Abstract
The global energy transition toward net-zero emissions by 2050 is expected to increase the share of variable renewable energy sources (VRES) in the energy system. As a result, industrial actors will operate under increasingly complex market conditions, driven by volatile electricity prices and rising CO2 costs. These dynamics highlight the need to exploit opportunities in spot-market arbitrage and reserve market participation, while complying with evolving regulatory requirements. This paper presents a multi-stage optimization framework designed to support investment decisions in flexible assets and to enable reserve market participation through ancillary service provision. The framework integrates investment planning, bidding strategies in spot and reserve markets, and real-time operational decisions. Uncertainties in market prices and operational conditions are handled through a nodal formulation. A case study of a large industrial site in Norway demonstrates the framework’s application, comparing investment decisions across alternative technology pathways and CO2 price trajectories under varying market conditions.