A New Swing-Contract Design for Wholesale Power Markets

ISBN-13: 9781119670124 / Angielski / Twarda / 2020 / 288 str.

Leigh S. Tesfatsion

Spis treści

Preface xiiiAuthor Biography xivAcknowledgments xvChapter 1 Introduction 1Chapter 2 US RTO/ISO-Managed Wholesale Power Markets: Overview 92.1 Chapter Preview 92.2 General Goals for Wholesale Power Market Design 92.3 US RTO/ISO-Managed Market Operations 102.4 Stresses Faced by Current US RTO/ISO-Managed Markets 14Chapter 3 Motivation For Current Study 173.1 Chapter Preview 173.2 Problematic Design Aspects of US RTO/ISO-Managed Wholesale Power Markets 173.2.1 Artificial Distinction Between Energy and Reserve 173.2.2 Problematic use of Hedonic Pricing 183.2.3 Revenue Insufficiency and Incentive Problems 193.2.4 Computational Fragility of LMP Derivations 203.2.5 Performance Payment in Advance of Performance Delivery 223.2.6 Minimal Direct Representation of Retail Customer Interests 233.2.7 Reliance on Overly Simplistic Cost Conceptions 243.2.8 Use of Spot-Market Pricing for Forward Markets 263.3 Relation of Current Study to Previous Swing-Contract Work 26Chapter 4 Swing Contracts For Iso-Managed Wholesale Power Markets 294.1 Swing Contract Overview 294.2 Swing Contracts: General Formulation 294.3 Swing Contracts in Firm or Option Form 31Chapter 5 Illustrative Swing-Contract Reserve Offers 355.1 Chapter Preview 355.2 A Simple Energy-Block Swing Contract in Firm Form 375.3 An Energy-Block Swing Contract in Option Form 405.4 Swing-Contract Implementation of Standard Supply Offers 415.5 A Swing Contract Offering Continuous Swing (Flexibility) in Power and Ramp 475.6 A Swing Contract Offering Battery Services 495.7 Swing-Contract Facilitation of Private Bilateral Contracting 52Chapter 6 Swing-Contract Market Design 556.1 Chapter Preview 556.2 General Swing-Contract Market Formulation 556.3 Financial and Physical Feasibility of Swing-Contract Offers 586.4 Reserve Bids 586.5 Handling of Fixed Reserve Bids and Non-Dispatched Power 606.6 Performance Penalties and Incentives 606.7 ISO Cost Allocation 61Chapter 7 Swing-Contract Market Optimization: Base-Case Milp Formulation 677.1 Chapter Preview 677.2 General Assumptions and Notation 687.3 Discretization of the ISO's Optimization Problem 697.4 ISO Objective Function 737.5 Complete Analytical MILP Formulation 747.6 Additional Discussion of Optimization Aspects 767.7 Five-Bus Test Case 787.8 Thirty Bus Test Case with Adaptive Reserve Zones 81Chapter 8 Inclusion Of Reserve Offers With Price Swing 858.1 Chapter Preview 858.2 Cost Function Preliminaries 868.3 MILP Tractable form of Reserve Offers with Price Swing 87Chapter 9 Inclusion Of Price-Sensitive Reserve Bids 939.1 Chapter Preview 939.2 Incorporation of Benefits 949.3 Modeling of Price-Sensitive Reserve Bids 969.3.1 Standard Demand Function Formulation 969.3.2 Reserve Bids with Time-of-Use Pricing 979.3.3 Reserve Bids with Price Swing 979.3.4 Reserve Bids Directly Expressed as Benefit Functions 999.4 MILP Tractable Approximation of Benefit Functions 100Chapter 10 The Linked Swing-Contract Market Design 10510.1 Chapter Preview 10510.2 Multistage Optimization and Time Inconsistency 10710.3 Settlement Time-Consistency of Swing-Contract Markets 10910.4 Swing-Contract Long-Term Forward Markets 11110.5 Swing-Contract Short-Term Forward Markets 11210.6 Swing-Contract Very Short-Term Forward Markets 11310.7 Swing-Contract Deployment in Real-Time Operations 114Chapter 11 Illustration: Linked Day-Ahead And Hour-Ahead Swing-Contract Markets 11711.1 Chapter Preview 11711.2 Hour-Ahead Market with Reserve Offers Consisting of Swing-Contract Portfolios 11711.3 SCED Solution for Hour-Ahead Swing-Contract Market 12211.3.1 Overview 12211.3.2 Power Balance 12211.3.3 Coverage of the ISO's Uncertainty Set 12311.3.4 Constrained Minimization of Expected Cost 12511.4 Linked Day-Ahead and Hour-Ahead Markets 126Chapter 12 Standard Modeling Of A Competitive Market 13112.1 Chapter Preview 13112.2 Key Definitions 13112.3 Standard Competitive Market Assumptions 13212.4 Law of One Price for Commodities 13212.5 Competitive Market: Basic Formulation 13312.6 Net Surplus Extraction 13612.7 Market Efficiency Metric 13712.8 Market Efficiency and Pricing Rules 13912.9 Strategic Trade Behavior and Trader