Comparison of Electricity Markets: Centralized, Decentralized and the Consequences of the Insertion of Renewable Energies

Abstract

In the present document, an analysis is carried out on both centralized and decentralized electricity markets, as well as the advantages, challenges, and associated technologies with each approach. Centralized electricity markets offer benefits such as competition among generators, stability, and centralized coordination. However, they face challenges in coordinating multiple actors and integrating intermittent renewable sources. In contrast, decentralized markets empower consumers, diversify energy sources, and enhance energy security. Nevertheless, they encounter challenges in local coordination, network stability, and decision-making without a central authority. Centralized and decentralized electricity markets have their own advantages and challenges in energy management and the integration of renewable sources. Both approaches are being shaped by technological evolution and energy policies towards a more sustainable and diversified energy matrix.