Alternative design options for a real-time balancing market

This paper discusses alternative design options for a real-time balancing market operated by an independent system operator (ISO). The market design can vary based on a number of criteria such as the role of centralized dispatch, the incidence of price overlaps in bids, the use of penalties, the representation of the transmission network, and the effects of ramping constraints. The paper discusses how price overlaps can be eliminated and how market participants can trade imbalances at ex-post prices in the forward market.