Clearing procedures for day-ahead Italian electricity market: are complex bids really required?

Many technical debates discussed in the last years the market structure that can be considered as optimal for electricity in a deregulated environment. Simplicity and market transparency do not always comply with the intrinsic complexity of the electrical system, due to technical constraints and security requirements. The mechanism for bid selection in the day-ahead market is one of the most discussed topics, because it strongly influences both the economical revenues of operators and the physical feasibility of the dispatching schedules set by the market. Usual production bids, only detailing hourly prices and quantities (“simple bids”), do not transfer to the clearing mechanism important technical-economical integral constraints, like the minimum daily revenue required by the operator or the power ramp limitation of generating units; in this case, adjustment sessions follow the primary energy market, to correct undesired or unfeasible outcomes. In some markets, such additional constraints are already expressed in the so-called “complex bids”, thus avoiding or minimizing the need for adjustment sessions. Nevertheless, the clearing mechanism of the day-ahead market results strongly complicated and the system transparency decreases; the effectiveness of this solution must be then carefully assessed. In this paper, we present an analysis of the possible quantitative impact of complex bids in the Italian electricity day-ahead market, in order to evaluate possible benefits and drawbacks

Offerte semplici o complesse nel mercato dell’energia del giorno prima

L’articolo propone un’analisi comparata dei meccanismi di formazione del prezzo di borsa dell’energia basati su offerte semplici e complesse, stimando l’impatto qualitativo e quantitativo di una tecnica a offerte complesse nella realtà italiana e discutendone l’effettiva necessità sia in termini di frequenza di attivazione dei vincoli che di entità dei volumi energetici interessati dalla loro violazione

Assessment of the accuracy of electricity price forecasts on the basis of a mixed deterministic-probabilistic approach

Nowadays it is essential for an electricity market player to have not only tools for price forecasting, but also methods for quantifying the accuracy of such forecasts, in order to perform an optimum risk management of his physical/financial portfolio. This paper proposes a simple method to assess the accuracy of electricity price forecasts, based on the probability distributions of the main factors affecting the price. In particular, the method consists in the identification of the main drivers of the electricity spot price, the estimation of their probability distributions and finally their combination in order to determine the probability distribution of the corresponding electricity price. The sensitivity analysis between the price and its drivers is carried out by means of a deterministic electricity market simulator. The validity of the proposed methodology has been tested on the present scenario of the Italian electricity market (year 2004)