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Towards a complete real-time electricity market design

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Abstract

The general design for the real-time electricity market presented in this paper optimizes and prices both real and reactive power simultaneously in an AC setting, where all assets—generation, load and transmission—are allowed to bid and are financially settled at the locational price times energy consumed or produced. The result is that transmission lines are compensated for both capacity and admittance, providing incentives for efficient operation of transmission-related assets such as FACTS devices, if price-taking behavior is assumed. Losses are incorporated into the design and become an operating cost for transmission. The market design is shown to be revenue neutral and, under some assumptions, nonconfiscatory.

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Authors and Affiliations

  1. Federal Energy Regulatory Commission, 888 First St NE, Washington, DC, 20426, USA

    Richard P. O’Neill

  2. Department of Geography and Environmental Engineering, The Johns Hopkins University, Baltimore, MD, 21218, USA

    Emily Bartholomew Fisher & Benjamin F. Hobbs

  3. California ISO Market Surveillance Committee, San Mateo, CA, USA

    Benjamin F. Hobbs

  4. Department of Electrical and Computer Engineering, The University of Texas at Austin, Austin, TX, USA

    Ross Baldick

Authors
  1. Richard P. O’Neill
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  2. Emily Bartholomew Fisher
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  3. Benjamin F. Hobbs
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  4. Ross Baldick
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Correspondence to Emily Bartholomew Fisher.

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O’Neill, R.P., Fisher, E.B., Hobbs, B.F. et al. Towards a complete real-time electricity market design. J Regul Econ 34, 220–250 (2008). https://doi.org/10.1007/s11149-008-9062-3

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