A Ana Virag

Analysis of the market-based service provision for operating reserves in the Netherlands

The electricity sector liberalisation in Europe has contributed significantly towards the creation of competitive markets. The wholesale trading of electricity consists of a market-based segment often complemented by markets for ancillary services, including the provision of operating reserves. In this paper, the authors examine and classify operating reserves that are currently traded in the Netherlands. The principles, under which the provision of these reserves is verified by the Dutch Transmission System Operator (TSO), are illustrated, and inefficiencies of the current verification approach are identified. The verification process of the TSO takes into account specific conditions, but the criteria for assessing the quality of the service provision are not explicitly defined. Furthermore, only a limited number of cases can be assessed due to the non-automated nature of the process. Finally, a proposal is made for the development of an automated analysis tool for assessing the service provision of market parties. This proposal emphasises the need for more robust verification processes in line with the increasing integration of electricity markets in Europe.

Combined bidding at power and ancillary service markets

Power and ancillary service markets are strongly coupled. However, at the moment auctions are organized in such a manner that the coupling is not taken into account. Every market participant submits bids at power and/or AS markets without possibility to adjust with respect to the outcome of the other market. Inexact approximations of the actual market price induce deviations from the optimal social welfare value. In this paper, we firstly describe and analyze the consequences of power and ancillary service market coupling. Secondly, we present two different market design strategies, both of which are based on the idea of iterative auction and have the goal to optimally account for power and AS coupling, enabling the overall system to maximize its social welfare. An illustrative example is used to present potential benefits and downsides that might arise as a result of introducing proposed market arrangements.

Congestion management in the deregulated electricity market: An assessment of locational pricing, redispatch and regulation

We analyze the fundamental differences between locational pricing and redispatch-based congestion management, followed by an assessment of their effects on grid operation and market efficiency. It is indicated that although optimal nodal pricing and congestion redispatch can provide equal results in terms of power injections, they are not equivalent in terms of short-run social welfare. Moreover, a modeling framework is presented to decouple and analyze the effects of transmission system operator/regulator and prosumer behavior on energy market efficiency in a transparent fashion. All results are illustrated on the basis of case studies for the IEEE 39-bus New England test network.

Towards a pan-European energy balancing market: Exercise on coupling the United Kingdom and Continental Europe

Increasing levels of wind power generation in the coming years will displace conventional generation, impacting the need for balancing reserves. The upcoming integration of pan-European balancing markets seeks to increase collaboration between areas for optimal provision of services. The challenge of increased variability due to wind and other renewables could be tackled by the exchange of balancing services among regional groups within the larger interconnected system. In this work, load-frequency control models of the United Kingdom and Continental Europe were developed in the MATLAB/Simulink environment and a worst-case event for the UK in the year 2020 is chosen for analysis. Fast control actions are then exchanged between the power systems of UK and Continental Europe. The performance of the coupled system in terms of frequency deviation is evaluated and compared to the decoupled situation. The results show that the frequency response improves, with lower maximum deviations. A cross-border balancing arrangement also leads to less deployment of reserves for UK.

Using market schedules to improve secondary control design

Trends in the power systems development, such as increased demand response or penetration of renewable energy, indicate that in the future, power system will experience significant daily changes in their physical properties. Time frames of energy economics and physical processes start to overlap. These changes require proper secondary controller tuning, for which high-quality up-to-date models are needed. The main contribution of this paper, we utilize the information on the energy market outcome, which is known in advance, to identify the dynamics of a control area relevant for the secondary control (SC) design/tuning. By rethinking the interconnected power systems in the system identification framework, and exploiting the developed theory, a consistent model of a control area is obtained within a few hours. This is sufficient to follow the daily changes in the system dynamics. It is expected that a controller based on a better model adapts to the daily changes in power system dynamics, and moreover, is capable of improving the system performance. Several illustrative examples confirm that the use of market based signals in the identification process is an important step that helps getting accurate models.

