An Intraday Market Design for Colombia's Energy Transition

The massive promotion of intermittent renewable resources as a decarbonization strategy for economies has led to the need to reconsider current market designs in order to facilitate the integration of this kind of production technology. The intraday market has established itself as an efficient mechanism for these purposes, as has been seen in diverse international experiences, principally Europe. The Colombian electricity market is no stranger to the needs of these reforms, as the National Energy and Mining Planning Office of Colombia (UPME in Spanish) estimates that by 2034 almost 30% of the electricity generation matrix will be comprised of intermittent renewable resources. This paper develops several elements to be considered for the implementation of an intraday market in Colombia, backed with quantitative information, contrary to previous studies that have based their recommendations on qualitative elements. The number of discrete intraday sessions, the effect of changing from a sequential energy and reserve allocation scheme to a co-optimized one, as well as the adjustment mechanism - or a balance mechanism - after the gate closure are, among other aspects, analyzed in this study. The computational simulations executed with real data from two operating months with different characteristics in terms of prices, unavailable assets - a liquidity factor for the new market - and system contingencies support the design elements developed in this study. That is, the proposed design - four sections, co-optimization of energy and reserve, and an adjustment mechanism that is not based only on the use of reserves - tested with real data confirm that this proposal is more convenient than the other kind of design from an operating cost and unavailability management perspective. The results reveal market design elements that must be considered in Colombia and serve as input for other countries - particularly Latin American countries - that are in the process of updating their electricity market designs as part of the current energy transition.