Bids/Offers and Final Energy Prices

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Last post 29 July 2024

Stratos Avramidis posted this 23 July 2024 - Last edited 23 July 2024

Hello,

I try to understand how the demand and supply schedule, hence the price formation, are related to the Bids and Offers files found at this link: Electricity Authority - EMI (market statistics and tools) (ea.govt.nz)

What puzzles me is that while for each trading period of each day a final price for every node (242 nodes) is calculated (as can be seen at Electricity Authority - EMI (market statistics and tools) (ea.govt.nz)), the respective Bids and Offers files do not contain buy and sell orders for all the nodes for the same day.

Moreover, the Bids and Offers files do not contain the same nodes, I assume this happens because generators submit offers for Grix Injection Points while buyers submit bids for Grid Exit Points. However, even if this is the case, how are prices formatted if we do not have both supply and demand for each node?

Thanks in advance.

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Phil Bishop posted this 29 July 2024

Hello Stratos

There is a lot to the question that you ask and I do not have time to answer it comprehensively. But I will give you a few pointers.

Prices in the New Zealand wholesale electricity market are determined using a model called SPD. The Authority has a mathematical replica of SPD that we call vSPD. You can read more about the models and the data they require here, here, and here. The SPD model has about 600 nodes or points at which the model will yield a shadow price. About 240-250 of these nodes with shadow prices are taken to be the wholesale market prices - see the Final energy prices folder here.

Not all purchasers are required to submit bids to purchase from the wholesale market. The system operator produces forecasts of load and only those purchasers whose load profile does not conform to the forecast profile are required to submit bids. Suppliers that meet the criteria to be dispatched by the systemm operator must submit offers. The model will produce a price at all nodes but not all nodes have offers to supply submitted. Nodes are connected via transmission links, therefore nodal prices will differ due to losses (or sometimes transmission constraints).

I hope this helps to get you started.

Phil

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