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

See all articles by Jan Abrell

Jan Abrell

ETH Zurich

Friedrich Kunz

German Institute for Economic Research (DIW Berlin)

Hannes Weigt

WWZ, Wirtschaftswissenschaftliche Fakultät der Universität Basel

Date Written: July 8, 2008

Abstract

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

Abrell, Jan and Kunz, Friedrich and Weigt, Hannes, Start Me Up Modeling of Power Plant Start-Up Conditions and Their Impact on Prices (July 8, 2008). Electricity Markets Working Paper No. WP-EM-28. Available at SSRN: https://ssrn.com/abstract=1156922 or http://dx.doi.org/10.2139/ssrn.1156922

Jan Abrell

ETH Zurich ( email )

Zürichbergstrasse 18
Zurich, 8032
Switzerland

HOME PAGE: http://www.janabrell.de

Friedrich Kunz

German Institute for Economic Research (DIW Berlin) ( email )

Mohrenstraße 58
Berlin, 10117
Germany

Hannes Weigt (Contact Author)

WWZ, Wirtschaftswissenschaftliche Fakultät der Universität Basel ( email )

Basel, 4051
Switzerland

HOME PAGE: http://fonew.unibas.ch/

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