An electricity day-ahead market simulation model

Abstract

Several years have passed since the first efforts to restructure the electricity sector. Today many countries have already introduced electricity restructuring reform laws, a process commonly referred as deregulation. The arguments for deregulation include expected increased competition, new system efficiency, lower average costs to consumers and the promise of future improvement as markets grow in size and sophistication. The restructuring process has gone beyond the point of no return. In the European Union there are clear directives that impose the member states deadlines to implement competitive markets. Such is the case of Portugal and Spain, whose governments have decided to establish an Iberian electricity market. This paper presents a simulation prototype of a competitive daily market, including pool and bilateral transactions, inspired on the system that has been successfully performing in Spain. The simulator provides users a means to obtain a deeper knowledge and awareness of a competitive electricity market.