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Regional Economics: Theory and Practice
 

Identification of hybrid dynamic models: the case of the regional wholesale electricity market

Vol. 12, Iss. 40, OCTOBER 2014

Available online: 25 October 2014

Subject Heading: Economy and management

JEL Classification: 

Pages: 35-43

Popova E.A. National Research University - Higher School of Economics, Perm, Russian Federation
popova.ewgeniya@gmail.com

Kochkina N.A. National Research University - Higher School of Economics, Perm, Russian Federation
kochkina.nataliya@gmail.com

Importance Studying the behavior of consumers and producers in a competitive wholesale market of Russia and the formation of the equilibrium price stay topical in the field of electric power industry.
     Objectives The relationship between such parameters as the consumption and price of electricity is a subject of particular interest and the subject of our study. We have also considered some other factors inherent in such researches.
     Methods To investigate all these questions, we suggest a continuously-discrete (hybrid) model of functional-differential equations of wholesale electricity market for a macroregion of Russia, i.e. the united energy system in the Ural region. The distinguishing feature of the model is that one of the continuous nature of demand and the discrete nature of electricity prices that logically follows from the analysis of regulations of the wholesale electricity market of Russia. The constructed model takes into account the specifics of the joint power grid in the Ural region, which lies in the possibility of sudden changes in loading the power plants. In this paper, we propose a method for identifying such type of models. Estimation of parameters of the model is calculated as the solution to the problem of minimization of errors on a form of integral differential equation and the traditional regression equation. The model at the joint power grid in the Ural region was identified in monthly dynamics of August, 2011 to February, 2014.
     Results The analysis of the model has confirmed the hypothesis of reciprocal influences of consumption and electricity prices. In addition, the analysis shows the significance of the factors characterizing the change in power generating capacities on the territory of the united energy system of the Ural region in the formation of the equilibrium price for electricity.
     Relevance The constructed model is the first hybrid model in the wholesale electricity market, and the proposed method of identification is one of the possible methods for the identification of such models.

Keywords: wholesale electricity market, hybrid model identification

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