Reliability and efficiency at global level in power systems

In EU project E-Price it is proposed to attribute reliability to the Transmission System Operator (TSO) and the drive for efficiency to the Balance Responsible Parties (BRP). Two main ideas are proposed. The first idea is to make BRPs themselves responsible for estimating their uncertainty in real time and hedge their imbalance risks, yielding the proposal to introduce dual-sided markets for ancillary services. The second idea is to reduce the conservatism in exploiting the inter-area transmission capacity (ATC), while still guaranteeing sufficient degrees of reliability. This paper explains, elucidates and concludes, based on qualitative arguments and supported by quantitative simulations and calculations, that both proposals are beneficial to improve the stated compromise between reliability and economy.

An alternative approach for real-time balancing of electrical power systems

In this paper, we focus on the inefficiencies of current real-time balancing of power systems and propose an alternative solution. Our approach is based on the introduction of double-sided markets for the provision of secondary control and a market-based provision of primary control. We propose ancillary service (AS) markets for the provision of operating reserves, such that in real-time an optimal solution is reached for any considered power disturbance, without violating network constraints. We focus on a real-time control structure that enables consistent implementation/execution of AS contracts created in the forward markets for AS. We explain how these changes influence the current load frequency control implementation and which new commodities are to be defined to increase the efficiency and the reliability of the system. The presented real-time control structure is illustrated by linking its proposed functions with the currently existing solutions.

Resource allocation in smart homes based on Banker's algorithm

This paper proposes a method for improved energy management in smart homes by means of resource allocation. For this purpose, a Bankers algorithm based strategy has been developed. It is used to control the system and decide which of the given processes should be provided with resources at the time. Constraints such as due time of a process, limit of electrical energy consumption and use of preferable resources are taken into account. The smart home environment is developed and simulated in Matlab. The proposed strategy and also the standard strategy of the typical household are implemented and compared based on the criterion of economic costs. We show that potential implementation of the proposed strategy would improve energy management by proper choice and timing of resource usage in smart homes.

A stochastic optimization approach to optimal bidding on dutch ancillary services markets

The aim of this paper is to present a market design for trading capacity reserves (also called Ancillary Services, AS) and to introduce a strategy for the optimal bidding problem in such a scenario. In the deregulated market, the presence of several market participants or Balance Responsible Parties (BRPs) entitled for trading energy, together with the increasing integration of renewable sources and price-elastic loads, shift the focus on decentralized control and reliable forecast techniques. The main feature of the considered market design is its double-sided nature. In addition to portfolio-based supply bids and based on prediction of their stochastic production and load, BRPs are allowed to submit risk-limiting requests. Requesting capacity from the AS market corresponds to giving to the market an estimate of the possible deviation from the daily production schedule resulting from the day-ahead auction and from bilateral contracts, named E-Program. In this way each BRP is responsible for the balanced and safe operation of the electric grid. On the other hand, at each Program Time Unit (PTU) BRPs must also offer their available capacity under the form of bids. In this paper, a bidding strategy to the double-sided market is described, where the risk is minimized and all the constraints are fulfilled. The algorithms devised are tested in a simulation environment and compared to the current practice, where the double-sided auction is not contemplated. Results in terms of expected imbalances and reliability are presented.

On zonal pricing for congestion management

This paper is concerned with zonal pricing as an approach to congestion management. The main contributions of the paper are summarized as follows. Algebraic characterization of optimal zonal prices is presented, where physical tie-line limits are explicitly accounted for without introducing conservatism. In a case of affine bids, it is shown that the optimal zonal price in a zone can be represented as appropriately defined weighted average of auxiliary nodal prices in that zone. The weights used for averaging are directly derived from the bids made to the market. A novel numerical algorithm for computing optimal zonal prices is presented. The advantageous feature of the algorithm is that it can be implemented in a distributed fashion. An example is presented to illustrate and support the theoretical contributions of the paper.