Patent ID: 7349883

Claim:
A computer implemented system for optimal energy and energy reserve dispatching in an electricity market of market participants, said system comprising: a database; and a processor configured: inputting constraints of the market participants; receiving energy and energy reserve bids from the market participants; defining piecewise linear bid cost curves having respective breakpoints corresponding to the energy and energy reserve bids; converting the piecewise linear bid cost curves to one or more cost variables associated with a set of linear equations according to the following relationship: c com ( i,t )=Σ k c com pl ( i,t,k )·ω com pl ( i,t,k ), wherein c com (i,t) is a cost variable for an energy commodity bid i at time step t; k is a breakpoint of a piecewise linear bid cost curve; c com pl (i,t,k) is a piecewise linear bid cost curve breakpoint for energy commodity bid i at time step t at breakpoint k; ω com pl (i,t,k) is a weighting variable associated with the piecewise linear bid cost curve commodity bid i at time step t at breakpoint k; calculating an optimal dispatch of energy and energy reserve responsive to the cost variable considering said constraints of the market participants using mixed integer linear programming techniques; pricing the optimal dispatch of energy and energy reserve considering said constraints; and providing the pricing to the market participants.