Panagiotis Andrianesis

Performance-Based Pricing of Frequency Regulation in Electricity Markets

The emergence of high penetration of renewable energy sources in the energy mix of power systems has substantially increased the need for faster-ramping resources participating in the frequency regulation service procured via market mechanisms by the system operators. However, current market mechanisms do not properly align the incentives for participation since resources are not compensated for the actual frequency regulation they provide nor for the accuracy with which they follow the automatic generation control (AGC) dispatch signal. In this paper, we evaluate the current mechanisms for procuring, dispatching and compensating resources for the frequency regulation service. We also propose a comprehensive approach for calculating the performance payment that includes the actual service they provide and the accuracy with which they follow the AGC signal. Finally, we perform a study by deploying actual operational AGC data for analyzing the proposed methodology.

Recovery mechanisms in day-ahead electricity markets with non-convexities - Part I: Design and evaluation methodology

In centralized day-ahead electricity markets with marginal pricing, unit commitment costs and capacity constraints give rise to non-convexities which may result in losses to some of the participating generating units. Therefore, a recovery mechanism is required to compensate them. In this paper, we present and analyze several recovery mechanisms that result in recovery payments after the market is cleared. Each of these mechanisms results in a different type and/or amount of payments for each participating unit that exhibits losses. We also propose a methodology for evaluating the bidding strategy behavior of the participating units for each mechanism. This methodology is based on the execution of a numerical procedure aimed at finding joint optimal bidding strategies of the profit-maximizing units. In a companion follow-up paper (Part II), we apply this methodology to evaluate the performance and incentive compatibility of the suggested recovery mechanisms on a simplified test case model of the Greek electricity market.

Energy-reserve markets with non-convexities: An empirical analysis

In this paper, we address the design of a joint energy — reserve electricity market with non-convexities which are due to the fixed costs and capacity constraints of the generation units. Motivated by the relevant literature [1]-[5], we state a bid recovery mechanism that applies to the day-ahead scheduling problem, which is modeled as a mixed-integer linear programming problem. However, the particularly complex nature of the problem, especially if we consider it in its full scale, makes it extremely difficult if not impossible to analytically assess the market operation, under various market designs. Therefore, we proceed to an empirical analysis that aims to provide useful insight in evaluating the incentive compatibility of pricing and compensation schemes based on marginal pricing theory. In order to understand the bidding behavior of the participants and exhibit the proposed methodology, we present an illustrative example, based on Greeces day-ahead energy — reserve market.

Superdirective-Type Near Fields in the Method of Auxiliary Sources

According to recent works, when one applies the method of auxiliary sources (MAS) to scattering problems, it is possible for the MAS currents to be strongly oscillatory. For two simple geometries, the “cylindrical” and “planar” problems, we study the near field generated by these oscillatory currents analytically and numerically and point out analogies to the near fields of superdirective antennas. For both geometries, the source is an infinitely long electric current filament while the respective scatterers are an infinitely long perfect electric conductor (PEC) circular cylinder, and an infinite PEC planar ground plane.

Critical Review of Pricing Schemes in Markets with Non-Convex Costs.

We consider a market in which suppliers with asymmetric capacities and asymmetric marginal and fixed costs compete to satisfy a deterministic and inelastic demand of a commodity in a single period. The suppliers bid their costs to an auctioneer who determines the optimal allocation and the resulting payments, a typical situation in deregulated electricity markets. Under classical marginal-cost pricing, the nonconvexity of the total cost may result in losses for some suppliers because they may fail to recover their fixed cost through commodity payments only. To address this problem, various pricing schemes that lift the price above marginal cost and/or provide side-payments (uplifts) have been proposed in the literature. We review several of these schemes, also proposing a new variant, in a two-supplier setting. We derive closed-form expressions for the price, uplifts, and profits that each scheme generates that enable us to analytically compare these schemes along these three dimensions. Our analysis complements known numerical comparisons available in the literature. We extend some of our analytical comparisons to the case of more than two suppliers and discuss extant numerical comparisons for this case. Further, we present known results concerning the potential for supplier strategic bidding behavior in the context of the considered pricing schemes, emphasizing when possibilities for market manipulation exist.

