Study On Ex-post Pricing Mechanisms Of Real Time Power Market

Real-time power market eliminates the imbalance power through organizing real-time trades, so it plays an important role of maintaining the security and stability of power system. Settlement mechanism determines the flow of money, guides the behavior of participants. Therefore, it is an important part of real-time market. At present real-time market mainly uses two kinds of settlement mechanism: ex ante price settlement mechanism and ex post price settlement mechanism. The former one is settling imbalance power by ex ante price, which is calculated simple and easy to understand, but cannot reflect true cost of electricity and lead to strategy output easily. The latter one is settling imbalance electricity by ex post price, which can stimulate units to comply dispatching order, but calculated complex and difficult to understand. Except PJM, New England and California real time power market using ex post price settlement mechanism, other real time power market adopt ex ante price settlement mechanism. Researching settlement mechanism deeply, especially ex post price, is of great significance to strengthen the stability and orderliness of real time power market by economic means.By comparing two kinds of settlement mechanism, this paper points out that unit that is driven by profit maximization will violate dispatching order deliberately, if its output is settled by ex ante price. Violation acts will be punished if unit's output is settled by ex post price. So ex post price will incite unit comply with dispatching order. Principle-agent theory, the economic theory foundation of ex post price, has been present in this paper. Through the establishment of ex post pricing mechanism model that based on principal-agent theory, ideal ex post price formula has been deduced and compared with the actual ex post pricing mechanism. Through the formula derivation and numerical example, these two ex post pricing mechanisms have been analyzed in the effect of inciting unit to comply with dispatching orders. Calculation cases demonstrate that the result of ex post pricing mechanism is better than that of ex ante pricing mechanism.Electricity network transmission limitation is an important feature that power market is different from other commodity markets. The latter part of this paper focuses on the impact of congestion on ex post price. When transmission constrained, actual ex-post price is sometimes greater than ex-ante price, because of high congestion price. Although congestion price provides economic signals, high congestion price will be a burden to users, result in the exercise of market power and weaken the stability of power system. High congestion price is the inherent problem of LMP, regardless of ex-ante price or ex-post price. In traditional opinion, high congestion price due to high bids by units in congestion areas. However, low bids by units outside congestion areas also cause high congestion price. Therefore, through the specific analysis of congestion price, concept of sensitivity of bid to congestion has been present. According to the sensitivity of bid to congestion, ISO can judge the trend of bidding, and set the maximum limit and minimum limit of bids relevantly, thereby reducing the congestion pricing and restricting the behavior of strategy bidding.