Analysis of security constrained unit commitment using three models of electricity generation cost linearization

Piecewise linear (PWL) approximation techniques for linearizing the operational costs of generators, usually expressed as quadratic cost curves (QCCs), are used to represent the costs and bids in electricity markets. Clearly, different PWL approximations will produce different market outcomes. In 2016, Mexico's wholesale electricity market started operations. In 2017, the Secretaría de Energía (SENER) published guidelines for participants' offers, based on a linearized function of units' QCCs. This paper compares SENER's guidelines with two methods reported in the literature. An empirical case study of an IEEE 118-bus system is used to evaluate the effects of the three methods on Mexico's wholesale electricity market.