Start Me Up: Modeling of Power Plant Start-Up Conditions and their Impact on Prices

Abrell, Jan and Kunz, Friedrich and Weigt, Hannes (2008): Start Me Up: Modeling of Power Plant Start-Up Conditions and their Impact on Prices.

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.

• Item Type: MPRA Paper
• Language: English
• Keywords: electricity; unit commitment; start-up costs; linear programming; mixed integer programming
• Subjects: D - Microeconomics > D6 - Welfare Economics > D61 - Allocative Efficiency ; Cost-Benefit Analysis; L - Industrial Organization > L5 - Regulation and Industrial Policy > L51 - Economics of Regulation; L - Industrial Organization > L9 - Industry Studies: Transportation and Utilities > L94 - Electric Utilities

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