Value-based reserve market settlement

Nouri, A ; Sharif University of Technology | 2016

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  1. Type of Document: Article
  2. DOI: 10.1049/iet-gtd.2015.1367
  3. Publisher: Institution of Engineering and Technology , 2016
  4. Abstract:
  5. The main focus of this study is on reserve market settlement in an electricity market with marginal pricing scheme as the pricing mechanism. Following a day-ahead market clearing, the marginal prices are found using the appropriate Lagrange multipliers as the bi-products of the optimisation process. The payments to energy and reserve providers can then be found based on these prices. However, it is hard to find an appropriate settlement scheme that provides the fair and justifiable consumer payments based on marginal pricing scheme considering the actual reserve functions in power systems. In this study, a reserve marginal pricing that is based on a proper reserve marginal price definition and considers the free market requirements and accounts for the lost opportunity of selling the convertible products is proposed. Also, a value-based reserve market settlement scheme is proposed in this study that is justifiable for customers and best suits the actual reserve functions in the system. In the proposed settlement scheme, the reserves are eliminated one after the other and the loss of load (LL) and generation is then calculated for market participants in different contingencies via a novel optimal power flow that finds the fair and optimal LLs and generations. The reserve market is then settled based on the LLs and generations in different contingencies. The proposed reserve pricing and settlement schemes are tested on a 3-bus system, a 6-bus system, and the 24-bus reliability test system to show the effectiveness of the proposed method. © 2016. The Institution of Engineering and Technology
  6. Keywords:
  7. Costs ; Electric load flow ; Lagrange multipliers ; Day ahead market ; Lost opportunities ; Marginal prices ; Marginal pricing ; Market participants ; Optimal power flows ; Pricing mechanism ; Reliability test system ; Commerce
  8. Source: IET Generation, Transmission and Distribution ; Volume 10, Issue 9 , 2016 , Pages 2216-2224 ; 17518687 (ISSN)
  9. URL: http://digital-library.theiet.org/content/journals/10.1049/iet-gtd.2015.1367