1. Obtain offers Tendering
2. Scenario evaluation Total cost optimization
Independent producers
3. Detailed design Test by simulations
P
5. Contracts For new producers (and customers)
4. Concept validation Test by market algorithms & simulations
Fig 5. Capacity market process The capacities are planned in five phases. In phase 1, offers are obtained from independent producers. In phases 2-4, the optimal set of the different offers for supply is developed, designed, and tested in an internal iterative procedure. In phase 5, contracts are entered..
Cost-optimal operation of the plants If the ownership of the system is split into multiple companies, suboptimization must be avoided in the operative planning. Therefore, the cost-by-cause principle is introduced to the short-term markets:
When long-term contracts are entered, flexible pricing mecha- nisms must be used. This includes two price elements–one for capacity (thermal power) and one for thermal energy. Both must consider price revision clauses to allow long-term adjustments of costs. Once a contract is entered, the single buyer will pay the thermal power price for the whole duration of the contract. The energy price element is based on the contract concept for differ- ences to allow for short-term price adjustments. This energy price will only be paid if the plant is selected at the short-term markets.
Besides the costs for production, the costs for transportation (electricity demand of the pumps) should also be considered.
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Figure 6. Smart market dispatch model Smart markets consider physical effects that induce costs in the market clearing algorithm. The DHS is transferred to a dispatch model based on nodes and edges. Energy centers and customers are connected to the nodes. The edges represent the pipes, including the costs for transmission, heat losses, and temperatures. This model is used inside the smart market to minimize the variable costs, including all cost-causing effects.
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