Economic impact of price forecasting inaccuracies on self-scheduling of generation companies

This paper studies the economic impact of using inaccurate price forecasts on self-scheduling of generation companies (GenCos) in a competitive electricity market. Four alternative sets of price forecasts are used in this study which have different levels of accuracy. The economic impact of price forecast inaccuracies is calculated by comparing the economic benefits of the GenCos in two self-scheduling scenarios. In the first scenario, electricity market price forecasts are used to optimally schedule the GenCos' next day operation. In the second scenario, perfect price forecasts, i.e., actual market prices, are used for self-scheduling of the GenCos. Two indices are utilized to quantify the differences in the economic benefits of the GenCos under the two scenarios. Simulation results are provided and discussed for two typical and inherently different GenCos, i.e., a hydro-based producer and a thermal-based producer.