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Using Mathematical Programming for Electricity Spot Pricing
Author(s) -
Hogan W.W.,
Read E.G.,
Ring B.J.
Publication year - 1996
Publication title -
international transactions in operational research
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.032
H-Index - 52
eISSN - 1475-3995
pISSN - 0969-6016
DOI - 10.1111/j.1475-3995.1996.tb00048.x
Subject(s) - electricity , spot contract , electricity market , electricity pricing , competition (biology) , incentive , spot market , duality (order theory) , microeconomics , computer science , economics , operations research , industrial organization , financial economics , mathematics , electrical engineering , engineering , ecology , discrete mathematics , biology , futures contract
Recent moves around the world to introduce competition into electricity markets have created a need for mechanisms to determine electricity spot prices which provide good incentives for market coordination. Duality theory suggests that such prices can be found by solving a mathematical program. We derive implicit prices corresponding to an actual half‐hourly dispatch of a full a.c. power system, and discuss the application of spot pricing in New Zealand and the United States.