Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/296738 
Year of Publication: 
2023
Series/Report no.: 
ESRI Working Paper No. 766
Publisher: 
The Economic and Social Research Institute (ESRI), Dublin
Abstract: 
The costs associated with electricity generation include costs that are independent of their marginal output, including the cost of starting their units, and constraints such as minimum generation levels. Modelling these costs and constraints requires integer formulation of the units, and so they have typically been ignored in electricity market modelling and simulation to date. We develop a stochastic equilibrium model to include these costs and constraints in a Cournot model and solve it using the Gauss-Seidel diagonalization algorithm. We apply the model to the power system of the island of Ireland with varying levels of variable renewable power generation. We find that the impacts of integer modelling are non-trivial, and are heterogeneous across firms and wind levels. Furthermore, excluding integer modelling exaggerates the impact of price-making behaviour. We conclude that neglecting integer constraints in power system market models leads to inaccurate results, particularly at high penetrations of renewable energy sources.
Subjects: 
OR in energy
Cournot modelling
Unit commitment
Document Type: 
Working Paper

Files in This Item:
File
Size
963.69 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.