A Framework of Integrating Manufacturing Plants in Smart Grid Operation: Manufacturing Flexible Load Identification

In the deregulated electricity markets run by Independent System Operator (ISO), a two-settlement (day-ahead and real-time) process is typically used to determine the electricity price to the end-use customers at different buses. In the day-ahead settlement, the demand is predicted at each bus based on the previous consumption behavior of the consumers and thus, Locational Marginal Price (LMP) can be determined and shared to the consumers. A significant gap is usually observed between the planned and real-time demands due to the uncertainties of the weather (temperature, wind-speed etc.), the intensity of business, and everyday activities. Therefore, a large price variation may occur in the real-time market and the dispatching plan needs to be adjusted to respond to the variation. To reduce the gap between the day-ahead and real-time dispatching plans, a modified framework, i.e., a three-settlement process considering the integration of the manufacturing plants into the existing two-settlement process is proposed in this study. The manufacturing end-use customers report the flexibility of their loads to the ISO so that the ISO can update the day-ahead price through an updated dispatching plan that utilizes the feedback of the load flexibility from the manufacturers. A mathematical model is developed to identify the flexible and non-flexible loads of the manufacturers. Particle Swarm Optimization (PSO) is used to solve this mathematical model and a case study is conducted to illustrate the effectiveness of the model

Financial Engineering for Energy System Capital Budgeting

The United State energy industry is experiencing a major paradigm shift. This conventional vertically integrated energy industry is gradually transformed to a competitive market environment—a deregulated energy market. The market and regulatory frameworks are expected to continue to evolve in the future. Market participants are emphasizing more on profit maximization as returns on investment are no longer guaranteed. Therefore, risk management and capital budgeting play critical roles in energy system planning. Planning always involves uncertainties. When there are uncertainties, there are risks involve. This dissertation concentrates on the application of Real Options Analysis, ROA, especially lattice method, to energy system capital budgeting. Lattice method has one major weakness: massive bush of lattice. This dissertation proposes a method known as Binomial Lattice-Value at Risk approach to solve the curse of lattice dimensionality. Due to deregulation, market participants\u27 incentives have changed. Generation companies, GENCOs, are no longer willing to release their cost information or strategic plans. Thus, this dissertation introduces the implementation of Profit at Risk ideology into decision analysis, which created an efficient approach known as Binomial Lattice-Profit at Risk, BL-PaR. With the price of fuels soaring and environmental concerns growing larger, the expansion of ROA into renewable energy sector is desirable. Renewable energy has significant advantages as it does not contribute to greenhouse gases. This research focuses on wind energy, which is uncontrollable and unpredictable. A decision based solution of incorporating wind energy with pump storage hydro, PSH, and financial contract hedging is introduced. This energy technology integration is capable of increasing the available-capability of wind energy to be as effective as thermal unit. A physical asset hedging known as the Look Ahead Optimization, LAO, method is then applied to both wind unit and PSH system. This optimization method minimizes the size of hedging and maximizes profit by obtaining the optimal energy storage. The combination of the LAO method with BL-PaR approach achieves several critical goals. Together with the inclusion of financial contract hedging via financial transmission rights, FTRs, a double-protections mechanism is established. The evaluation of FTRs portfolio using ROA enables the risk management process to run efficiently

Supply function equilibrium analysis for electricity markets

The research presented in this Thesis investigates the strategic behaviour of generating firms in bid-based electricity pool markets and the effects of control methods and network features on the electricity market outcome by utilising the AC network model to represent the electric grid. A market equilibrium algorithm has been implemented to represent the bi-level market problem for social welfare maximization from the system operator and utility assets optimisation from the strategic market participants, based on the primal-dual interior point method. The strategic interactions in the market are modelled using supply function equilibrium theory and the optimum strategies are determined by parameterization of the marginal cost functions of the generating units. The AC power network model explicitly represents the active and reactive power flows and various network components and control functions. The market analysis examines the relation between market power and AC networks, while the different parameterization methods for the supply function bids are also investigated. The first part of the market analysis focuses on the effects of particular characteristics of the AC network on the interactions between the strategic generating firms, which directly affect the electricity market outcome. In particular, the examined topics include the impact of transformer tap-ratio control, reactive power control, different locations for a new entry’s generating unit in the system, and introduction of photovoltaic solar power production in the pool market by considering its dependencyon the applied solar irradiance. The observations on the numerical results have shown that their impact on the market is significant and the employment of AC network representation is required for reliable market outcome predictions and for a better understanding of the strategic behaviour as it depends on the topology of the system. The analysis that examines the supply function parameterizations has shown that the resulting market solutions from the different parameterization methods can be very similar or differ substantially, depending on the presence and level of network congestion and on the size and complexity of the examined system. Furthermore, the convergence performance of the implemented market algorithm has been examined and proven to exhibit superior computational efficiency, being able to provide market solutions for large complex AC systems with multiple asymmetric firms, providing the opportunity for applications on practical electricity markets

