TOOLS AND METHODOLOGIES FOR POWER SYSTEMS PLANNING, OPERATION AND MARKET STUDIES IN ELECTRICITY MARKETS

Several countries around the world have implemented reforms in their power sectors, with emphasis on competition and private investment. Although the details of the regulatory frameworks change in each country, their overall organization in most cases follows the same principles, known as the “standard model”. One of the basic features in the standard model is a short-term electricity market, where energy sales and purchases are settled on an hourly basis. In a simplified way, the short-term market works as follows: (i) at the end of each day, generators and loads submit price and quantity bids for each hour of the following day; (ii) an equilibrium process is then simulated, where the settlement price, or spot price, is adjusted until total dispatched generation is equal to total load; (iii) the energy produced by the dispatched generators (consumed by load agents) is remunerated (charged) based on the system marginal price. The existence of a bid-based dispatch/settlement poses complex technical challenges for both bidders and regulators. For each bidder, the main questions are: (i) how to develop bidding strategies that maximize their expected net revenue with risk profiles; (ii) how to establish contracting limits for energy sales of hydro plants; (iii) how to couple the physical operation schedule of power plants with a market system and (iv) how to forecast market prices. The objective of this work is to propose a set of decision support tools for electricity and gas markets