fbpx Electricity Market Design: Multi-Interval Pricing Models | Harvard Kennedy School

HKS Affiliated Authors


June 22, 2020, Paper, "The basic model of bid-based, security-constrained, economic dispatch with locational prices is well understood and provides the foundation for efficient pricing.  The most common analysis is for a single period with well-behaved bids and offers without uncertainty.  With independent dispatches, serial application of this approach produces efficient prices.  The real dispatch system requires some degree of look-ahead with intertemporal constraints.  The expansion of intermittent resources increases the importance of efficient multi-period pricing.  In principle, the same model applies for the multi-period dispatch.  Relaxing any of the assumptions, however, presents new challenges for efficient pricing.  Rolling dispatches must adjust to uncertain conditions inducing changes over time.  Bids and offers with start-up, shut-down, and multiperiod operating constraints require some form of extended locational marginal pricing and associated uplift requirements.  Current practices differ across organized market.  How important are efficient multi-period prices?  What approaches might balance the current competing requirements to deal with efficiency, uncertainty and computational feasibility?  What new modeling and software innovations are on the horizon?"