noon if wind and solar are unable or unwilling to provide it, 2) upwards flexibility becomes more scarce during morning and evening peak demand events and 3) a greater portion of upwards flexibility is provided by energy-limited resources. Based on these findings and an assessment of various flexibility design options, I recommend that policy-makers examine how existing operational practices can be augmented to elicit upwards flexibility provision, and that duration specifications and sustained footroom procurement be considered for reserve products.
+
+Solely examining *capabilities* is insufficient for understanding the *actual availability* of balancing flexibility given that the latter is shaped by market participation decisions. As such, I also examine some aspects of the **deployability** of balancing flexibility capabilities. In [Chapter @sec:info], I explore how market information, participation rules and participant operational strategies affect scheduling decisions and thus balancing flexibility provision qenergy storage resources, which are widely touted to be critical to balancing decarbonised power systems. I first highlight the increasing frequency and severity of errors in AEMO-generated price forecasts, which are widely used by market participants in the NEM to schedule their resources, and propose a hypothesis that market participant (re)bidding is partially responsible for this phenomenon. I then model the extent to which BESS wholesale energy market arbitrage revenues might be reduced (compared to perfect foresight operation) should these forecasts guide battery energy storage scheduling. I find that revenue reductions can be significant, ranging from from ~15–20% reduction in potential annual arbitrage revenue for a 4 hour BESS to 60+% for a 15 minute BESS. Based on the findings from these analyses, I discuss potential changes to market participant scheduling strategies and market design that could improve scheduling outcomes. I recommend that Australian policy-makers not only increase the frequency at which centralised knowledge processes are run, but also consider whether stricter market participation restrictions might incentivise participant bidding strategies that are less likely to induce sudden price forecast swings that can hamper effective scheduling.
+
+## Future work {#sec:conclusion-future_work}
+
+The broad scope of this thesis's research question and the various limitations of the work within this thesis imposed by assumptions and constraints on scope  mean that there are multiple potential directions and improvements that could be pursued to extend the work contained within this thesis. In the subsections below, I highlight the most significant of these directions and improvements.
+
+### Network constraints
+
+### Demand response and distributed, consumer-owned energy resources
+
+### Examining market structure
+
+### Interactions with investment timeframes
+
+
+## Closing remarks {#sec:conclusion-closing_remarks}