This dissertation studies how to characterize strategic behaviors in electricity markets from a transmission-constrained residual demand perspective. This dissertation generalizes the residual demand concept, widely used by economists in general markets, to electricity markets, which are constrained by transmission networks. The transmission-constrained residual demand is characterized by a sensitivity analysis of the optimal power flow program, which is the electricity market clearing engine. Methods are proposed to optimize a generator or generation firm's profit utilizing the residual demand sensitivity information, which has several advantages over existing methods. The transmission-constrained residual demand concept and the methods are helpful for market participants to develop bidding strategies and for market monitors to analyze market power in electricity markets. / text

Diss. (sammanfattning) Göteborg : Göteborgs universitet, 2006. / Härtill 3 uppsatser.

The aim of this thesis is to display the problematic areas where greater coordination and cooperation could occur between all energy market players in order to fulfill a vision of a Central and Eastern European regional market place.

La posada en marxa del Mercat Ibèric de l'Electricitat va introduir al sector elèctric espanyol un seguit de nous mecanismes de participació que han forçat els agents a renovar les seves polítiques de gestió. D'aquesta nova situació sorgeix l'oportunitat d'estudiar noves estratègies d'oferta a curt termini per a companyies de generació price-taker que participin diàriament al Mercat Ibèric de l'Electricitat. Aquestes estratègies se centraran al mercat diari, ja que és aquí on es negocia un 80% de l'electricitat que es consumeix diàriament a Espanya i on s'integren gran part de la resta de mecanismes de participació. La liberalització dels mercats elèctrics obre a noves tècniques d'optimització els problemes clàssics de gestió de l'energia. En particular, atesa la incertesa que l'existència del mercat ocasiona als preus, les tècniques de programació estocàstiques es converteixen en la forma més natural per abordar aquests problemes. Als mercats elèctrics el preu es fixa horàriament com a resultat d'un procés de casació , és a dir que quan l'agent ha d'efectuar la seva oferta desconeix el preu al qual li vindrà remunerada l'energia. Aquesta incertesa fa imprescindible l'ús de tècniques estadístiques per obtenir informació del mercat i introduir-la als models d'optimització. En aquest aspecte, una de les contribucions d'aquesta tesi és l'estudi dels preus del mercat de l'electricitat a Espanya i el seu modelat mitjançant models factorials. D'altra banda, s'hi es descriuen els nous mecanismes presents al Mercat Ibèric de l'Electricitat que afecten directament la producció física de les unitats. En particular, s'inclou el modelat detallat dels contractes de futurs físics i bilaterals i de la seva inclusió a l'oferta del mercat diari per part de les companyies de generació. Als models presentats, es tenen en compte explícitament les regles del mercat, així com les clàssiques restriccions d'operació de les unitats, tant tèrmiques com de cicle combinat. A més, es deriva i es demostra l'expressió de la funció d'oferta. Per tant, els models construïts són una eina per decidir l'assignació de les unitats, la generació dels contractes de futurs físics i bilaterals a través seu i l'oferta òptima d'una companyia de generació. Un cop s'han cobert aquests objectius, es presenta una millora dels models mitjançant la inclusió de la seqüència de mercats de molt curt termini per tal de modelar la influència que tenen en l'oferta al mercat diari. Aquests mercats es casen just abans i durant el dia en què l'energia ha de ser consumida, i això permetrà veure com la possibilitat d'augmentar els beneficis participant-hi afecta directament les estratègies d'oferta òptima del mercat diari. Els models presentats en aquest treball han estat provats amb dades reals provinents del Mercat Ibèric de l'Electricitat i d'una companyia de generació que hi opera. Els resultats obtinguts són adequats i es discuteixen al llarg del document / La puesta en marcha del Mercado Ibérico de la Electricidad introdujo en el sector eléctrico español una serie de nuevos mecanismos de participación que han forzado a los agentes a renovar sus políticas de gestión. De esta nueva situación surge la oportunidad de estudiar nuevas estrategias de oferta para las compañías de generación. Esta tesis se enmarca en las estrategias de oferta a corto plazo para compañías de generación price-taker que participen diariamente en el Mercado Ibérico de la Electricidad. Estas estrategias se centraran en el mercado diario ya que es donde se negocia un 80% de la electricidad consumida diariamente en España y es donde se integran gran parte del resto de los mecanismos de participación. La liberalización de los mercados eléctricos permite aplicar nuevas técnicas de optimización a los problemas clásicos de gestión de la energía. En concreto, dada la incertidumbre en el precio existente en el mercado, las técnicas de programación estocástica se