Electricity Pricing for Renewable Markets- A Simulation Approach for the Colombian Case



Bidding Strategy, Electricity Markets, Electricity Prices, Power System Economics, Renewables


An important technological transformation is taking place in the electricity markets. Increases in the use of non-conventional renewable sources for electricity generation is challenging the system reliability, especially from the supplier’s perspective. This context stands out the need to seek market designs and electricity pricing schemes that favor the proper functioning of markets, contributing to the system sustainability and social welfare. This work develops a simulation model that allows evaluating different electricity market designs and pricing schemes under different scenarios of non-conventional renewable sources penetration, using the Colombian electricity market as an application case.  Schemes are evaluated under six indicators including price volatility, maximum electricity prices, unattended system demand, average usage of thermal sources, CO2 emissions and generation surpluses. Model results reveal that the market designs and pricing schemes that use levelized costs of electricity provide a favorable performance of the electricity market when the installed capacity of renewable sources increases, considering price volatilities, system CO2 emissions and demand coverage.


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Author Biographies

Johandre Vargas, Universidad Nacional de Colombia

Johandre Vargas es Magíster en Ingeniería – Sistemas Energéticos desde 2020 e Ingeniero Electricista desde el año 2013 de la Universidad Nacional de Colombia -Sede Medellín. Actualmente es estudiante de Maestría en Big data & Business Analytics de la Universidad Isabel I de España y profesional en Aseguramiento de la Operación comercial en una empresa generadora de energía.

Carlos Jaime Franco, Universidad Nacional de Colombia

Carlos J. Franco es Doctor en Ingeniería de Sistemas Energéticos de la Universidad Nacional de Colombia – sede Medellín, Magíster en Administración de Recursos Hídricos e Ingeniero Civil. Actualmente, se desempeña como profesor titular del departamento de Ciencias de la Computación y de la Decisión de la Universidad Nacional de Colombia – sede Medellín. Sus áreas de investigación incluyen sistemas complejos, modelado y simulación de mercados de energía, evaluación de políticas y formulación de estrategias para el sector energético. Su trabajo reciente incluye análisis de economías bajas en carbono, respuesta de la demanda, integración de mercados eléctricos y difusión de energías limpias, entre otros.

Maritza Jiménez, Universidad Pontificia Bolivariana, Universidad Nacional de Colombia

Maritza Jiménez es Magíster en Ingeniería – Sistemas Energéticos desde el año 2016, Ingeniera Administradora desde el año 2014, y actualmente es candidata a doctora del programa de doctorado en Ingeniería - Sistemas de la Universidad Nacional de Colombia – Sede Medellín. Se desempeña como docente de la Universidad Pontificia Bolivariana en la Facultad de Ingeniería Industrial, y sus áreas de investigación incluyen el modelado y simulación de mercados energéticos, difusión de sistemas renovables de generación de electricidad, gestión de la demanda, microgeneración fotovoltaica, entre otros.


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How to Cite

Vargas, J., Franco, C. J., & Jiménez, M. (2021). Electricity Pricing for Renewable Markets- A Simulation Approach for the Colombian Case. IEEE Latin America Transactions, 19(12), 1995–2002. Retrieved from https://latamt.ieeer9.org/index.php/transactions/article/view/4292