A two level feedback system design to provide regulation reserve

Demand side management has gained increasing importance as the penetration of renewable energy grows. Based on a Markov jump process modelling of a group of thermostatic loads, this paper proposes a two level feedback system design be- tween the independent system operator (ISO) and the regulation service provider such that two objectives are achieved: (1) the ISO can optimally dispatch regulation signals to multiple providers in real time in order to reduce the requirement for expensive spinning reserves, and (2) each regulation provider can control its thermostatic loads to respond the ISO signal. It is also shown that the amount of regulation service that can be provided is implicitly restricted by a few fundamental parameters of the provider itself, such as the allowable set point choice and its thermal constant. An interesting finding is that the regulation provider’s ability to provide a large amount of long term accumulated regulation and short term signal tracking restrict each other. Simulation results are presented to verify and illustrate the performance of the proposed framework

TARGET2 Unlimited: monetary policy implications of asymmetric liquidity management within the Euro area. CEPS Policy Brief No. 248, 13 July 2011

This paper analyses the implications of a continued divergence of TARGET2 balances for monetary policy in the euro area. The accumulation of TARGET2 claims (liabilities) would make the ECB’s liquidity management asymmetric once the TARGET2 claims in core countries have crowded out central bank credit in those regions. Then while providing scarce liquidity to banks in countries with TARGET2 liabilities, the ECB will need to absorb excess liquidity in countries with TARGET2 claims. We discuss three alternatives and their implications for absorbing excess liquidity in core regions: 1) using market-based measures might accelerate the capital flight from periphery to core countries and would add to the accumulation of risky assets by the ECB; 2) conducting non-market based measures, such as imposing differential (unremunerated) reserve requirements, would distort banking markets and would support the development of shadow banking; and 3) staying passive would lead to decreasing interest rates in core Europe entailing inflationary pressure and overinvestment in those regions and possibly future instability of the banking system

Optimal provision of distributed reserves under dynamic energy service preferences

We propose and solve a stochastic dynamic programming (DP) problem addressing the optimal provision of regulation service reserves (RSR) by controlling dynamic demand preferences in smart buildings. A major contribution over past dynamic pricing work is that we pioneer the relaxation of static, uniformly distributed utility of demand. In this paper we model explicitly the dynamics of energy service preferences leading to a non-uniform and time varying probability distribution of demand utility. More explicitly, we model active and idle duty cycle appliances in a smart building as a closed queuing system with price-controlled arrival rates into the active appliance queue. Focusing on cooling appliances, we model the utility associated with the transition from idle to active as a non-uniform time varying function. We (i) derive an analytic characterization of the optimal policy and the differential cost function, and (ii) prove optimal policy monotonicity and value function convexity. These properties enable us to propose and implement a smart assisted value iteration (AVI) algorithm and an approximate DP (ADP) that exploits related functional approximations. Numerical results demonstrate the validity of the solution techniques and the computational advantage of the proposed ADP on realistic, large-state-space problems