A Note on the Normalization of Spanish Electricity Spot Prices

Merit order of renewable generation has produced an increasing, relevant number of zero values in Spanish electricity spot prices since 2010, in contrast with the rest of markets which rarely present zero values. This letter shows that existing methodologies for normalizing the price distribution fa...

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Bibliographic Details
Published in:IEEE transactions on power systems 2016-05, Vol.31 (3), p.2499-2500
Main Authors: Diaz, Guzman, Planas, Estefania
Format: Article
Language:English
Subjects:
Analytical models
Autoregressive processes
Complexity theory
Context
Gaussian distribution
normal distributions
Numerical models
probability
Stochastic processes
time series
Time series analysis
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Summary:Merit order of renewable generation has produced an increasing, relevant number of zero values in Spanish electricity spot prices since 2010, in contrast with the rest of markets which rarely present zero values. This letter shows that existing methodologies for normalizing the price distribution fail to yield a proper normalization. This letter proposes a new algorithm based on Nataf transformation which addresses this issue and ensures a correct normalization. Numerical results validate the proposed algorithm.
ISSN:0885-8950
1558-0679
DOI:10.1109/TPWRS.2015.2449757