Forecasting energy prices in a competitive market

Author

Bastian, Jeffrey ; Zhu, Jinxiang ; Banunarayanan, Venkat ; Mukerji, Rana

Author_Institution

PJM Interconnection, LLC, Valley Forge, PA, USA

Volume

12

Issue

3

fYear

1999

fDate

7/1/1999 12:00:00 AM

Firstpage

40

Lastpage

45

Abstract

Deregulation is intended to encourage competition among utilities and power marketers to reduce energy prices. The pricing system is very critical in restructuring the electrical industry and depends upon market rules and the function of the independent system operator (ISO). The locational marginal pricing (LMP) system is in use in the Pennsylvania, New Jersey, Maryland (PJM) Interconnection ISO and is proposed for the New York ISO, which is expected to be in operation in 1999. This article provides fundamental concepts of the LMP and outlines the basic requirements for a computer simulation tool to accurately forecast prices in an LMP-based market. Examples are used to demonstrate the concepts, and some preliminary results for the Eastern Interconnection are presented

Keywords

costing; digital simulation; electricity supply industry; power system economics; power system interconnection; power system simulation; Eastern Interconnection; MAPS program; Pennsylvania-New Jersey-Maryland Interconnection; competitive market; computer simulation tool; deregulation; electric utilities; electrical industry restructuring; energy prices forecasting; energy prices reduction; independent system operator; locational marginal pricing system; power marketers; pricing system; Analytical models; Costs; Economic forecasting; ISO; Load forecasting; Power generation; Power generation economics; Predictive models; Pricing; Propagation losses;

fLanguage

English

Journal_Title

Computer Applications in Power, IEEE

Publisher

ieee

ISSN

0895-0156

Type

jour

DOI

10.1109/67.773811

Filename

773811