Bilateral Transactions Considering Long Term Contracts

J. J. Ruiz Monroy, H. Kita, E. Tanaka, and J. Hasegawa (Japan)


Bilateral Transactions, Deregulation, Firm Contracts, ISO


This paper presents a method for calculating the effects of firm contracts in the day ahead bilateral transaction market, considering electricity as a heterogeneous product traded in bilateral auctions where both buyers and sellers can bid a price for electricity. In this paper, firm contracts represent long term bilateral contracts and the effects of these contracts on the day ahead market are studied by means of an algorithm developed by the authors. The algorithm includes a bidding process and a linear programming approach to find an optimal Bilateral Transaction Matrix (BTM) that satisfies all the demand. The simulation was made using the IEEE 300 bus system considering several scenarios for firm contracts. Results show the benefits that firm contracts have in the prevention of price volatility.

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