Price Chain Analysis from Primary Energy Prices to Electricity Market Clearing Prices

The recent boost of primary energy prices (PEP) exerts considerable influence on the electricity market clearing prices (EMCP), which in turn affects the energy production and consumption. This paper proposes a novel price chain analysis model to investigate the correlation between PEP and EMCP. In particular, we first establish a correlation model to quantitatively analyze the impact of PEP on power generation cost. Then, a market clearing model is developed incorporating the variation of PEP in the objective function. Furthermore, various network, generation, and flexible load operating constraints are considered and relaxed to construct the Lagrangian function. Consequently, the corresponding KKT conditions are derived, and the EMCP is further expressed as a function of PEP and congestion cost. Finally, the proposed model is tested on an IEEE 30-bus transmission network on the platform GAMS, and the numerical results verify the effectiveness of the proposed model.