A Revenue and Profit Evaluation Method Based on the Equivalent Load Duration Curve for Electricity Market Simulations

Abstract

This article presents an efficient algorithm for evaluating the profit and revenue of generating units in a competitive electricity market based on a variant probabilistic production costing technique considering the forced outages of generators. The accurate evaluation of the profit and revenue of generating units for long-term perspectives is one of the most important issues in a competitive electricity market environment. For efficient and exact calculation of the profit and revenue of generating units under the equivalent load duration curve, a new approach to figure out the marginal plants and the corresponding market clearing prices during a time period in a probabilistic manner is developed. The mathematical formulation and an illustrative application of the suggested method is presented. Also, the results obtained from the suggested method for the IEEE Reliability Test System are compared with those of the conventional chronological simulation technique enumerating all possible states and a Monte Carlo simulation.