convierten en la forma más natural para abordar estos problemas. En los mercados eléctricos el precio se fija horariamente como resultado de un proceso de casación, es decir, cuando el agente debe efectuar sus ofertas desconoce el precio al que la energía le será pagada. Esta incertidumbre hace imprescindible el uso de técnicas estadísticas para obtener información del mercado e introducirla en los modelos de optimización. En este aspecto, una de las contribuciones de esta tesis es el estudio del precio de la electricidad en España y su modelado mediante modelos factoriales. Se describen los nuevos mecanismos presentes en el Mercado Ibérico de la Electricidad que afectan directamente a la producción física de las unidades. En particular, se incluye una modelización detallada de los contratos de futuros físicos y bilaterales y su inclusión en la oferta enviada al mercado diario por las compañías de generación. En los modelos presentados se tiene en cuenta explícitamente las reglas del mercado así como las clásicas restricciones de operación de las unidades, tanto térmicas como de ciclo combinado. La expresión de la función de oferta óptima se deriva y se demuestra. Por lo tanto, los modelos construidos son una herramienta para decidir la asignación de unidades, la generación de los contratos de futuros físicos y bilaterales a través de ellas y la oferta óptima de una compañía de generación. Una vez alcanzados estos objetivos, se presenta una mejora del modelo con la inclusión de la secuencia de mercados de muy corto plazo. El objetivo es modelar la influencia que esta tiene en la oferta al mercado diario. Estos mercados se casan justo antes y durante el día en el que la energía va a ser consumida y se verá cómo la posibilidad de aumentar los beneficios participando en ellos afecta a las estrategias de oferta óptima del mercado diario. Los modelos presentados en este trabajo se han probado con datos reales procedentes del Mercado Ibérico de la Electricidad y de una compañía de generación que opera en él. Los resultados obtenidos son adecuados y se discuten a lo largo del documento. / The start-up of the Iberian Electricity Market introduced a set of new mechanisms in the Spanish electricity sector that forced the agents participating in the market to change their management policies. This situation created a great opportunity for studying the bidding strategies of the generation companies in this new framework. This thesis focuses on the short-term bidding strategies of a price-taker generation company that bids daily in the Iberian Electricity Market. We will center our bidding strategies on the day-ahead market because 80% of the electricity that is consumed daily in Spain is negotiated there and also because it is the market where the new mechanisms are integrated. The liberalization of the electricity markets opens the classical problems of energy management to new optimization approaches. Specifically, because of the uncertainty that the market produces in the prices, the stochastic programming techniques have become the most natural way to deal with these problems. Notice that, in deregulated electricity markets the price is hourly fixed through a market clearing procedure, so when the agent must bid its energy it is unaware of the price at which it will be paid. This uncertainty makes it essential to use some statistic techniques in order to obtain the information coming from the markets and to introduce it in the optimization models in a suitable way. In this aspect, one of the main contributions of this thesis has been the study the Spanish electricity price time series and its modeling by means of factor models. In this thesis, the new mechanism introduced by the Iberian Market that affects the physical operation of the units is described. In particular, it considers in great detail the inclusion of the physical futures contracts and the bilateral contracts into the day-ahead market bid of the generation companies. The rules of the market operator have been explicitly taken into account within the mathematical models, along with all the classical operational constraints that affect the thermal and combined cycle units. The expression of the optimal bidding functions are derived and proved. Therefore, the models built in this thesis provide the generation company with the economic dispatch of the committed futures and bilateral contracts, the unit commitment of the units and the optimal bidding strategies for the generation company. Once these main objectives were fulfilled, we improved the previous models with an approach to the modeling of the influence that the sequence of very short markets have on optimal day-ahead bidding. These markets are cleared just before and during the day in which the electricity will be consumed and the opportunity to obtain benefits from them changes the optimal day-ahead bidding strategies of the generation company, as it will be shown in this thesis. The entire models presented in this work have been tested using real data from a generation company and Spanish electricity prices. Suitable results have been obtained and discussed.

