Central- versus Self-Dispatch in Electricity Markets

Abstract

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Optimal Capacity Mechanisms for Competitive Electricity Markets

“…We allow consumer demand be stochastic (which can also be interpreted as shifts in net demand due to variable renewable generation). 2 Third, if demand exceeds generation capacity, there is forced rationing, in the form of rolling black-outs, leading to a welfare loss for disconnected consumers. Moreover, we consider a system-cost externality which represents lost welfare due to uncontrolled system-wide black-outs or that it is costly for the system operator to conduct controlled rolling black-outs (see also Joskow & Tirole 1 Electricity markets are commonly characterized by a range of conventional generation technologies such as coal, natural gas, or nuclear.…”

Impact of Imbalance Pricing on Variable Renewable Energies with Different Prediction Accuracies: A Korean Case

“…The Korean system operation model comprises a centralized dispatching model [17]. The Korean Power Exchange (KPX), an independent SO (ISO), operates a day-ahead market (DAM) and Korean power system in real-time [18].…”

“…Since then, in 2007, FERC Order 890 was revised to impose a penalty charge for excessive imbalances [27]. The rule is formulated as shown in Equations ( 12)- (17). In this regard, as a detailed formula is not provided, we have assumed that the penalty is applied only when the system imbalance worsens.…”

Optimal Capacity Mechanisms for Competitive Electricity Markets

“…We allow consumer demand be stochastic (which can also be interpreted as shifts in net demand due to variable renewable generation). 2 Third, if demand exceeds generation capacity, there is forced rationing, in the form of rolling black-outs, leading to a welfare loss for disconnected consumers. Moreover, we consider a system-cost externality which represents lost welfare due to uncontrolled system-wide black-outs or that it is costly for the system operator to conduct controlled rolling black-outs (see also Joskow & Tirole 1 Electricity markets are commonly characterized by a range of conventional generation technologies such as coal, natural gas, or nuclear.…”

“…We use a continuum to approximate this real-world diversity of discrete technologies. 2 We do not attempt to model demand-side response (which is sometimes interpreted as a form of capacity mechanism). 2007; Fabra 2018; Llobet & Padilla 2018).…”