New Swing-Contract Design for Wholesale Power Markets

New Swing-Contract Design for Wholesale Power Markets

Tesfatsion, Leigh

John Wiley & Sons Inc

02/2021

288

Dura

Inglês

9781119670124

15 a 20 dias

540

Descrição não disponível.
Preface xiii

Author Biography xiv

Acknowledgments xv

Chapter 1 Introduction 1

Chapter 2 US RTO/ISO-Managed Wholesale Power Markets: Overview 9

2.1 Chapter Preview 9

2.2 General Goals for Wholesale Power Market Design 9

2.3 US RTO/ISO-Managed Market Operations 10

2.4 Stresses Faced by Current US RTO/ISO-Managed Markets 14

Chapter 3 Motivation For Current Study 17

3.1 Chapter Preview 17

3.2 Problematic Design Aspects of US RTO/ISO-Managed Wholesale Power Markets 17

3.2.1 Artificial Distinction Between Energy and Reserve 17

3.2.2 Problematic use of Hedonic Pricing 18

3.2.3 Revenue Insufficiency and Incentive Problems 19

3.2.4 Computational Fragility of LMP Derivations 20

3.2.5 Performance Payment in Advance of Performance Delivery 22

3.2.6 Minimal Direct Representation of Retail Customer Interests 23

3.2.7 Reliance on Overly Simplistic Cost Conceptions 24

3.2.8 Use of Spot-Market Pricing for Forward Markets 26

3.3 Relation of Current Study to Previous Swing-Contract Work 26

Chapter 4 Swing Contracts For Iso-Managed Wholesale Power Markets 29

4.1 Swing Contract Overview 29

4.2 Swing Contracts: General Formulation 29

4.3 Swing Contracts in Firm or Option Form 31

Chapter 5 Illustrative Swing-Contract Reserve Offers 35

5.1 Chapter Preview 35

5.2 A Simple Energy-Block Swing Contract in Firm Form 37

5.3 An Energy-Block Swing Contract in Option Form 40

5.4 Swing-Contract Implementation of Standard Supply Offers 41

5.5 A Swing Contract Offering Continuous Swing (Flexibility) in Power and Ramp 47

5.6 A Swing Contract Offering Battery Services 49

5.7 Swing-Contract Facilitation of Private Bilateral Contracting 52

Chapter 6 Swing-Contract Market Design 55

6.1 Chapter Preview 55

6.2 General Swing-Contract Market Formulation 55

6.3 Financial and Physical Feasibility of Swing-Contract Offers 58

6.4 Reserve Bids 58

6.5 Handling of Fixed Reserve Bids and Non-Dispatched Power 60

6.6 Performance Penalties and Incentives 60

6.7 ISO Cost Allocation 61

Chapter 7 Swing-Contract Market Optimization: Base-Case Milp Formulation 67

7.1 Chapter Preview 67

7.2 General Assumptions and Notation 68

7.3 Discretization of the ISO's Optimization Problem 69

7.4 ISO Objective Function 73

7.5 Complete Analytical MILP Formulation 74

7.6 Additional Discussion of Optimization Aspects 76

7.7 Five-Bus Test Case 78

7.8 Thirty Bus Test Case with Adaptive Reserve Zones 81

Chapter 8 Inclusion Of Reserve Offers With Price Swing 85

8.1 Chapter Preview 85

8.2 Cost Function Preliminaries 86

8.3 MILP Tractable form of Reserve Offers with Price Swing 87

Chapter 9 Inclusion Of Price-Sensitive Reserve Bids 93

9.1 Chapter Preview 93

9.2 Incorporation of Benefits 94

9.3 Modeling of Price-Sensitive Reserve Bids 96

9.3.1 Standard Demand Function Formulation 96

9.3.2 Reserve Bids with Time-of-Use Pricing 97

9.3.3 Reserve Bids with Price Swing 97

9.3.4 Reserve Bids Directly Expressed as Benefit Functions 99

9.4 MILP Tractable Approximation of Benefit Functions 100

Chapter 10 The Linked Swing-Contract Market Design 105

10.1 Chapter Preview 105

10.2 Multistage Optimization and Time Inconsistency 107

10.3 Settlement Time-Consistency of Swing-Contract Markets 109

10.4 Swing-Contract Long-Term Forward Markets 111

10.5 Swing-Contract Short-Term Forward Markets 112

10.6 Swing-Contract Very Short-Term Forward Markets 113

10.7 Swing-Contract Deployment in Real-Time Operations 114

Chapter 11 Illustration: Linked Day-Ahead And Hour-Ahead Swing-Contract Markets 117

