Optimization of Time-Based Rates in forward energy markets

This paper presents a new two-step design approach of Time-Based Rate (TBR) programs for markets with a high penetration of variable energy sources such as wind power. First, an optimal market time horizon must be determined that balances between production generation forecast accuracy and customers´ scheduling flexibility, in order to achieve a minimum system cost in forward and real-time reserve energy markets. The time horizon obtained is used as a known parameter in the subsequent design of TBR´s pricing values. Customers´ scheduling strategies modeled by price elasticity matrices along with current system conditions are considered in the price calculation process, during which system cost of the forward energy market is minimized.