The optimal short-term management of flexible nuclear plants in a competitive electricity system as a case of competition with reservoir

Pascal Gourdel (1, 2) , Maria Lykidi (1, 2)

1 CES - Centre d'économie de la Sorbonne
2 PSE - Paris School of Economics

In many countries, the electricity systems are quitting the vertically integrated monopoly organization for an operation framed by competitive markets. It therefore questions how flexible nuclear plants capable of load-following should be operated in an open market framework. A number of technico-economical features of the operation of flexible nuclear plants drive our modelling complex which makes difficult to determine the optimal management of the nuclear production within our model. In order to examine the existence of an equilibrium and calculate it, we focus on a short-term (monthly) management horizon of the fuel of nuclear reactors. The marginal cost of nuclear production being (significantly) lower than that of thermal production induces a discontinuity of producer's short-term profit. The problem of discontinuity makes the resolution of the optimal short-term production problem extremely complicated and even leads to a lack of solutions. That is why it is necessary to study an approximate problem (continuous problem) that constitutes a “regularization” of our economical problem (discontinuous problem). Its resolution provides us with an equilibrium which proves the existence of an optimal production trajectory.

Mots clés: electricity market; nuclear generation; competition with reservoir; optimal short-term production problem; price discontinuity; quadratic programming

Domaines: Economies et finances

Pascal Gourdel, Maria Lykidi. The optimal short-term management of flexible nuclear plants in a competitive electricity system as a case of competition with reservoir. 2014. ⟨halshs-01053474⟩