Spot Electricity Price Dynamics of Indian Electricity Market
Spot Electricity price in a competitive electricity market is determined by the intersection of total demand curve (constructed from aggregated demand bids) and total supply curve (constructed from aggregated supply bids) for a particular hour for each region of the electricity market as bidded in a power/energy exchange. Spot electricity price curve usually exhibit characteristics such as multiple seasonality, volatility, mean reversion and are often characterized by jumps or spikes. In this study we review short term spot electricity price modeling and forecasting techniques inspired by financial econometric literature, electricity spot price pre-processing techniques used and the determinants of spot electricity price in a competitive power market. We also investigate the dynamics of spot electricity prices of Indian Electricity market which has never been done before. The results of the study provide crucial insights for pricing electricity derivatives which will be introduced shortly as announced by Indian Energy Exchange in Competitive Indian power market.
KeywordsSpot Electricity Price Indian Electricity Market Energy Exchange
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