Start Me Up Modeling of Power Plant Start-Up Conditions and Their Impact on Prices
Electricity Markets Working Paper No. WP-EM-28
16 Pages Posted: 9 Jul 2008 Last revised: 16 Jul 2008
Date Written: July 8, 2008
In this paper we compare different approaches to account for start-up costs when modeling electricity markets. We restrict the model formulation to either linear or mixed integer problems in order to guarantee a robust solution. The results indicate that the choice of the model has a significant impact on the resulting market prices and company profit. The models either calculate higher peak prices or prices below marginal costs in off-peak periods but not both. Furthermore, the models perform differently when we apply a large sample, the number of equations having an important impact. We conclude that different model formulations respond particularly to specific modeling questions.
Keywords: electricity, unit commitment, start-up costs, linear programming, mixed integer programming
JEL Classification: L94, L51, D61
Suggested Citation: Suggested Citation