Assessing pool-based pricing mechanisms in competitive electricity markets

Author

Mendes, Dilcemar P. ; Kirschen, Daniel S.

Author_Institution

Fed. Univ. of Ceara, Brazil

Volume

4

fYear

2000

fDate

2000

Firstpage

2195

Abstract

This paper presents four alternative fixed cost allocation schemes to determine the spot prices of electricity in a centralised market with a complex bidding structure. Payment adequacy constraints are introduced in the pricing mechanisms to ensure that all generators recover their bidding prices. The numeric results show that by adopting different fixed cost allocation schemes, the total electricity prices and hence the customers´ payments can vary significantly. Furthermore, different schemes yield significant changes in the generators´ profitability. The issues discussed in this paper are illustrated using 10-, 26- and 110-unit systems

Keywords

costing; electricity supply industry; 10-unit systems; 110-unit systems; 26-unit systems; bidding prices recovery; centralised market; competitive electricity markets; complex bidding structure; fixed cost allocation schemes; payment adequacy constraints; pool-based pricing mechanisms; pricing mechanisms; spot prices determination; total electricity prices; Costs; Economic forecasting; Electricity supply industry; Power generation; Power generation economics; Power markets; Power systems; Pricing; Production; Profitability;

fLanguage

English

Publisher

ieee

Conference_Titel

Power Engineering Society Summer Meeting, 2000. IEEE

Conference_Location

Seattle, WA

Print_ISBN

0-7803-6420-1

Type

conf

DOI

10.1109/PESS.2000.866986

Filename

866986