Bayesian Belief Networks: Redefining wholesale electricity price modelling in high penetration non-firm renewable generation power systems

Martin J. Maticka and Thair S. Mahmoud

Renewable Energy, 2025, vol. 239, issue C

Abstract: The transition of electricity generation from firm to non-firm renewable generation is driving changes in wholesale electricity price dynamics that are increasingly challenging to model due to the stochastic nature of wind and solar as the primary energy source. Robust pricing models are essential for optimising financial performance in liberalised electricity markets. The novelty of this paper is the application of Bayesian Belief Networks in the modelling of wholesale electricity price formation, specifically in power systems with a high penetration of non-firm renewable generation. This paper links the mathematical Bayesian representation to established statistical and computational approaches using a functional supply-side wholesale electricity market pricing model. In addition, the paper introduces a novel validation method employing volatility analysis to assess the case study's performance.

Keywords: Wholesale Electricity Market (WEM); Bayesian belief networks; Electricity market price model; Renewable generation; Wholesale electricity price forecasting (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:renene:v:239:y:2025:i:c:s096014812402113x

DOI: 10.1016/j.renene.2024.122045

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