Market Power 140CHAPTER 13 US RTO/ISO-Managed Markets: Efficiency And Market Power 14313.1 Chapter Preview 14313.2 Daily Market Operations 14413.3 Illustrative Analytical DAM Formulation 14613.4 Net Surplus Extraction in the Illustrative DAM 14713.5 Market Power in the Illustrative DAM: Type-I Error 15213.6 Market Power in the Illustrative DAM: Type-II Error 15613.7 Market Inefficiency in the Illustrative DAM 16013.8 DAM Performance: General Assessment 16313.9 Scheduling of Bilateral Contracts 165Chapter 14 Comparisons With Swing-Contract Markets 16714.1 Chapter Preview 16714.2 Product Definition in US RTO/ISO-Managed Markets 16814.3 Wholesale Power and the Law of One Price (Not) 17014.4 Differential vs. Uniform Pricing 17114.5 Comparison of SC and Current US DAM Designs 172Chapter 15 Advantages Of The Linked Swing-Contract Market Design 17515.1 Chapter Preview 17515.2 SC Markets are Physically-Covered Insurance Markets 17615.3 Longer-Term SC Markets Support New Investment 17715.3.1 Energy-Only Market 17915.3.2 Centrally Managed Capacity Market 18115.3.3 LSE Bilateral Contract Obligations 18215.4 SC Markets Ensure Revenue Sufficiency 18315.5 SC Markets Ameliorate Merit-Order Concerns 18415.6 SC Markets are Robust-Control Mechanisms 18515.7 SC Markets Reduce Rule Complexity 18615.8 SC Markets Reduce Gaming Opportunities 18715.9 SC Markets have Smaller-Sized Optimizations 18915.10 Additional Advantages of SC Markets 19015.10.1 Ensure a Level Playing Field for Resource Participation 19015.10.2 Permit Co-Optimization of Diverse Reserve 19115.10.3 Appropriately Remunerate Diversity and Flexibility 19115.10.4 Encourage Accurate Forecasting and Dispatch Following 19115.10.5 Ensure Settlement Time-Consistency 191Chapter 16 Gradual Transition To Linked Swing-Contract Markets 19316.1 Chapter Preview 19316.2 A DAM Formulation Permitting Gradual Transition 19516.3 Cost Function Preliminaries for the Transitional DAM 19716.4 MILP SCUC/SCED Optimization for the Transitional DAM 201Chapter 17 Swing-Contract Support For Integrated Transmission And Distribution Systems 20917.1 Chapter Preview 20917.2 Transactive Energy System Design for ITD Systems 21117.3 Role of Distribution Utilities 21517.4 An IDSO-Managed Bid-Based TES Design for Households 21617.5 IDSOs as Grid-Edge Resource Aggregators 21917.6 Swing-Contract Support for IDSO Participation in Wholesale Power Markets 220Chapter 18 Design Evaluation Via The ITD TES Platform 22118.1 Chapter Preview 22118.2 Design Readiness Levels 22218.3 An ITD TES Platform Permitting TES Design Evaluation 22318.4 Illustrative Test Cases: Overview 22618.5 Illustrative Test Cases: Report 22918.5.1 IDSO Peak-Load Reduction Capabilities 22918.5.2 IDSO Load-Matching Capabilities 22918.5.3 Household ITD Test Cases: Discussion 233Chapter 19 Potential Future Research Directions 23519.1 Effective use of Option Swing Contracts 23519.2 Representation of Reserve Bids 23619.3 Compensation for Storage Services 23619.4 Compensation for Reliability Services 23619.5 Representation of Power-Paths 23719.6 Implementation of Contract-Clearing Optimizations for Swing-Contract Markets 23719.7 Gradual Transition to a Swing-Contract Market 238Chapter 20 Conclusion: The Dots Keep Connecting 239Appendix A Appendices 241References 249Index 259

O autorze

LEIGH TESFATSION received the Ph.D. degree in economics from the University of Minnesota, Mpls., in 1975, with a minor in mathematics. She is Research Professor of Economics, Professor Emerita of Economics, and Courtesy Research Professor of Electrical & Computer Engineering, all at Iowa State University. Her principal current research areas are electric power market design and the development of Agent-based Computational Economics (ACE) platforms for the performance testing of these designs. She is the recipient of the 2020 David A. Kendrick Distinguished Service Award from the Society for Computational Economics (SCE) and an IEEE Senior Member. She has served as guest editor and associate editor for a number of journals, including the IEEE Transactions on Power Systems, the IEEE Transactions on Evolutionary Computation, the Journal of Energy Markets, the Journal of Economic Dynamics and Control, the Journal of Public Economic Theory, and Computational Economics.