A Swing-Contract Market Design for Flexible Service Provision in Electric Power Systems
The need for flexible service provision in electric power systems has dramatically increased due to the growing penetration of variable energy resources, as has the need to ensure fair access and compensation for this provision. A swing contract facilitates flexible service provision with appropriate compensation because it permits multiple services to be offered together in bundled form with each service expressed as a range of possible values rather than as a single point value. This paper discusses a new swing-contract market design for electric power systems that permits swing contracts to be offered by any dispatchable resource. An analytical optimization formulation is developed for the clearing of a swing-contract day-ahead market that can be implemented using any standard mixed-integer linear programming solver. The practical feasibility of the optimization formulation is demonstrated by means of a numerical example.
This research has been supported in part by grants from the ISU Electric Power Research Center (EPRC), the Sandia National Laboratories (Contract No. 1163155), and the Department of Energy (DE-AR0000214 and DE-OE0000839). The authors are grateful to the editors and four reviewers for constructive comments and to Zhaoyu Wang and Shanshan Ma for helpful discussions related to the topic of this study.
- 1.Barooah P, Bušić A, Meyn S (2015) Spectral decomposition of demand-side flexibility for reliable ancillary services in a smart grid. In: 48th Hawaii international conference on system sciences (HICSS)Google Scholar
- 3.Bunn D (2004) Structural and behavioural foundations of competitive electricity prices. In: Bunn D (ed) Modelling prices in competitive electricity markets. Wiley, New York, pp 1–17Google Scholar
- 4.Bushnell JB (2013) JP Morgan and market complexity. Energy economics exchange blog. Online: http://energyathaas.wordpress.com/2013/08/12/jp-morgan-and-market-complexity.
- 7.Chao HP, Wilson R (2002) Multi-dimensional procurement auctions for power reserves: robust-incentive compatible scoring and settlement rules. J Regul Econ 22(2):161–183Google Scholar
- 8.EIA (2017) U.S. Energy Information Administration (EIA). http://www.eia.gov/
- 9.Ela E, Milligan M, Kirby B (2011) Operating reserves and variable generation. National Renewable Energy Laboratory, Technical report, NREL/TP-5500-51976Google Scholar
- 10.Ellison JF, Tesfatsion LS, Loose VW, Byrne RH (2012) A survey of operating reserve markets in U.S. ISO/RTO-Managed Electric Energy Regions. Sandia National Laboratories report (SAND2012-1000)Google Scholar
- 11.FERC (2011) Frequency regulation compensation in the organized wholesale power markets. Order No. 755: Final RuleGoogle Scholar
- 12.Hand MM, Baldwin S, DeMeo E, Reilly JM, Mai T, Arent D, Porro G, Meshek M, Sandor D (eds) (2012) Renewable electricity futures study, 4 vols. National Renewable Energy Laboratory (NREL), NREL/TP-6A20-52409Google Scholar
- 13.Hedman K, Korad AS, Zhang M, Dominguez-Garcia A, Jiang X (2014) The application of robust optimization in power systems. Final report to the power systems engineering research center. PSERC Publication 14-6Google Scholar
- 15.Hinman C (2015) Pay for performance regulation (FERC Order 755) updated with year one design changes California Independent System Operator (CAISO)Google Scholar
- 17.Li W, Tesfatsion L (2016) Market provision of flexible energy/reserve contracts: optimization formulation. In: Proceedings of the IEEE power and energy society general meeting, Boston, MA (electronic)Google Scholar
- 18.NAS (2016) Analytic research foundations for the next-generation electric grid. National Academies of Science. The National Academies Press, Washington, DCGoogle Scholar
- 19.Oren SS (2005) Generation adequacy via call options obligations: safe passage to the promised land. Electr J 18(9):28–42Google Scholar
- 21.Tesfatsion L (2009) Auction basics for wholesale power markets: objectives and pricing rules. In: Proceedings of the IEEE power and energy society general meeting, Calgary, Alberta, CA (electronic)Google Scholar
- 22.Tesfatsion LS, Silva-Monroy CS, Loose VW, Ellison JF, Elliott RT, Byrne RH, Guttromson RT (2013) New wholesale power market design using linked forward markets. Sandia National Laboratories report (SAND2013-2789)Google Scholar
- 23.Wood AJ, Wollenberg BF, Sheblé GB (2013) Power generation, operation, and control, 3rd edn. Wiley, New York, NYGoogle Scholar