Auction design in day-ahead electricity markets

Abstract

Competition in day-ahead electricity markets has been established through auctions where generators and loads bid prices and quantities. Different approaches have been discussed regarding the market auction design. Multi-round auctions, despite its implementation complexity, allow market participants to adapt their successive bids to market prices considering their operational and economic constraints. However, most of the day-ahead electricity market implementations use noniterative single-round auctions. This paper presents a market simulator to compare both auction models. Different auction alternatives, such as the Spanish single-round auction that takes into account special conditions included in the generator bids, and multi-round auctions with different stopping rules, are analyzed. The results and acquired experience in the simulation of the Spanish market, started in January 1998, are presented. Hourly market prices, average daily price, price/demand correlation and several economic efficiency indicators, such as generator surplus, consumer surplus and social welfare, are compared to derive conclusions regarding the performance of the auction alternatives.

LP models for pricing diffuse nitrate discharge permits

“…Some electricity markets do allow participants to include conditions, such as nondivisible quantities and start-up costs or restrictions, in their quantity/price bids (Contreras et al 2001). But here we exclude private constraints that require integer variables, assuming that farms can internalize those constraints into their bids based on past learning, or by iterating through trial market rounds.…”

Bidding Strategy for Aggregators of Electric Vehicles in Day-Ahead Electricity Markets

“…In general, it is only possible for the EV owners to discharge their batteries in real-time, balancing or ancillary service markets for high prices to compensate the discharging costs. Nonetheless, the bid prices in (33) and (36) are applicable not only in day-ahead market, but also in real-time and ancillary service markets.…”

“…Thus, correction terms that consider the successful bids in the previous published market clearance results are introduced to revise the bids in (33) and (36). Binary variables µ o (a,k) and µ u (a,k) are assumed to have positive values if the k-th provisional cleared total EV charging energy of the a-th EV aggregator is higher or lower than the estimated daily energy requirement.…”

Can we prevent the gaming of ramp constraints?

“…The solution gets more complex if the objective is to minimize total procurement cost, since that criterion introduces nonconvexities. It should be noted that the day-ahead electricity auction in the Spanish system allows bidders to specify ramp constraints as well as a floor on their total 24-hour revenue, which are incorporated into the market clearing formulation and solved using a heuristic algorithm [1].…”