Bidding in Danish Electricity Markets

Specialeforsvar ved Emilie Christine Werner Popp

Titel: Bidding in Danish Electricity Markets

Abstract: 
This project investigates the differences between a continuous and a discrete market clearing setup in the Danish energy system. First a bi-level model is examined where an agent profit optimizes subject to a common market clearing dependent on the behavior of other agents. The bi-level model is examined in two cases, one with a continuous market clearing and one with a discrete market clearing. Both models are extended to inspect bidding incentives for agents in two scenarios, one where there is no restrictions on bundling and one where there is restrictions on bundling. The investigation shows that the costs of buying electricity to cover demand in a continuous market clearing are higher when no restrictions are imposed on bundling. In the discrete case the same pattern is seen to an even greater extent where it can lead to overbuying. The models are then extended to EPEC models which are solved by the Gauss-Seidel algorithm. In the EPEC models it is shown that the costs of covering demand will be higher in a market with discrete market clearing compared to a market with continuous market clearing.

Vejleder: Trine Krogh Boomsma

Censor: Pierre Pinson