Bi-Level Optimization Considering Uncertainties of Wind Power and Demand Response

Recently, world-wide power systems have been undergone a paradigm change with increasing penetration of renewable energy. The renewable energy is clean with low operation cost while subject to significant variability and uncertainty. Therefore, integration of renewables presents various challenges in power systems. Meanwhile, to offset the uncertainty from renewables, demand response (DR) has gained considerable research interests because of DR’s flexibility to mitigate the uncertainty from renewables. In this dissertation, various power system problems using bi-level optimization are investigated considering the uncertainties from wind power and demand response. In power system planning, reactive power planning (RPP) under high-penetration wind power is studied in this dissertation. To properly model wind power uncertainty, a multi-scenario framework based on alternating current optimal power flow (ACOPF) considering the voltage stability constraint under the worst wind scenario and transmission N-1 contingency is developed. The objective of RPP in this work is to minimize the VAR investment and the expected generation cost. Benders decomposition is used to solve this model with an upper level problem for VAR allocation optimization and generation cost minimization as a lower problem. Then, several problems related wind power and demand response uncertainties under power market operation are investigated. These include: an efficient and effective method to calculate the LMP intervals under wind uncertainty is proposed; the load serving entities’ strategic bidding through a coupon-based demand response (CBDR) with which a load serving entity (LSE) may participate in the electricity market as strategic bidders by offering CBDR programs to customers; the impact of financial transmission right (FTR) with CBDR programs is also studied from the perspective of LSEs; and the stragegic scheduling of energy storages owned by LSEs considering the impact of charging and discharging on the bus LMP. In these problems, a bi-level optimization framework is presented with various objective functions representing different problems as the upper level problems and the ISO’s economic dispatch (ED) as the lower level problem. The bi-level model is addressed with mathematic program with equilibrium constraints (MPEC) model and mixed-integer linear programming (MILP), which can be easily solved with the available optimization software tool

Contingency Management in Power Systems and Demand Response Market for Ancillary Services in Smart Grids with High Renewable Energy Penetration.

Ph.D. Thesis. University of Hawaiʻi at Mānoa 2017

Study Of Stochastic Market Clearing Problems In Power Systems With High Renewable Integration

Integrating large-scale renewable energy resources into the power grid poses several operational and economic problems due to their inherently stochastic nature. The lack of predictability of renewable outputs deteriorates the power grid’s reliability. The power system operators have recognized this need to account for uncertainty in making operational decisions and forming electricity pricing. In this regard, this dissertation studies three aspects that aid large-scale renewable integration into power systems. 1. We develop a nonparametric change point-based statistical model to generate scenarios that accurately capture the renewable generation stochastic processes; 2. We design new pricing mechanisms derived from alternative stochastic programming formulations of the electricity market clearing problem under uncertainty; 3. We devise a novel approach to coordinate strategic operations of multiple noncooperative system operators. The current industry practices are based on deterministic models that do not account for the stochasticity of renewable energy. Therefore, the solutions obtained from these deterministic models will not provide accurate measurements. Stochastic programming (SP) can accommodate the stochasticity of renewable energy by considering a set of possible scenarios. However, the reliability of the SP model solution depends on the accuracy of the scenarios. We develop a nonparametric statistical simulation method to develop scenarios for wind generation using wind speed data. In this method, we address the nonstationarity issues that come with wind-speed time-series data using a nonparametric change point detection method. Using this approach, we retain the covariance structure of the original wind-speed time series in all the simulated series. With an accurate set of scenarios, we develop alternative two-stage SP models for the two-settlement electricity market clearing problem using different representations of the non-anticipativity constraints. Different forms of non-anticipativity constraints reveal different hidden dual information inside the canonical two-stage SP model, which we use to develop new pricing mechanisms. The new pricing mechanisms preserve properties of previously proposed pricing mechanisms, such as revenue adequacy in expectation and cost recovery in expectation. More importantly, our pricing mechanisms can guarantee cost recovery for every scenario. Furthermore, we develop bounds for the price distortion under every scenario instead of the expected distortion bounds. We demonstrate the differences in prices obtained from the alternative mechanisms through numerical experiments. Finally, we discuss the importance of distributed smart grid operations inside the power grid. We develop an information and electricity exchange system among multiple distribution systems. These distribution systems participate/compete in common markets cohere electricity is exchanged. We develop a standard Nash game treating each distribution system (DS) as an individual player who optimizes their strategies separately. We develop proximal best response (BR) schemes to solve this problem. We present results from numerical experiments conducted on three and six DS settings

Economic Engineering Modeling of Liberalized Electricity Markets: Approaches, Algorithms, and Applications in a European Context: Economic Engineering Modeling of Liberalized Electricity Markets: Approaches, Algorithms, and Applications in a European Context

