Enabling participation of demand-side flexibility in electricity markets is key to improving power system resilience and increasing the penetration of renewable generation. In this work we are motivated by the curtailment of near-zero-marginal-cost renewable resources during periods of oversupply, a particularly important cause of inefficient generation dispatch. Focusing on shiftable load in a multi-interval economic dispatch setting, we show that incompatible incentives arise for loads in the standard market formulation. While the system's overall efficiency increases from dispatching flexible demand, the overall welfare of loads can decrease as a result of higher spot prices. We propose a market design to address this incentive issue. Specifically, by imposing a small number of additional constraints on the economic dispatch problem, we obtain a mechanism that guarantees individual rationality for all market participants while simultaneously obtaining a more efficient dispatch. Our formulation leads to a natural definition of a uniform, time-varying flexibility price that is paid to loads to incentivize flexible bidding. We provide theoretical guarantees and empirically validate our model with simulations on real-world generation data from California Independent System Operator (CAISO).
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Scenario-based Economic Dispatch with Tunable Risk Levels in High-renewable Power Systems
This paper introduces an empirical approach to dispatch resources in real-time power system operation with growing levels of uncertainties emerging from intermittent and distributed energy resources in the supply and the demand side. It is shown that by taking empirical data of specific sizes, the dispatch results can lead to a quantifiable and rigorous bound on the risk of violating constraints at the implementation stage. In particular, we formulate the look-ahead real-time economic dispatch problem using the scenario approach. This approach takes empirical data as input and guarantees a tunable probability of violating the constraints according to the input data size. By exploiting the structure of the economic dispatch, we show that in the absence of transmission constraints, the number of samples theory requires does not grow with the size of the problem. In the more general case with consideration of transmission constraints, it is shown that the posterior bound on the risk of dispatch can be quantified and can be much smaller than the risk bound before solving the dispatch. Numerical examples based on a standard test system suggest that the scenario approach can provide a practically attractive solution with theoretically rigorous properties for risk-limiting power system operations.
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- Award ID(s):
- 1636772
- PAR ID:
- 10110828
- Date Published:
- Journal Name:
- IEEE Transactions on Power Systems
- ISSN:
- 0885-8950
- Page Range / eLocation ID:
- 1 to 1
- Format(s):
- Medium: X
- Sponsoring Org:
- National Science Foundation
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- Free Publicly Accessible Full Text
-
Accepted Manuscript1.0
- Journal Article:
- https://doi.org/10.1109/TPWRS.2018.2874464
