Simple or complex bids in the day-ahead electricity market

The liberalization of the electricity market, already affirmed or in progress in many European and worldwide countries, has originated many technical debates over the definition of the market model that can be considered as optimal for electricity. In this context, one of the most discussed issues is the mechanism for bid selection in the day-ahead energy market. On the one hand, the method used to define electricity price and accepted quantities must aim to simplicity and transparency, essential requirements to allow an adequate development and a constant monitoring of the market; on the other hand, it must consider the physical and security requirements of the electric system, translated into specific technical-economical constraints. The selection mechanism based on the so-called "simple bids”, used at present for example in the Italian Market, enables the producers to submit sale proposals containing only the indication of offered amount and requested price. In this case, the target of obtaining a production profile consistent with the technical performances of his own power plants, and economically profitable as well, is left to the bidding skill of each single generating company. Precise critics have been addressed to this methodology, because this mechanism does not take into account some technical aspects about generation units (max load gradient, technical minimum, etc.) or economical issues not directly expressed by the price-quantity curves (no-load costs, start-up costs, etc.). On the basis of these consideration (ref.[1]), some electricity markets, like the Spanish one, are providing for the possibility of producers to submit so-called “complex bids”, containing technical-economical specifications in addition to the indications provided by the simple price/quantity pairs. This paper proposes a quantitative approach to compare the economical and technical effects of simple and complex bids. By means of a market simulation tool, the possible impact of complex bids in the Italian electricity market has been estimated

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)