Coordination of power and natural gas markets via financial instruments

Current electricity and natural gas markets operate with deterministic description of uncertain supply, in a temporally sectorally decoupled way. This practice energy systems is being challenged by the increasing integration stochastic renewable sources. There growing need for exchanging operational flexibility among sectors, which requires to improve sectoral coordination between markets. In addition, dispatch flexible units both sectors needs be made more uncertainty-aware manner, requiring strengthen temporal day-ahead real-time We explore use existing financial instruments form virtual bidding (VB) as market-based solution enhance It established literature that VB purely players able By developing various equilibrium optimization models, we show physical players, i.e., gas-fired power plants, at interface great potential not only markets, but also exploit fully co-optimization model an ideal benchmark, numerically illustrate benefits overall market efficiency terms reduced expected cost entire system. eventually resources are dispatched efficiently stage when exists.