Model based forecasting for demand response strategies

The incremental deployment of decentralized renewable energy sources in the distribution grid is triggering a paradigm change for the power sector. This shift from a centralized structure with big power plants to a decentralized scenario of distributed energy resources, such as solar and wind, calls for a more active management of the distribution grid. Conventional distribution grids were passive systems, in which the power was flowing unidirectionally from upstream to downstream. Nowadays, and increasingly in the future, the penetration of distributed generation (DG), with its stochastic nature and lack of controllability, represents a major challenge for the stability of the network, especially at the distribution level. In particular, the power flow reversals produced by DG cause voltage excursions, which must be compensated. This poses an obstacle to the energy transition towards a more sustainable energy mix, which can however be mitigated by using a more active approach towards the control of the distribution networks. Demand side management (DSM) offers a possible solution to the problem, allowing to actively control the balance between generation, consumption and storage, close to the point of generation. An active energy management implies not only the capability to react promptly in case of disturbances, but also to ability to anticipate future events and take control actions accordingly. This is usually achieved through model predictive control (MPC), which requires a prediction of the future disturbances acting on the system. This thesis treat challenges of distributed DSM, with a particular focus on the case of a high penetration of PV power plants. The first subject of the thesis is the evaluation of the performance of models for forecasting and control with low computational requirements, of distributed electrical batteries. The proposed methods are compared by means of closed loop deterministic and stochastic MPC performance. The second subject of the thesis is the development of model based forecasting for PV power plants, and methods to estimate these models without the use of dedicated sensors. The third subject of the thesis concerns strategies for increasing forecasting accuracy when dealing with multiple signals linked by hierarchical relations. Hierarchical forecasting methods are introduced and a distributed algorithm for reconciling base forecasters is presented. At the same time, a new methodology for generating aggregate consistent probabilistic forecasts is proposed. This method can be applied to distributed stochastic DSM, in the presence of high penetration of rooftop installed PV systems. In this case, the forecasts' errors become mutually dependent, raising difficulties in the control problem due to the nontrivial summation of dependent random variables. The benefits of considering dependent forecasting errors over considering them as independent and uncorrelated, are investigated. The last part of the thesis concerns models for distributed energy markets, relying on hierarchical aggregators. To be effective, DSM requires a considerable amount of flexible load and storage to be controllable. This generates the need to be able to pool and coordinate several units, in order to reach a critical mass. In a real case scenario, flexible units will have different owners, who will have different and possibly conflicting interests. In order to recruit as much flexibility as possible, it is therefore importan

Supply function equilibrium analysis for electricity markets

The research presented in this Thesis investigates the strategic behaviour of generating firms in bid-based electricity pool markets and the effects of control methods and network features on the electricity market outcome by utilising the AC network model to represent the electric grid. A market equilibrium algorithm has been implemented to represent the bi-level market problem for social welfare maximization from the system operator and utility assets optimisation from the strategic market participants, based on the primal-dual interior point method. The strategic interactions in the market are modelled using supply function equilibrium theory and the optimum strategies are determined by parameterization of the marginal cost functions of the generating units. The AC power network model explicitly represents the active and reactive power flows and various network components and control functions. The market analysis examines the relation between market power and AC networks, while the different parameterization methods for the supply function bids are also investigated. The first part of the market analysis focuses on the effects of particular characteristics of the AC network on the interactions between the strategic generating firms, which directly affect the electricity market outcome. In particular, the examined topics include the impact of transformer tap-ratio control, reactive power control, different locations for a new entry’s generating unit in the system, and introduction of photovoltaic solar power production in the pool market by considering its dependencyon the applied solar irradiance. The observations on the numerical results have shown that their impact on the market is significant and the employment of AC network representation is required for reliable market outcome predictions and for a better understanding of the strategic behaviour as it depends on the topology of the system. The analysis that examines the supply function parameterizations has shown that the resulting market solutions from the different parameterization methods can be very similar or differ substantially, depending on the presence and level of network congestion and on the size and complexity of the examined system. Furthermore, the convergence performance of the implemented market algorithm has been examined and proven to exhibit superior computational efficiency, being able to provide market solutions for large complex AC systems with multiple asymmetric firms, providing the opportunity for applications on practical electricity markets.EThOS - Electronic Theses Online ServiceEngineering and Physical Sciences Research Council (Great Britain) (EPSRC)University of Warwick (UoW)GBUnited Kingdo