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Shadow Price Cap for Non-Competitive Constraints PowerPoint Presentation
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Shadow Price Cap for Non-Competitive Constraints

Shadow Price Cap for Non-Competitive Constraints

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Shadow Price Cap for Non-Competitive Constraints

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  1. Shadow Price Cap for Non-Competitive Constraints • If a Non-Competitive Constraint is at the Shadow Price Caps for more than x (say 5) hours over a rolling 12-month period, then set the Shadow Price Cap at y% (say 30-40%) of its previous value. • If the sum of Shadow Prices for the Non-Competitive Constraint exceeds $z (say …….) over a rolling 12-month period, then set Shadow Price Cap for that constraint at $L/MW/hr (say $500/MW/hr). • At the earlier of the constraint becoming competitive or 12 months after setting the Shadow Price Cap at $500/Mw/hr, reset the Shadow Price Cap at its original value if the constraints becomes competitive or at y% of its original value and repeat 2 and 3.