Clearing algorithm for minimum income condition orders on European power exchanges

Abstract

State-of-the-art power exchange designs have to take a large set of economic and technical constraints into consideration. A specific difficulty is that most power generators have non-convex characteristics, for example startup costs and minimal load during operation. Minimum income condition orders constitute a method to represent some of the power plants' corresponding economic interests on energy markets, e.g. on the proposed all-European day-ahead power exchange. However, the non-convexity of these offers can be computationally expensive. A new clearing algorithm is proposed to manage the issue effectively with advanced mathematical tools. determine additional orders in an SSC bid set which are included in MIC but are not rejected due to MIC violations. The main purpose of SSC is to provide an opportunity of smooth stop schedule if an operating power plant's MIC cannot be satisfied on the market. The proposed model of all-European DAPX (4) includes MIC orders with optional SSC, but the description of the clearing algorithm (3) does not give reproducible details about their implementation. The non-convexity of MICs is apparent and - unlike the discrete properties of block orders - it cannot be conveniently dissolved into a series of convex subproblems (5), hence the question of the clearing efficiency is far from trivial. A MIC order formulation is presented in the second section of this paper, while the principles of the proposed clearing procedure and its implementation are outlined in the third and fourth sections, respectively. The fifth section includes the conclusions drawn.