Empirical electricity price modelling
Hanjie Chen and John N. Jiang discuss how system-wide load-capacity ratio and system-wide generation forced outages impact day-ahead electricity spot price and show how to incorporate these two key factors in the price modelling
Modelling the day-ahead electricity spot market price is important for the valuation of financial transactions in competitive electricity markets. Many time series models have been proposed. In the power market, the spot price of electricity can be affected by certain predictable economic factors such as system-wide capacity level, load level, or generation outages. As a consequence, simple curve-fitting models which do not take into consideration the important economic factors sometimes do not
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