Incentive for the profit maximization of binding generation in a market environment

The opening of the market in the generation side obliges to renegotiate Power Purchase Agreements (PPA), traditionally applied in some electricity sectors. The renegotiation of those PPA should be exercised with the producers' agreement. In the case that this doesn't happen, a proper framework should be established in order to enable the existence of this agreement without any market interference. In this new framework, the energy produced by those power stations shall be sold in the wholesale market. The difference between the costs of the energy produced and the gains of selling this energy in the market is transferred to the customers through the access tariffs. Thus, the net consumers profit can be increased by an efficient management of those PPA. In this paper an incentive to maximize those profits is proposed. The mechanism is based on the fact that the Iberian spot market prices present a constant pattern, which allows the dispatch of power plants in a deterministic way, i.e., defined ex-ante at a minimum risk.