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.

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