Richard P. O’Neill

Why this Book? New Capabilities and New Needs for Unit Commitment Modeling

This book presents recent developments in the functionality of generation unit commitment (UC) models and algorithms for solving those models. These developments, the subject of a September 1999 workshop, are driven by institutional changes that increase the importance of efficient and market responsive operation. We illustrate these developments by demonstrating the use of mixed integer programming (MIP) to solve a UC problem. The dramatically lower solution times of modem MIP software indicates that it is now a practical algorithm for UC. Participants in the workshop also prioritized the features that need to be considered by UC models, along with topics for research and development. Among the highest research priorities are: market simulation; bid selection; reliability and reserve constraints; and fair processes for choosing from alternative near-optimal solutions. The chapter closes with an overview of the contributions of the other chapters.

Regulatory Evolution, Market Design and Unit Commitment

In the context of competitive wholesale electricity markets, the unit commitment problem has shifted from a firm level optimization problem to a market level problem. Some centralized market designs use it to ensure reliability and determine day-ahead market prices. This chapter reviews the recent history of short-term electricity markets in the United States to evaluate the experience with alternative market designs and the implications for unit commitment modeling. It presents principles for the design of the next generation of unit commitment-based markets.

Flexible Transmission in the Smart Grid: Optimal Transmission Switching

There is currently a national push to create a smarter, more flexible electrical grid. Traditionally, network branches (transmission lines and transformers) in the electrical grid have been modeled as fixed assets in the short run, except during times of forced outages or maintenance. This traditional view does not permit reconfiguration of the network by system operators to improve system performance and economic efficiency. However, it is well known that the redundancy built into the transmission network in order to handle a multitude of contingencies (meet required reliability standards, i.e., prevent blackouts) over a long planning horizon can, in the short run, increase operating costs. Furthermore, past research has demonstrated that short-term network topology reconfiguration can be used to relieve line overloading and voltage violations, improve system reliability, and reduce system losses. This chapter discusses the ways that the modeling of flexible transmission assets can benefit the multi-trillion dollar electric energy industry. Optimal transmission switching is a straightforward way to leverage grid controllability; it treats the state of the transmission assets, i.e., in service or out of service, as a decision variable in the optimal power flow problem instead of treating the assets as static assets, which is the current practice today. Instead of merely dispatching generators (suppliers) to meet the fixed demand throughout the network, the new problem co-optimizes the network topology along with generation. By harnessing the choice to temporarily take transmission assets out of service, this creates a superset of feasible solutions for this network flow problem; as a result, there is the potential for substantial benefits for society even while maintaining stringent reliability standards. On the contrary, the benefits to individual market participants are uncertain; some will benefit and other will not. Consequently, this research also analyzes the impacts that optimal transmission switching may have on market participants.

A Joint Energy and Transmission Rights Auction on a Network with Nonlinear Constraints: Design, Pricing and Revenue Adequacy

The forward and real-time (spot) auction markets operated by independent system operators (ISOs) allow for trade in multiple wholesale electricity products, differentiated by time and location on the transmission network. This chapter presents a general auction model that implements key features of the ISO markets, including definition of several market products, the rules for joint auctioning of the products in a sequence of forward and spot markets, the rules for financial settlement of those products, and the requirements to ensure revenue adequacy of the auctioneer. The model formulation is focused on a joint energy and transmission rights auction (JETRA; henceforth, the ‘auction model’ or ‘auction’), along with a non-linear representation of the transmission network constraints. However, the formulation can be extended, in some cases with modification, to other market products. Our earlier paper (O’Neill et al. 2002) explored properties of this auction with linear transmission constraints.