Abstract
In this chapter, we outline and review the application of simulation on the generation offer and consumption bids for the New Zealand electricity market (NZEM). We start by describing the operation of the NZEM with a particular focus on how electricity prices are calculated for each time period. The complexity of this mechanism, in conjunction with uncertainty surrounding factors such as consumption levels, motivates the use of simulation. We will then discuss simulation–optimization methods for optimal offer strategies of a generator, for a particular time period, in the NZEM. We conclude by extending our ideas and techniques to consumption bids and interruptible load reserve offers for major consumers of electricity including large manufacturers such as the steel mill.
Keywords
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Notes
- 1.
References
Alvey, T., Goodwin, D., Ma, X., Streiffert, D., Sun, D.: A security-constrained bid-clearing system for the New Zealand wholesale electricity market. IEEE Trans. Power Syst. 13(2), 340–346 (1998)
Anderson, E.J., Philpott, A.B.: Optimal offer construction in electricity markets. Math. Oper. Res. 27(1), 82–100 (2002)
Anderson, E.J., Philpott, A.B.: Using supply functions for offering generation into an electricity market. Oper. Res. 50(3), 477–489 (2002)
Anderson, E.J., Philpott, A.B.: Estimation of electricity market distribution functions. Ann. Oper. Res. 121, 21–32 (2003)
Bazaraa, M., Sherali, H., Shetty, C.M.: Nonlinear Programming Theory and Algorithms. Wiley, New York (1993)
Borenstein, S., Jaske, M., Rosenfeld, A.: Dynamic pricing, advanced metering, and demand response in electricity markets. Center for the Study of Energy Markets (2002)
Cleland, N., Zakeri, G., Pritchard, G., Young, B.: a model for load consumption and reserve offers in reserve constrained electricity markets. Comput. Manag. Sci. 12(4), 519–537 (2015)
Cleland, N., Zakeri, G., Pritchard, G., Young, B.: Integrating consumption and reserve strategies for large consumers in electricity markets. Lecture Notes in Economics and Mathematical Systems, vol. 682, pp. 23–30 (2016)
Conejo, A.J., Contreras, J., Arroyo, J.M., de la Torre, S.: Optimal response of an oligopolistic generating company to a competitive pool-based electric power market. IEEE Trans. Power Syst. 17(2), 424–430 (2002)
de la Torre, S., Arroyo, J.M., Conejo, A.J., Contreras, J.: Price maker self-scheduling in a pool-based electricity market: a mixed integer LP approach. IEEE Trans. Power Syst. 17(4), 1037–1042 (2002)
Ela, E., Milligan, M., Kirby, B.: Operating reserves and variable generation: a comprehensive review of current strategies, studies, and fundamental research on the impact that increased penetration of variable renewable generation has on power system operating reserves. Technical Report NREL/TP-5500-51978, NREL, NREL (2011)
Ellison, J.F., Tesfatsion, L.S., Loose, V.W., Byrne, R.H.: Project report: a survey of operating reserve markets in US ISO/RTO-managed electric energy regions. Sandia Natl Labs Publications. http://www.sandia.gov/ess/publications/SAND2012_1000.pdf (2012). Accessed 21 Feb 2017
Green, R.J., Newbery, D.M.: Competition in the british electricity spot market. J. Politi. Econ. 100(5), 929–53 (1992)
Klemperer, P., Meyer, M.: Supply function equilibria in oligopoly under uncertainty. Econometrica 57(6), 1243–1277 (1989)
Lobato Miguelez, E., Egido Cortes, I., Rouco Rodrguez, L., Lopez Camino, G.: An overview of ancillary services in Spain. Electr. Power Syst. Res. 78(3), 515–523 (2008)
Luo, Z.Q., Pang, J.S., Ralph, D.: Mathematical Programs with Equilibrium Constraints. Cambridge University Press, Cambridge (1996)
Oren, S.S., Spiller, P.T., Varaiya, P., Wu, F.: Nodal prices and transmission rights: a critical appraisal. Electr. J. 8(3), 24–35 (1995)
Pereira, M., Pinto, L.: Multi-stage stochastic optimization applied to energy planning. Math. Program. 52, 359–375 (1991)
Philpott, A., Ferris, M., Wets, R.: Equilibrium, uncertainty and risk in hydro-thermal electricity systems. Math. Program. 157(2), 483–513 (2016)
Philpott, A.B., Guan, Z.: On the convergence of stochastic dual dynamic programming and related methods. Oper. Res. Lett. 36(4), 450–455 (2008)
Pritchard, G.: Optimal offering in electric power networks. Pac. J. Optim. 3(3), 425–438 (2007)
Pritchard, G., Zakeri, G., Philpott, A.B.: Nonparametric estimation of market distribution functions in electricity pool markets. Math. Oper. Res. 3(3), 621–636 (2006)
Ralph, D., Smeers, Y.: Risk trading and endogenous probabilities in investment equilibria. SIAM J. Optim. 25(4), 2589–2611 (2015)
Schweppe, F., Caramanis, M., Tabors, R., Bohn, R.: Market Operations in Electric Power Systems. Kluwer, Boston (1988)
Author information
Authors and Affiliations
Corresponding author
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 2018 Springer International Publishing AG, part of Springer Nature
About this paper
Cite this paper
Zakeri, G., Pritchard, G. (2018). A Review of Simulation Usage in the New Zealand Electricity Market. In: Pilz, J., Rasch, D., Melas, V., Moder, K. (eds) Statistics and Simulation. IWS 2015. Springer Proceedings in Mathematics & Statistics, vol 231. Springer, Cham. https://doi.org/10.1007/978-3-319-76035-3_2
Download citation
DOI: https://doi.org/10.1007/978-3-319-76035-3_2
Published:
Publisher Name: Springer, Cham
Print ISBN: 978-3-319-76034-6
Online ISBN: 978-3-319-76035-3
eBook Packages: Mathematics and StatisticsMathematics and Statistics (R0)