Implications of Generation Bidding on the Mexican Wholesale Electricity Market

Abstract

Different rules are established in the electricity markets to define bidding formats. A usual strategy is the piecewise linear approximation (PWL) of the quadratic cost curves of the generating units. However, it is important to keep in mind that various approaches can be obtained from the PWL methods, which lead to different results. This article presents a comparative study of the effect on Unit Commitment (UC) and their level of dispatch when three different PWL methods are applied under Mexican electricity market rules and different scenarios. The purpose of these numerical tests is to show the way in which the methodology to calculate the PWL offers affects the order and priority in the UC.