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Pricing Energy and Ancillary Services in a Day-Ahead Market for a Price-Taker Hydro Generating Company Using a Risk-Constrained Approach

Author

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  • Perica Ilak

    (Faculty of Electrical Engineering and Computing, University of Zagreb, Unska 3, Zagreb HR-10000, Croatia)

  • Slavko Krajcar

    (Faculty of Electrical Engineering and Computing, University of Zagreb, Unska 3, Zagreb HR-10000, Croatia)

  • Ivan Rajšl

    (Faculty of Electrical Engineering and Computing, University of Zagreb, Unska 3, Zagreb HR-10000, Croatia)

  • Marko Delimar

    (Faculty of Electrical Engineering and Computing, University of Zagreb, Unska 3, Zagreb HR-10000, Croatia)

Abstract

This paper analyzes a price-taker hydro generating company which participates simultaneously in day-ahead energy and ancillary services markets. An approach for deriving marginal cost curves for energy and ancillary services is proposed, taking into consideration price uncertainty and opportunity cost of water, which can later be used to determine hourly bid curves. The proposed approach combines an hourly conditional value-at-risk, probability of occurrence of automatic generation control states and an opportunity cost of water to determine energy and ancillary services marginal cost curves. The proposed approach is in a linear constraint form and is easy to implement in optimization problems. A stochastic model of the hydro-economic river basin is presented, based on the actual Vinodol hydropower system in Croatia, with a complex three-dimensional relationship between the power produced, the discharged water, and the head of associated reservoir.

Suggested Citation

  • Perica Ilak & Slavko Krajcar & Ivan Rajšl & Marko Delimar, 2014. "Pricing Energy and Ancillary Services in a Day-Ahead Market for a Price-Taker Hydro Generating Company Using a Risk-Constrained Approach," Energies, MDPI, vol. 7(4), pages 1-26, April.
    • Handle: RePEc:gam:jeners:v:7:y:2014:i:4:p:2317-2342:d:35035
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    Cited by:

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    2. Lin Herenčić & Perica Ilak & Ivan Rajšl, 2019. "Effects of Local Electricity Trading on Power Flows and Voltage Levels for Different Elasticities and Prices," Energies, MDPI, vol. 12(24), pages 1-19, December.
    3. Sara Raos & Perica Ilak & Ivan Rajšl & Tena Bilić & Ghislain Trullenque, 2019. "Multiple-Criteria Decision-Making for Assessing the Enhanced Geothermal Systems," Energies, MDPI, vol. 12(9), pages 1-23, April.
    4. Mario Klarić & Igor Kuzle & Ninoslav Holjevac, 2018. "Wind Power Monitoring and Control Based on Synchrophasor Measurement Data Mining," Energies, MDPI, vol. 11(12), pages 1-23, December.
    5. Perica Ilak & Lin Herenčić & Ivan Rajšl & Sara Raos & Željko Tomšić, 2021. "Equilibrium Pricing with Duality-Based Method: Approach for Market-Oriented Capacity Remuneration Mechanism," Energies, MDPI, vol. 14(3), pages 1-19, January.
    6. Ilak, Perica & Rajšl, Ivan & Krajcar, Slavko & Delimar, Marko, 2015. "The impact of a wind variable generation on the hydro generation water shadow price," Applied Energy, Elsevier, vol. 154(C), pages 197-208.
    7. Abiodun, Kehinde & Hood, Karoline & Cox, John L. & Newman, Alexandra M. & Zolan, Alex J., 2023. "The value of concentrating solar power in ancillary services markets," Applied Energy, Elsevier, vol. 334(C).
    8. Perica Ilak & Ivan Rajšl & Josip Đaković & Marko Delimar, 2018. "Duality Based Risk Mitigation Method for Construction of Joint Hydro-Wind Coordination Short-Run Marginal Cost Curves," Energies, MDPI, vol. 11(5), pages 1-12, May.
    9. Schillinger, Moritz & Weigt, Hannes & Barry, Michael & Schumann, René, 2017. "Hydropower Operation in a Changing Market Environment A Swiss Case Study," Working papers 2017/19, Faculty of Business and Economics - University of Basel.
    10. Raveendran, Visal & Alvarez-Bel, Carlos & Nair, Manjula G., 2020. "Assessing the ancillary service potential of electric vehicles to support renewable energy integration in touristic islands: A case study from Balearic island of Menorca," Renewable Energy, Elsevier, vol. 161(C), pages 495-509.

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