Experience with PJM market operation, system design, and implementation

Abstract

This paper outlines the fundamental features of the PJM day-ahead energy market and real-time energy market. The Day-ahead market is based on a voluntary least-cost security constrained unit commitment and dispatch with several fundamental design features that ensure the market is robust and competitive. This market offers market participants the option to lock in energy and transportation charges at binding day-ahead prices. The flexibility of the day-ahead market rules provide all participants with equal access to the day-ahead market through consistent price signals and by providing all participants with the ability to submit virtual demand bids and virtual supply offers. These mechanisms promote liquidity in the markets. Economic incentives drive the convergence of the day-ahead and real-time market prices. The real-time energy market is based on security-constrained economic dispatch and is cleared based on the actual system operating conditions. The LMP-based markets support reliable grid operations through efficient price signals.

Variously worldwide types of deregulated electricity markets and their respective transmission congestion management schemes

“…It is serving the area of Pennsylvania, New Jersey, Maryland and other states in the eastern part of United States [13]. PJM is the biggest electricity wholesale market in the world which serves 61 million of customers and has 900 participant power companies.…”

“…PJM has an energy market which is consisted of a day-ahead market and a real-time balancing market; a capacity credit market; a financial transmission right (FTR) auction market and an ancillary service market which is consisted of a regulation market and a pin reserve market [12]. Figure 6 shows PJM market components [12]: The day-ahead market calculates the hourly clearing prices for each hour of the next operating day based on generators' offers, demand bids, virtual supply offers, virtual demand bids and bilateral transaction schedules and those data will be submitted into the day-ahead market voluntarily [13]. The balancing market calculates the clearing price in every 5 minutes period with the principle of actual system operation and security constrained economic dispatch.…”

“…The balancing market calculates the clearing price in every 5 minutes period with the principle of actual system operation and security constrained economic dispatch. Different settlement methods are adopted in two markets [13]. The dayahead market settlement follows the planned hourly power quantities and day-ahead hourly electricity prices.…”

“…The real-time energy market is based on the real-time operation which is described by state estimator with the data from generation offers and transactions [13]. The generation rebidding period from 4 p.m. to 6 p.m. is introduced for the generators who are not selected into day-ahead market schedules to alter their bids.…”

A non-parametric structural hybrid modeling approach for electricity prices

“…In a deregulated electricity market, the market operator determines electricity prices by means of an optimization scheme involving the unit commitment and economic dispatch problems at different time scales, see, e.g., (Schweppe et al, 1988;Conejo et al, 2010) or specifically for the PJM market, (Ott, 2003). This procedure involves many input parameters provided by the market participants, and several types of constraints, making the required computation rather expensive.…”