Recovery mechanisms in day-ahead electricity markets with non-convexities - Part II: Implementation and numerical evaluation

In centralized day-ahead electricity markets with marginal pricing, unit commitment costs and capacity constraints give rise to non-convexities which may result in losses to some of the participating generating units. To compensate them for these losses, a recovery mechanism is required. In Part I of this two-part paper, we present certain recovery mechanisms that result in recovery payments after the market is cleared. We also propose a methodology for evaluating the bidding strategy behavior of the participating units for each mechanism. In this paper (Part II), we apply this methodology to evaluate the performance and incentive compatibility properties of each recovery mechanism on a test case model representing the Greek joint energy/reserve day-ahead electricity market. Lastly, we perform sensitivity analysis with respect to key parameters and assumptions and we provide directions for further research.

Recovery mechanisms in a joint energy/reserve day-ahead electricity market with non-convexities

The goal of this paper is to evaluate the incentive compatibility of several cost- and bid-based recovery mechanisms that may be implemented in a wholesale electricity market to make the generation units whole in the presence of non-convexities, which are due to unit commitment costs and capacity constraints. To this end, we simulate the bidding behavior of the participants in a simplified model of the Greek joint energy/reserve day-ahead electricity market, where we assume that the players (units) participate as potential price-makers in a non-cooperative game with complete information that is repeated for many rounds. The results suggest that a mechanism based on bid recovery with a regulated cap is quite promising.

Market design for the simultaneous optimization of the Day-Ahead market and the reliability unit commitment applications

The design of restructured electricity markets requires a mechanism to ensure that differences between the bid-in demand that clears in the Day-Ahead Market (DAM) and the ISOs demand forecast do not compromise reliability requirements. This mechanism is usually called Reliability (or Residual) Unit Commitment (RUC), and is deployed to procure additional resources, beyond the DAM energy schedules, to meet the demand forecast. In this paper, we present the theoretical foundation of the RUC process and key important considerations in implementing the RUC application. We also provide a description of the general sequential approach in which the DAM application is executed first and then the RUC process is completed. We then offer the design framework for the implementation of an integrated approach which combines the functionality of the DAM and the RUC into one market application. The integrated approach offers substantial efficiencies by procuring all DAM products simultaneously.

A recovery mechanism with loss-related profits in a day-ahead electricity market with non-convexities

In wholesale electricity markets, unit commitment costs and capacity constraints create non-convexities which may bring about losses to some of the participating generation units. To keep the losing units in the market, a recovery mechanism that makes them whole is needed. In this paper, we present a recovery mechanism which compensates the units that incur cost-based losses with recovery payments, in order to ensure that they end up with positive profits. The profits resulting from the recovery payments are loss-related. More specifically, a losing unit will receive recovery payments to end up with final net profits that are set to a percentage, say α, of the losses. We evaluate this mechanism with a simulation-based methodology for certain values of the regulating parameter ??, and the results show that this mechanism produces relatively low uplifts. We also comment on the pros and cons of this design and provide directions for further research.

On the design of electricity auctions with non-convexities and make-whole payments

Electricity markets that allow the generation units to submit multi-part bids and take into account the technical characteristics of these units are characterized by non-convexities. Such market designs, when operated under marginal pricing, may result in market outcomes where truthful bidding results in losses for the respective participants. To deal with this highly undesirable prospect, make-whole payments are foreseen in centrally committed market designs. To study the behavior of market participants in such designs, we consider a stylized capacity-constrained duopoly, where we add a bid/cost recovery mechanism that “recovers” (compensates) potentially incurred losses providing make-whole payments. We then consider a modification of this mechanism in which the market participants have to respect a regulated cap to be entitled to make-whole payments. This yields a rather non-trivial electricity auction. We employ a game-theoretic methodology to identify equilibria for the two mechanisms, for different levels of demand, and examine their properties. Finally, we discuss the implications that the analytical results for the stylized model may have on more realistic unit commitment models of day-ahead electricity markets with non-convexities.