Munich Personal RePEc Archive

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.

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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.

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