Abstract:
“Iberian Peninsula Blackout: A Trade-Off Between Operational Risk and Consumer Cost”
Christoph Graf* (University of Barcelona) and Daniel Daví-Arderius (New York University)
Ensuring sufficient energy availability to meet demand, while operating resources within their own physical constraints and those of the electric grid, is fundamental to the secure and reliable functioning of any power system. Under the European short-term wholesale market design, system operators must reactively adjust (redispatch) market schedules originating from an assumed unconstrained (“copper plate”) network. This sequential market-clearing approach can complicate real-time operations and may increase the operational risk. Using hourly market and system data from 2019–2025, we find that following the 2025 Iberian Peninsula Blackout, the Spanish system operator responded by prioritizing operational reliability: it procured greater volumes of gas-fired generation and curtailed available real-time output from wind and solar resources. However, this more conservative approach, focused on ensuring secure and reliable real-time operations, has also resulted in higher redispatching costs and redispatch-induced CO2 emissions.
*Denotes presenter