Pricing in non-convex markets with quadratic deliverability costs

Xiaolong Kuang, Alberto J. Lamadrid and Luis F. Zuluaga

Papers from arXiv.org

Abstract: The problem of obtaining market-clearing prices for markets with non-convexities has been widely studied in the literature. This is particularly the case in electricity markets, where worldwide deregulation leads to markets in which non-convexities arise from the decisions of market operators regarding which generators are committed to provide electricity power. Here, we extend seminal results in this area to address the problem of obtaining market-clearing prices for markets in which beyond non-convexities, it is relevant to account for convex quadratic market costs. In a general market, such costs arise from quadratic commodity costs or transactions costs. In an electricity market, such quadratic costs arise when ramping costs need to be considered due to the presence of renewable energy sources, which continue to increase their participation in electricity markets. To illustrate our results, we compute and analyze the clearing prices of a classical market problem with the addition of ramping costs.

Date: 2017-05
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://arxiv.org/pdf/1705.01675 Latest version (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:arx:papers:1705.01675

Access Statistics for this paper

More papers in Papers from arXiv.org
Bibliographic data for series maintained by arXiv administrators ().