On the computation of the probability distribution of the spot market price in a deregulated electricity market

With the development of China’s electricity spot market, planned power and market power will coexist for a long time. At the same time, by avoiding the risk of market price fluctuation through medium and long-term market, spot market guarantees electricity balance and secure operation of the grid. The electricity market mechanism has an increasingly large influence on the operation and dispatching model of power system. In spot market, decoupling operation model of market and non-market power has a large influence on both supply and demand sides and improper dredging mechanism may cause significant settlement deviation. To solve this problem, the paper, taking a city in northern China as an example, analyzes the electricity spot market, compares the sources of difference fund of market and non-market power under decoupling and non-decoupling models and compares the pros and cons of coupling and decoupling. The paper also studies the disparity of difference fund and proposes advice adapted to the electricity spot market development of northern China.

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Stochastic control for risk under deregulated electricity market — a case study using a new formulation

Canadian Journal of Civil Engineering ◽

10.1139/l05-030 ◽

2005 ◽

Vol 32 (4) ◽

pp. 719-725 ◽

Cited By ~ 12

Author(s):

Joyce Li Zhang ◽

K Ponnambalam

Keyword(s):

Electricity Market ◽

Explicit Method ◽

State Variables ◽

Risk Minimization ◽

Solution Approach ◽

Second Moments ◽

Deregulated Electricity Market ◽

New Formulation ◽

Dual Dynamic Programming

This paper describes the implementation of a new solution approach — Fletcher-Ponnambalam model (FP) — for risk management in hydropower system under deregulated electricity market. The FP model is an explicit method developed for the first and second moments of the storage state distributions in terms of moments of the inflow distributions. This method provides statistical information on the nature of random behaviour of the system state variables without any discretization and hence suitable for multi-reservoir problems. Also avoiding a scenario-based optimization makes it computationally inexpensive, as there is little growth to the size of the original problem. In this paper, the price uncertainty was introduced into the FP model in addition to the inflow uncertainty. Lake Nipigon reservoir system is chosen as the case study and FP results are compared with the stochastic dual dynamic programming (SDDP). Our studies indicate that the method could achieve optimum operations, considering risk minimization as one of the objectives in optimization.Key words: reservoir operations, explicit method, uncertainty, stochastic programming, risk.

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Deregulated electricity market, a stochastic variational approach

Energy Economics ◽

10.1016/j.eneco.2021.105493 ◽

2021 ◽

Vol 103 ◽

pp. 105493

Author(s):

Michele Limosani ◽

Monica Milasi ◽

Domenico Scopelliti

Keyword(s):

Electricity Market ◽

Variational Approach ◽

Deregulated Electricity Market

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Economic Evaluation of Wind Power Projects in a Mix of Free and Regulated Market Environments in Brazil

Energies ◽

10.3390/en14113325 ◽

2021 ◽

Vol 14 (11) ◽

pp. 3325

Author(s):

Vanderson Aparecido Delapedra-Silva ◽

Paula Ferreira ◽

Jorge Cunha ◽

Herbert Kimura

Keyword(s):

Electricity Market ◽

Free Market ◽

Market Price ◽

Investment Project ◽

Spot Price ◽

Market Uncertainty ◽

Discounted Cash Flow ◽

Expected Return ◽

Price Expectation ◽

Free Market Price

The electricity market in Brazil is basically organized under two parts: the regulated market, where energy is traded through auctions, and the free market, where market participants freely negotiate the price and quantity of electricity. Although revenues obtained in the regulated market tend to be lower than in the free market, the auctions’ results show that investors still value the lesser degree of uncertainty associated with the regulated market. However, a growing interest in the free market by investors is recognized since the price of electricity tends to be higher. Therefore, this study investigates four free market price scenarios to assess the expected return for investors, using the traditional discounted cash flow approach complemented with Monte Carlo simulation to address market uncertainty. The study breaks new ground by capturing the weekly price fluctuations and including the price elasticity of demand of the free market. The results seem to indicate that the disclosure of the ceiling and floor price limits for the spot price can signal important information about the agents’ price expectation in the free market and can be used for investment project evaluation.

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Analysis of a Stochastic Programming Model for Optimal Hydropower System Operation under a Deregulated Electricity Market by Considering Forecasting Uncertainty

Water ◽

10.3390/w10070885 ◽

2018 ◽

Vol 10 (7) ◽

pp. 885 ◽

Cited By ~ 4

Author(s):

Bin Xu ◽

Ping-An Zhong ◽

Baoyi Du ◽

Juan Chen ◽

Weifeng Liu ◽

...

Keyword(s):

Stochastic Programming ◽

Electricity Market ◽

Energy Production ◽

Programming Model ◽

Optimal Operation ◽

Spot Price ◽

Deregulated Electricity Market ◽

Hydropower System ◽

Stochastic Programming Model ◽

Hydropower Operation

In a deregulated electricity market, optimal hydropower operation should be achieved through informed decisions to facilitate the delivery of energy production in forward markets and energy purchase level from other power producers within real-time markets. This study develops a stochastic programming model that considers the influence of uncertain streamflow on hydropower energy production and the effect of variable spot energy prices on the cost of energy purchase (energy shortfall). The proposed model is able to handle uncertainties expressed by both a probability distribution and discretized scenarios. Conflicting decisions are resolved by maximizing the expected value of net revenue, which jointly considers benefit and cost terms under uncertainty. Methodologies are verified using a case study of the Three Gorges cascade hydropower system. The results demonstrate that optimal operation policies are derived based upon systematic evaluations on the benefit and cost terms that are affected by multiple uncertainties. Moreover, near-optimal operation policy under the case of inaccurate spot price forecasts is also analyzed. The results also show that a proper policy for guiding hydropower operation seeks the best compromise between energy production and energy purchase levels, which explores their nonlinear tradeoffs over different time periods.

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