Long-Run Optimal Pricing in Electricity Markets with Non-Convex Costs

Determining optimal prices in non-convex markets remains an unsolved challenge. Non-convex costs are critical in electricity markets, as startup costs and minimum operating levels yield a non-convex optimal value function over demand levels. While past research largely focuses on the performance of different non-convex pricing frameworks in the short-run, we determine long-run adapted resource mixes … Read more

Efficient Prices under Uncertainty and Non-Convexity

Operators of organized wholesale electricity markets attempt to form prices in such a way that the private incentives of market participants are consistent with a socially optimal commitment and dispatch schedule. In the U.S. context, several competing price formation schemes have been proposed to address the non-convex production cost functions characteristic of most generation technologies. … Read more

Quasi-Stochastic Electricity Markets

With wind and solar becoming major contributors to electricity production in many systems, wholesale market operators have become increasingly aware of the need to address uncertainty when forming prices. While implementing theoretically ideal stochastic market clearing to address uncertainty may be impossible, the use of operating reserve demand curves allows market designers to inject an … Read more

Global Optimization of Multilevel Electricity Market Models Including Network Design and Graph Partitioning

We consider the combination of a network design and graph partitioning model in a multilevel framework for determining the optimal network expansion and the optimal zonal configuration of zonal pricing electricity markets, which is an extension of the model discussed in [25] that does not include a network design problem. The two classical discrete optimization … Read more

Optimal Price Zones of Electricity Markets: A Mixed-Integer Multilevel Model and Global Solution Approaches

Mathematical modeling of market design issues in liberalized electricity markets often leads to mixed-integer nonlinear multilevel optimization problems for which no general-purpose solvers exist and which are intractable in general. In this work, we consider the problem of splitting a market area into a given number of price zones such that the resulting market design … Read more