Pricing Electricity in Pools With Wind Producers

Juan Miguel Morales González, A. J. Conejo, Kai Liu, Jin Zhong

    Research output: Contribution to journalJournal articleResearchpeer-review


    This paper considers an electricity pool that includes a significant number of wind producers and is cleared through a network-constrained auction, one day in advance and on an hourly basis. The hourly auction is formulated as a two-stage stochastic programming problem, where the first stage represents the clearing of the market and the second stage models the system operation under a number of plausible wind production realizations. This formulation co-optimizes energy and reserve, and allows deriving both pool energy prices and balancing energy prices. These prices result in both cost recovery for producers and revenue reconciliation. A case study of realistic size is used to illustrate the functioning of the proposed pricing scheme.
    Original languageEnglish
    JournalI E E E Transactions on Power Systems
    Issue number3
    Pages (from-to)1366-1376
    Publication statusPublished - 2012


    • power generation economics
    • pricing
    • stochastic programming
    • wind power plants


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