Trading in power exchanges with consideration of the cost of generation scheduling under the new electricity trading arrangements

Abstract

This paper presents an optimisation method for the trading in power exchanges (PXs) with the consideration of the cost of generation scheduling under the new electricity trading arrangements (NETA) in the electricity market of England and Wales. The power exchange market, running parallel to NETA since its implementation, allows market participants to adjust their contract positions in real time to avoid any excess or shortfall in the balancing mechanism (BM) by submitting bids or offers. With bids and offers present in PXs, generating companies have opportunities to gain profit from this market. A proposed methodology is able to optimise power exchange and generation scheduling problems simultaneously, thereby assisting generating companies to decide which bids or offers should be carried out, and to commit and dispatch their units to meet their net contract positions. The methodology will be demonstrated by a 5-unit power system.