The issue of unit constraints and the non-confiscatory electricity market

Security constraint unit commitment is devised to drive the generation unit schedule in a deregulated environment. Generation bids, transmission system constraints and generation unit constraints are thoroughly considered in this optimization problem. It is acceptable that the transmission system normal condition constraints may affect the economic opportunities of the generation companies in the electricity market. Transmission system limitations are the inherent limits of the market environment but this is not true for the generation unit constraints. It means that the generation unit constraint of a certain player should not affect the economic opportunities of the rivals. If this happen, generation units can claim to the electricity market regulatory board. In this paper the effect of generation unit constraint on the market outcome is discussed. A fair mechanism is introduced in which the generation unit constraints of a certain player cannot limit the economic opportunities of the rivals in the electricity market. Finally, the result of implementing the proposed mechanism in Iran Electricity Market (IEM) has been reported.