Clearing algorithm for minimum income condition orders on European power exchanges

Abstract

State-of-the-art power exchange designs have to take a large set of economic and technical constraints into consideration. A specific difficulty is that most power generators have non-convex characteristics, for example startup costs and minimal load during operation. Minimum income condition orders constitute a method to represent some of the power plants' corresponding economic interests on energy markets, e.g. on the proposed all-European day-ahead power exchange. However, the non-convexity of these offers can be computationally expensive. A new clearing algorithm is proposed to manage the issue effectively with advanced mathematical tools.