Modelling Dynamic Constraints in Electricity Markets and the Costs of Uncertain Wind Output

Felix Müsgens and Karsten Neuhoff ()

Cambridge Working Papers in Economics from Faculty of Economics, University of Cambridge

Abstract: Building on models that represent inter-temporal constraints in the optimal production decisions for electricity generation, the paper analysis the resulting costs and their impact on prices during the day. We linearise the unit commitment problem to facilitate the interpretation of shadow prices. Analytic research gives insights for a system with one technology and numeric implementation provides results for the German power system. The model is expanded to a stochastic optimisation with recourse. The model is used to calculate the cost of wind uncertainty and the value of updating wind forecasts.

Keywords: Electricity Markets; Energy Modelling; Optimisation Models (search for similar items in EconPapers)
JEL-codes: C61 Q41 (search for similar items in EconPapers)
Pages: 25
Date: 2006-02
Note: IO
References: Add references at CitEc
Citations: View citations in EconPapers (9)

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Related works:
Working Paper: Modelling Dynamic Constraints in Electricity Markets and the Costs of Uncertain Wind Output (2006)
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Persistent link: https://EconPapers.repec.org/RePEc:cam:camdae:0610

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