Electricity market pricing concepts explained

Dispatch and market pricing outcomes in variations of economic dispatch

The Pluto.jl notebooks below explore pricing outcomes in central dispatch electricity markets such as the Australian National Electricity Market.

Co-optimised reserves and opportunity costs

This notebook:

  1. Explains how prices are generated from economic dispatch
  2. Provides an example how co-optimising reserve and energy markets can:
    • Allow total system costs to be minimised
    • Ensure that reserve market pricing accounts for market participants’ opportunity-costs1

Multi-period dispatch

This notebook explores unintuitive pricing outcomes associated with multi-period dispatch.

The majority of central-dispatch electricity markets (such as the National Electricity Market) are operated using single-period dispatch. However, several electricity markets in the US have adopted some form of multi-period dispatch and pricing to better consider system needs against inter-temporal resource constraints (in particular, net demand ramps and unit ramping constraints).

Footnotes

  1. The otherwise foregone “profit” that a participant may have received if they had provided energy instead of reserves↩︎

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