Information Uncertainty in Electricity Markets: Introducing Probabilistic Offers
Abstract
We propose a shift from the current paradigm of electricity markets treating stochastic producers similarly to conventional ones in terms of their offers. We argue that the producers’ offers should be probabilistic to reflect the limited predictability of renewable energy generation, while we should design market mechanisms to accommodate such offers. We argue that the transition from deterministic offers is a natural next step in electricity markets, by analytically proving our proposal’s equivalence with a two-price conventional market.
Info
Journal Article, 2016
UN SDG Classification
DK Main Research Area
Science/Technology
