On some advantages of convex hull pricing for the European electricity auction

Stevens, Nicolas; Smeers, Yves; Papavasiliou, Anthony

dc.contributor.author	Stevens, Nicolas
dc.contributor.author	Smeers, Yves
dc.contributor.author	Papavasiliou, Anthony
dc.date.accessioned	2024-04-24T07:03:58Z
dc.date.available	2024-04-24T07:03:58Z
dc.identifier.uri	https://dspace.lib.ntua.gr/xmlui/handle/123456789/59263
dc.identifier.uri	http://dx.doi.org/10.26240/heal.ntua.26959
dc.rights	Αναφορά Δημιουργού 3.0 Ελλάδα	*
dc.rights.uri	http://creativecommons.org/licenses/by/3.0/gr/	*
dc.subject	Convex hull pricing	en
dc.subject	Non-uniform pricing	en
dc.subject	Non-convexities	en
dc.subject	European electricity market	en
dc.title	On some advantages of convex hull pricing for the European electricity auction	en
heal.type	journalArticle
heal.classification	Energy economics	en
heal.access	free
heal.recordProvider	ntua	el
heal.publicationDate	2024
heal.bibliographicCitation	Stevens, N., Papavasiliou, A., & Smeers, Y. (2024). On some advantages of convex hull pricing for the European electricity auction. Energy Economics, 107542.	en
heal.abstract	Since the liberalization of the power sector and the creation of wholesale electricity markets, the question of how to price the non-convexities that are present in the market has attracted the interest of both academics and practitioners. Over the years, US markets have studied and adopted different and evolving pricing rules. Since the “Trilateral Market Coupling” (2006), the European day-ahead market has opted for a notably different pricing rule. Recently, EU stakeholders have undertaken research to reform it, and have indicated an interest for some approaches that are discussed in the other side of the Atlantic. Our paper aims at contributing to the debate. We analyse six different pricing methods. We establish several mathematical properties for enabling their accurate comparison. Our findings are illustrated on stylized examples and numerical simulations that are performed on realistic datasets. Both theoretical and numerical evidences that are gathered in our paper point towards the advantages of convex hull pricing.	en
heal.publisher	Elsevier	en
heal.journalName	Energy Economics	en
heal.journalType	peer-reviewed
heal.fullTextAvailability	false