Presented by Gavin Bell (CEO at Optimeering AS)
Markets are increasingly being used in industry and organizations to procure goods and services that are provided or consumed in defined time intervals or specific volumes.
An important example of this are products and services in electricity markets, such as power reserve capacity and energy. Markets for so-called primary, secondary and tertiary capacity reserve are currently being developed in the Nordic power markets and are proposed or under development for a number of other European power markets. Such markets are often characterized by multiple, complex products. Bids may be linked over time and across products. Procurement can be driven by multiple objectives such as price and security of supply, that may be difficult to define quantitatively and difficult to compare.
There are often multiple stakeholders involved with differing backgrounds, assumptions, agendas and goals. Existing legal frameworks and rules may also constrain the market and its clearing and pricing processes. Mathematically, the markets are often mixed-integer non-convex, which poses significant challenges in designing and implementing market clearing algorithms in practice.
In this presentation, I talk about our experience in developing and implementing clearing algorithms for these types of markets and for calculating clearing prices, with a focus on market clearing for power reserve services.