Market power mitigation has been an integral part of wholesale electricity markets since deregulation. In wholesale electricity markets, different regions in the US take different approaches to regulating market power. While the exercise of market power has received considerable attention in the literature, the issue of market power mitigation has attracted scant attention. In the first chapter, I examine the market power mitigation rules used in New York ISO (Independent System Operator) and California ISO (CAISO) with respect to day-ahead and real-time energy markets. I test whether markups associated with New York in-city generators would be lower with an alternative approach to mitigation, the CAISO approach. Results indicate the difference in markups between these two mitigation rules is driven by the shape of residual demand curves for suppliers. Analysis of residual demand curves faced by New York in-city suppliers show similar markups under both mitigation rules when no one supplier is necessary to meet the demand (i.e., when no supplier is pivotal). However, when some supplier is crucial for the market to clear, the mitigation rule adopted by the NYISO consistently leads to higher markups than would the CAISO rule. This result suggest that market power episodes in New York is confined to periods where some supplier is pivotal. As a result, I find that applying the CAISOs' mitigation rules to the New York market could lower wholesale electricity prices by 18%. The second chapter of my dissertation focuses on supply function equilibrium. In power markets, suppliers submit offer curves in auctions, indicating their willingness to supply at different price levels. Although firms are allowed to submit different offer curves for different time periods, surprisingly many firms stick to a single offer curve for the entire day. This essentially means that firms are submitting a single offer curve for multiple demand realizations. A suitable framework to analyze such oligopolistic competition between power market suppliers is supply function equilibrium models. Using detailed bidding data, I develop equilibrium in supply functions by restricting supplier offers to a class of supply functions. By collating equilibrium supply functions corresponding to different realizations of demand, I obtain a single optimal supply function for the entire day. Then I compare the resulting supply function with actual day-ahead offers in New York. In addition to supply function equilibrium, I also develop a conservative bidding approach in which each firm assumes that rivals bid at marginal costs. Results show that the supply functions derived from equilibrium bidding model in this paper is not consistent with actual bidding in New York. This result is mainly driven by the class of supply functions used in this study to generate the equilibrium. Further, actual offers do not resemble offers generated by the conservative bidding algorithm.

Diss. Stockholm : Handelshögsk., 2003.

abstract: This thesis presents an overview of the calculation and application of locational marginal prices in electric power systems particularly pertaining to the distribution system. The terminology proposed is a distribution locational marginal price or DLMP. The calculation of locational process in distribution engineering is conjectured and discussed. The use of quadratic programming for this calculation is proposed and illustrated. A small four bus test bed exemplifies the concept and then the concept is expanded to the IEEE 34 bus distribution system. Alternatives for the calculation are presented, and approximations are reviewed. Active power losses in the system are modeled and incorporated by two different methods. These calculation methods are also applied to the 34 bus system. The results from each method are compared to results found using the PowerWorld simulator. The application of energy management using the DLMP to control load is analyzed as well. This analysis entails the use of the DLMP to cause certain controllable loads to decrease when the DLMP is high, and vice-versa. Tests are done to illustrate the impact of energy management using DLMPs for residential, commercial, and industrial controllable loads. Results showing the dynamics of the loads are shown. The use and characteristics of Matlab function FMINCON are presented in an appendix. / Dissertation/Thesis / M.S. Electrical Engineering 2013