11.1 Chapter Preview 117

11.2 Hour-Ahead Market with Reserve Offers Consisting of Swing-Contract Portfolios 117

11.3 SCED Solution for Hour-Ahead Swing-Contract Market 122

11.3.1 Overview 122

11.3.2 Power Balance 122

11.3.3 Coverage of the ISO's Uncertainty Set 123

11.3.4 Constrained Minimization of Expected Cost 125

11.4 Linked Day-Ahead and Hour-Ahead Markets 126

Chapter 12 Standard Modeling Of A Competitive Market 131

12.1 Chapter Preview 131

12.2 Key Definitions 131

12.3 Standard Competitive Market Assumptions 132

12.4 Law of One Price for Commodities 132

12.5 Competitive Market: Basic Formulation 133

12.6 Net Surplus Extraction 136

12.7 Market Efficiency Metric 137

12.8 Market Efficiency and Pricing Rules 139

12.9 Strategic Trade Behavior and Trader Market Power 140

CHAPTER 13 US RTO/ISO-Managed Markets: Efficiency And Market Power 143

13.1 Chapter Preview 143

13.2 Daily Market Operations 144

13.3 Illustrative Analytical DAM Formulation 146

13.4 Net Surplus Extraction in the Illustrative DAM 147

13.5 Market Power in the Illustrative DAM: Type-I Error 152

13.6 Market Power in the Illustrative DAM: Type-II Error 156

13.7 Market Inefficiency in the Illustrative DAM 160

13.8 DAM Performance: General Assessment 163

13.9 Scheduling of Bilateral Contracts 165

Chapter 14 Comparisons With Swing-Contract Markets 167

14.1 Chapter Preview 167

14.2 Product Definition in US RTO/ISO-Managed Markets 168

14.3 Wholesale Power and the Law of One Price (Not) 170

14.4 Differential vs. Uniform Pricing 171

14.5 Comparison of SC and Current US DAM Designs 172

Chapter 15 Advantages Of The Linked Swing-Contract Market Design 175

15.1 Chapter Preview 175

15.2 SC Markets are Physically-Covered Insurance Markets 176

15.3 Longer-Term SC Markets Support New Investment 177

15.3.1 Energy-Only Market 179

15.3.2 Centrally Managed Capacity Market 181

15.3.3 LSE Bilateral Contract Obligations 182

15.4 SC Markets Ensure Revenue Sufficiency 183

15.5 SC Markets Ameliorate Merit-Order Concerns 184

15.6 SC Markets are Robust-Control Mechanisms 185

15.7 SC Markets Reduce Rule Complexity 186

15.8 SC Markets Reduce Gaming Opportunities 187

15.9 SC Markets have Smaller-Sized Optimizations 189

15.10 Additional Advantages of SC Markets 190

15.10.1 Ensure a Level Playing Field for Resource Participation 190

15.10.2 Permit Co-Optimization of Diverse Reserve 191

15.10.3 Appropriately Remunerate Diversity and Flexibility 191

15.10.4 Encourage Accurate Forecasting and Dispatch Following 191

15.10.5 Ensure Settlement Time-Consistency 191

Chapter 16 Gradual Transition To Linked Swing-Contract Markets 193

16.1 Chapter Preview 193

16.2 A DAM Formulation Permitting Gradual Transition 195

16.3 Cost Function Preliminaries for the Transitional DAM 197

16.4 MILP SCUC/SCED Optimization for the Transitional DAM 201

Chapter 17 Swing-Contract Support For Integrated Transmission And Distribution Systems 209

17.1 Chapter Preview 209

17.2 Transactive Energy System Design for ITD Systems 211

17.3 Role of Distribution Utilities 215

17.4 An IDSO-Managed Bid-Based TES Design for Households 216

17.5 IDSOs as Grid-Edge Resource Aggregators 219

17.6 Swing-Contract Support for IDSO Participation in Wholesale Power Markets 220

Chapter 18 Design Evaluation Via The ITD TES Platform 221

18.1 Chapter Preview 221

18.2 Design Readiness Levels 222

18.3 An ITD TES Platform Permitting TES Design Evaluation 223

18.4 Illustrative Test Cases: Overview 226

18.5 Illustrative Test Cases: Report 229

18.5.1 IDSO Peak-Load Reduction Capabilities 229

18.5.2 IDSO Load-Matching Capabilities 229

18.5.3 Household ITD Test Cases: Discussion 233

Chapter 19 Potential Future Research Directions 235

19.1 Effective use of Option Swing Contracts 235

19.2 Representation of Reserve Bids 236

19.3 Compensation for Storage Services 236

19.4 Compensation for Reliability Services 236

19.5 Representation of Power-Paths 237

19.6 Implementation of Contract-Clearing Optimizations for Swing-Contract Markets 237

19.7 Gradual Transition to a Swing-Contract Market 238

Chapter 20 Conclusion: The Dots Keep Connecting 239

Appendix A Appendices 241

References 249

Index 259
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swing contracts; flexible reserve provision; wholesale power market; electric power system; wholesale electric power markets; power markets; net-load balancing service; energy resources; power paths; electrical engineering; renewable energy; ISO/RTO