This dissertation focuses on selected issues in regard to the mathematical modeling of electricity markets. In a first step the interrelations of electric power market modeling are highlighted a crossroad between operations research, applied economics, and engineering. In a second step the development of a large-scale continental European economic engineering model named ELMOD is described and the model is applied to the issue of wind integration. It is concluded that enabling the integration of low-carbon technologies appears feasible for wind energy. In a third step algorithmic work is carried out regarding a game theoretic model. Two approaches in order to solve a discretely-constrained mathematical program with equilibrium constraints using disjunctive constraints are presented. The first one reformulates the problem as a mixed-integer linear program and the second one applies the Benders decomposition technique. Selected numerical results are reported

Integration of Massive Plug-in Hybrid Electric Vehicles into Power Distribution Systems: Modeling, Optimization, and Impact Analysis

With the development of vehicle-to-grid (V2G) technology, it is highly promising to use plug-in hybrid electric vehicles (PHEVs) as a new form of distributed energy resources. However, the uncertainties in the power market and the conflicts among different stakeholders make the integration of PHEVs a highly challenging task. Moreover, the integration of PHEVs may lead to negative effects on the power grid performance if the PHEV fleets are not properly managed. This dissertation studies various aspects of the integration of PHEVs into power distribution systems, including the PHEV load demand modeling, smart charging algorithms, frequency regulation, reliability-differentiated service, charging navigation, and adequacy assessment of power distribution systems. This dissertation presents a comprehensive methodology for modeling the load demand of PHEVs. Based on this stochastic model of PHEV, a two-layer evolution strategy particle swarm optimization (ESPSO) algorithm is proposed to integrate PHEVs into a residential distribution grid. This dissertation also develops an innovative load frequency control system, and proposes a hierarchical game framework for PHEVs to optimize their charging process and participate in frequency regulation simultaneously. The potential of using PHEVs to enable reliability-differentiated service in residential distribution grids has been investigated in this dissertation. Further, an integrated electric vehicle (EV) charging navigation framework has been proposed in this dissertation which takes into consideration the impacts from both the power system and transportation system. Finally, this dissertation proposes a comprehensive framework for adequacy evaluation of power distribution networks with PHEVs penetration. This dissertation provides innovative, viable business models for enabling the integration of massive PHEVs into the power grid. It helps evolve the current power grid into a more reliable and efficient system

Optimal GENCO bidding strategy

Electricity industries worldwide are undergoing a period of profound upheaval. The conventional vertically integrated mechanism is being replaced by a competitive market environment. Generation companies have incentives to apply novel technologies to lower production costs, for example: Combined Cycle units. Economic dispatch with Combined Cycle units becomes a non-convex optimization problem, which is difficult if not impossible to solve by conventional methods. Several techniques are proposed here: Mixed Integer Linear Programming, a hybrid method, as well as Evolutionary Algorithms. Evolutionary Algorithms share a common mechanism, stochastic searching per generation. The stochastic property makes evolutionary algorithms robust and adaptive enough to solve a non-convex optimization problem. This research implements GA, EP, and PS algorithms for economic dispatch with Combined Cycle units, and makes a comparison with classical Mixed Integer Linear Programming.;The electricity market equilibrium model not only helps Independent System Operator/Regulator analyze market performance and market power, but also provides Market Participants the ability to build optimal bidding strategies based on Microeconomics analysis. Supply Function Equilibrium (SFE) is attractive compared to traditional models. This research identifies a proper SFE model, which can be applied to a multiple period situation. The equilibrium condition using discrete time optimal control is then developed for fuel resource constraints. Finally, the research discusses the issues of multiple equilibria and mixed strategies, which are caused by the transmission network. Additionally, an advantage of the proposed model for merchant transmission planning is discussed.;A market simulator is a valuable training and evaluation tool to assist sellers, buyers, and regulators to understand market performance and make better decisions. A traditional optimization model may not be enough to consider the distributed, large-scale, and complex energy market. This research compares the performance and searching paths of different artificial life techniques such as Genetic Algorithm (GA), Evolutionary Programming (EP), and Particle Swarm (PS), and look for a proper method to emulate Generation Companies\u27 (GENCOs) bidding strategies.;After deregulation, GENCOs face risk and uncertainty associated with the fast-changing market environment. A profit-based bidding decision support system is critical for GENCOs to keep a competitive position in the new environment. Most past research do not pay special attention to the piecewise staircase characteristic of generator offer curves. This research proposes an optimal bidding strategy based on Parametric Linear Programming. The proposed algorithm is able to handle actual piecewise staircase energy offer curves. The proposed method is then extended to incorporate incomplete information based on Decision Analysis. Finally, the author develops an optimal bidding tool (GenBidding) and applies it to the RTS96 test system

Nodal Pricing in the European Internal Electricity Market

This report summarises the findings of a project, awarded to Tractebel-Engie, to analyse the possibility and the effects of implementing nodal pricing in the European Internal electricity market based on the current and proposed legal framework. The report presents the origins and organisation of nodal pricing and the documented costs and benefits and describes the implementation challenges of applying nodal pricing in the EU.JRC.C.3-Energy Security, Distribution and Market