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Optibid - decision support software for intraday electricity trading

Alternative title: Optibid – programvare som gir beslutningsstøtte for strømhandel i intradagsmarkedet

Awarded: NOK 5.0 mill.

Over the past decade, power producers have increasingly been trading closer to delivery, in intraday markets. This growth will accelerate in the years to come, in part driven by the influx of variable renewable power resources, such as wind and solar. However, these sources of energy have uncertain production that increase price volatility. Power producers therefore have an opportunity to increase their profits by trading more intelligently. Optibid is a decision-support software tool for hydropower producers that provides tailored trading strategies in the intraday markets. It is based on research results from the Department of Industrial Economics and Technology Management and the Department of Electric Power Engineering at the Norwegian University of Science and Technology (NTNU). Optibid empowers hydropower producers to make better use of their flexible production capability, which enables more variable renewable production to enter the system, and thereby assists the transition to a renewable energy system.

A main result of the project was a minimal viable product (MVP) that was used by three of the ten biggest hydropower producers in Norway. Backtest studies with marginal cost curves from pilots show a substantial increase in potential profit of using flexibility on intraday markets. The pilots are interested in subscribing to the technology. Hence the project accomplished the main goals of demonstrating the technology in an industrial context, validating the value proposition of the technology, and building trust in a new method. For the secondary aims, the project could get a direct connection to Nord Pool’s data stream without becoming an independent software vendor (ISV), and thus it was no substantial gain to become an ISV. Instead of the original plan to get a distributor, the project rather developed a REST API so any hydropower producer can use the technology regardless of distributor. This made development quicker and ensured that distributors and their standards were gatekeepers for use. The project intended to motivate a spinout company to acquire venture capital funding for the go-to-market phase of the technology after the technology was verified in the project. Inventors of the technology joined the spinout company Versiro during the project period. The company received pre-seed funding from Startuplab and Fortress Fund and thus the project accomplished secondary goals 4 and 5 to get venture capital to back further commercialization of the technology. The overall goal for the project was to assist the integration of renewable energy and improve efficient use of resources. Results from the backtest studies show that the MVP assist power producers to make better decisions under uncertain production and volatile prices. For instance, if the power system experiences more wind than expected, the hydropower should ramp down production and save that energy to periods of low wind. The technology thus helps to shift supply to when it is most needed and to counter variable renewable production.

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