Simulation of Trading Arrangements Impact on Wind Power Imbalance Costs

Uncertain wind power forecasts is a disadvantage in an electricity market where the majority of the trading is performed several hours before the actual delivery. This paper presents a model which can be used to study how changes in the trading arrangement-in particular changing the delay time between closure of the spot market and the delivery period or changing the imbalance pricing system-would affect different players in the electricity market. The model can be used in Monte Carlo simulation, which is demonstrated for an example system.