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Optimal contract design for purchasing from frequency regulation service providers with private information

Rayati, M ; Sharif University of Technology | 2019

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  1. Type of Document: Article
  2. DOI: 10.1109/TPWRS.2019.2895561
  3. Publisher: Institute of Electrical and Electronics Engineers Inc , 2019
  4. Abstract:
  5. In this letter, an incentive compatible contract is designed for purchasing energy and ancillary service (AS) simultaneously from strategic frequency regulation service providers (FRSPs) by considering information asymmetries between independent system operator and FRSPs. Here, AS is confined to frequency reserve (FR) for arresting nadir frequency following possible contingencies of the electrical grid. An FRSP has a multi-dimensional private information vector, which determines its operational cost and limitations. Moreover, there is a gaming opportunity for an FRSP that is arisen between energy and AS payments manifesting by manipulation of its bids. Thus, in this letter, a multi-object contract is designed by using the revelation principle to optimally allocate energy and FR among FRSPs. © 1969-2012 IEEE
  6. Keywords:
  7. Ancillary service ; Electricity market ; Frequency regulation ; Revelation principle ; Electric utilities ; Power markets ; Ancillary service ; Frequency regulation services ; Frequency regulations ; Independent system operators ; Information asymmetry ; Mechanism design ; Optimal contract design ; Machine design
  8. Source: IEEE Transactions on Power Systems ; Volume 34, Issue 3 , 2019 , Pages 2445-2448 ; 08858950 (ISSN)
  9. URL: https://ieeexplore.ieee.org/document/8626114