Miguel Borrero | Strategic Experimentation: Evidence from Spanish Electricity Auctions

The purpose of the support was to enable me to travel to Spain to the Spanish electricity market operator’s (OMIE) headquarters in Madrid and take their training related to the Spanish electricity market.

Moreover, since I had been in contact through Zoom meetings for data acquisition and discussion of various research questions, this opportunity had the added value of improving the ongoing relationship and meet new people within the structure.

Regarding the training: this was extremely useful. Some of the topics covered in detail and which I found most relevant where:

1. Day ahead auction functioning by Jose Carlos Moreno Martin, vice-chair of market operations. 
2. Supply side bidding rules by Yolanda Cuellar, director of market operations. 
3. Practical session about downloading information regarding day-ahead auction results by Juan Carlos Navarro and Jorge Salido, IT department. 
4. Intra-day market functioning by Nuria Trancho, member of market operation directoriate. 
5. Overview of Spanish electricity market and the regulatory challenges by Diego Roldan (Spanish regulatory institution, CNMC)

The above courses, and more, not only gave me real time knowledge about the auction but also provided a stock of material and information that we can store and access as needed. Indeed I make use of this information as my projects move along given the large number of moving parts in this market.

Furthermore, even though my original focus was just bidding in the day-ahead auction, through the course on the balancing market I learned about the introduction of three sequential auctions in the balancing market to complement the continous intra-day market and this has led to a spin-off regarding the effects of this new market design on the risk mitigation for renewable firms which before this faced a much weaker balancing market and hence more risk in case of having to go to the balancing market due to unforeseen weather circumstances.

Above all, they most valuable aspect of taking the training by OMIE was meeting them in person and obtaining data for our projects. We had already been talking to Pedro Basagoiti (director of technology and innovation at OMIE) through Zoom meetings but in Madrid we could meet at his office. This enabled improving our relationship and we got access to 20 years of historical bidding data for our project and the prospect of more as needed. Pedro introduced us to Juan Bogas (director of market monitoring) which gave a lot of good insights about potential projects and moreover understand well the data that could be available for sharing with us. 

In conclusion, the opportunity to travel to OMIE’s headquarters and learn from the experts which are working directly on the market design issues gave me in first place a much better position in terms of understanding the market functioning and the possible avenues for improvement and secondly it solidified and made stronger the relationship with OMIE and this could be very valuable moving forward.