Optimal electricity market bidding strategies considering emission allowances

Publication TypeProceedings Article
Year of Publication2012
AuthorsCristina Corchero; F.-Javier Heredia; Julián Cifuentes
Conference Name2012 9th International Conference on the European Energy Market (EEM 2012)
Series TitleIEEE Conference Publications
Conference Start Date10/05/2012
Conference LocationFlorence
ISSN Number-
ISBN Number978-1-4673-0834-2
Key Wordsresearch; elecriticy; markets; CO2 allowances; emissions limits; environment; stochastic programming; modeling languages; paper
AbstractThere are many factors that influence the day-ahead market bidding strategies of a GenCo in the current energy market framework. In this work we study the influence of both the allowances and emission reduction plan and the incorporation of the derivatives medium-term commitments in the optimal generation bidding strategy to the day-ahead electricity market. Two different technologies have been considered: the coal thermal units, high-emission technology, and the combined cycle gas turbine units, low-emission technology. The operational characteristics of both kinds of units are modeled in detail. We deal with this problem in the framework of the Iberian Electricity Market and the Spanish National Emissions and Allocation Plans. The economic implications for a GenCo of including the environmental restrictions of these National Plans are analyzed.
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