THE ELECTRICITY PRODUCERS BID PRICES FORMATION BASED

ON PROFITABILITY

PhD student, M. sc. ing. Umbrashko I.

PhD student, M. sc. ing. Varfolomeyeva R.

Dr. sc. ing. prof. Mahnitko A.

Costs for hourly electricity production

– energy resources cost, for example, fuel including delivery and technical preparation;

– parameters of cost characteristics C(Pi).

)()()( 2,, iiiiiiRiiRi PPCPCCPC

iRC ,

iii ,,

The daily chart of an energy price change in a competitive electricity market

The technicaly-economicaly charecteristics of an agregate

iRi

iiR

i

i CP

PCC

P

PC,,

)()(

ieli PCPR )(

0)(el

i

i CP

PR

At the point O

020

200

0

P

PPP

0P

The example

MW1200

P

Ls410 Rel CC

The profit and production volume comparison

a) The price increases up to 45 Ls

b) The price increases up to 48 Ls

c) The price increases up to 50 Ls

MW1350 PMW1500 PMW1550 P

The production profitability

%.100)(

)()()(

i

iii PC

PCPBPK

0)(

P

PKThe maximal profitability

The profit and production volume comparison

a) The price increases up to 45 Ls

b) The price increases up to 48 Ls

c) The price increases up to 50 Ls

MW1350 PMW1500 PMW1550 P

The bid price

The tree-step bid graph at profitability 17%

Conclusions

• The proposed method of producer’s bids formation of electrical energy has the following prerequisites for use in a competitive market.

• The offered method reflects mostly technical side of electricity production.

• This model allows for provider to determine the optimal behavior’s strategy on a daily interval through applied hourly bids with accounting equipment start-up characteristics.

• When is starting the balancing sector these principles of strategy making should be reconsidered taking into account additional factors as: adjustment range and maneuvering characteristics of the generators.

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