Optimising the relationship of electricity spot price to real-time input data

Abstract

Electrical power is paid for at a marginal price calculated by an optimisation to minimise the total cost of generation based on bids made by the power generation companies and consumer requirements. Generation companies are paid on the marginal rate (the level of the highest bid accepted) determined at their location. Similarly bulk power consumers are charged on the marginal price of supply at their location, which includes costs related to delivery to the user’s location.