This dissertation presents the design, analysis, and validation of a hierarchical transactive control system that engages demand response resources to enhance the integration of renewable electricity generation resources. This control system joins energy, capacity and regulation markets together in a unified homeostatic and economically efficient electricity operation that increases total surplus while improving reliability and decreasing carbon emissions from fossil-based generation resources. The work encompasses: (1) the derivation of a short-term demand response model suitable for transactive control systems and its validation with field demonstration data; (2) an aggregate load model that enables effective control of large populations of thermal loads using a new type of thermostat (discrete time with zero deadband); (3) a methodology for optimally controlling response to frequency deviations while tracking schedule area exports in areas that have high penetration of both intermittent renewable resources and fast-acting demand response; and (4) the development of a system-wide (continental interconnection) scale strategy for optimal power trajectory and resource dispatch based on a shift from primarily energy cost-based approach to a primarily ramping cost-based one. The results show that multi-layer transactive control systems can be constructed, will enhance renewable resource utilization, and will operate in a coordinated manner with bulk power systems that include both regions with and without organized power markets. Estimates of Western Electric Coordinating Council (WECC) system cost savings under target renewable energy generation levels resulting from the proposed system exceed US$150B annually by the year 2024, when compared to the existing control system. / Graduate

La simulation des processus complexes dans des réseaux de transport d'électricité de grande taille nécessite la réduction de la dimension du problème. Comment réduire la complexité spatiale d'un réseau de grande dimension en gardant un bon niveau de précision ? Pour répondre à cette question nous avons divisé ce travail en trois grandes étapes : 1) la réduction par agrégation du nombre de nœuds; 2) la modélisation des liaisons entre ces clusters de nœuds et 3) le calcul des capacités des lignes équivalentes.L'agrégation des nœuds dans un cluster implique que celui-ci sera traité comme une plaque de cuivre par le modèle de marché. En conséquence, pour l'agrégation des nœuds, les congestions récurrentes dans le réseau sont identifiées et placées idéalement aux frontières des clusters. Après la réduction, la même répartition des flux dans le réseau complet et dans le modèle réduit du réseau doit être trouvée. Pour ce fait une méthodologie d'estimation d'une matrice PTDF a été développée. Pour les études économiques la limite thermique des lignes est un paramètre clé. Pour résoudre ce problème, nous proposons une méthodologie qui estime les capacités équivalentes à partir des points de fonctionnement historiques du système complet. Les approches présentées dans ce travail ont été appliquées sur un modèle du réseau continental européen et ont permis d'obtenir un modèle simplifié qui minimise la perte d'information. / The simulation of complex processes in large scale power systems needs the reduction of the problem. How to reduce the spatial complexity of a large scale power network while minimizing information loss? To answer this question we have divided this work in three main steps: 1) network buses aggregation; 2) modelling of the clusters' links; 3) defining the equivalent branches maximum exchange capacity.The bus aggregations in a cluster implies that it will be treated as a coppper-plate by the market model. Therefore, the most frequent network congestions must be identified ideally placed at the clusters frontiers. After the reduction, the same power flow repartition must be found in both reduced and complete model. To do that, a methodology to define a PTDF matrix was developed. For economic purpose studies, the branches maximum capacity is a key parameter, to define this value, a methodology is proposed that estimates the equivalent transmission capacities using historical system operating set points.These approaches were applied to the European transmission network and allowed to define a reduced model that minimises the information loss.

Yes / Electricity Suppliers in competitive electricity markets commonly respond to prices changes which are fluctuating over time, but most consumers respond to the price changes as reflected on their electricity bills. Almost all consumers pay fixed tariffs for their consumption without distinctions based on usage time, so these consumers have had no incentives to reduce their use during the peak times. This paper aims to analyze the influence of different tariff schemes on consumer behaviours in UK domestic buildings. A realistic half hourly electricity load profile for different types of UK households that based mainly on public reports and statistics has been generated. This load profile data were used to help calculate the expected change in consumers' bills under standard tariffs offered from different suppliers to what the cost of electricity would be under time varying tariff (economy7 tariff) and to estimate of how much consumers would shift their load in response to price changes without changing total consumption, for which the results are presented and discussed / MSCRC