DocumentCode :
1270942
Title :
Spot Pricing When Lagrange Multipliers Are Not Unique
Author :
Feng, Donghan ; Xu, Zhao ; Zhong, Jin ; Østergaard, Jacob
Author_Institution :
Dept. of Electr. Eng., Shanghai Jiao Tong Univ., Shanghai, China
Volume :
27
Issue :
1
fYear :
2012
Firstpage :
314
Lastpage :
322
Abstract :
Classical spot pricing theory is based on multipliers of the primal problem of an optimal market dispatch, i.e., the solution of the dual problem. However, the dual problem of market dispatch may yield multiple solutions. In these circumstances, spot pricing or any standard pricing practice based on multipliers cannot generate a unique clearing price. Although such situations are rare, they can cause significant uncertainties and complexities in market dispatch. In practice, this situation is solved through simple empirical methods, which may cause additional operations or biased allocation. Based on a strict extension of the principles of spot pricing and surplus allocation, we propose a new pricing methodology that can yield unique, impartial, and robust solution. The new method has been analyzed and compared with other pricing approaches in accordance with spot pricing theory. Case studies support the results of the theoretical analysis, and further demonstrate that the method performs effectively in both uniform-pricing and nodal-pricing markets.
Keywords :
power markets; pricing; Lagrange multipliers; nodal-pricing markets; optimal market dispatch; pricing methodology; spot pricing theory; surplus allocation; uniform-pricing markets; Electricity supply industry; Equations; Generators; Indexes; Mathematical model; Pricing; Resource management; Double-sided auction; duality; nodal price; spot pricing;
fLanguage :
English
Journal_Title :
Power Systems, IEEE Transactions on
Publisher :
ieee
ISSN :
0885-8950
Type :
jour
DOI :
10.1109/TPWRS.2011.2159629
Filename :
5951825
Link To Document :
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