Market-based Investment in Electricity Transmission Networks: Controllable Flow

This paper discusses unregulated market-based electricity transmissio

Risk-limiting Dispatch with Operation Constraints

As an extension of the current theory of risk-limiting dispatch for a system with large-scale renewable integration, this paper presents a model for risk-limiting dispatch with operation constraints, such as generation limitation and network constraint. By proposing and solving four interrelated models, the problem for risk-limiting dispatch with network constraint is finally solved by using sequential optimization. Through the analysis of the model, the paper points out the feasible procedure of dispatch decision, including determining the optimal output and the generators needed to be scheduled. With this dispatch approach, the lowest dispatch cost of the whole dispatch process can be obtained.published_or_final_versio

Efficient Decentralized Economic Dispatch for Microgrids with Wind Power Integration

Decentralized energy management is of paramount importance in smart microgrids with renewables for various reasons including environmental friendliness, reduced communication overhead, and resilience to failures. In this context, the present work deals with distributed economic dispatch and demand response initiatives for grid-connected microgrids with high-penetration of wind power. To cope with the challenge of the wind's intrinsically stochastic availability, a novel energy planning approach involving the actual wind energy as well as the energy traded with the main grid, is introduced. A stochastic optimization problem is formulated to minimize the microgrid net cost, which includes conventional generation cost as well as the expected transaction cost incurred by wind uncertainty. To bypass the prohibitively high-dimensional integration involved, an efficient sample average approximation method is utilized to obtain a solver with guaranteed convergence. Leveraging the special infrastructure of the microgrid, a decentralized algorithm is further developed via the alternating direction method of multipliers. Case studies are tested to corroborate the merits of the novel approaches.Comment: To appear in IEEE GreenTech 2014. Submitted Sept. 2013; accepted Dec. 201

Removing Cross-Border Capacity Bottlenecks in the European Natural Gas Market: A Proposed Merchant-Regulatory Mechanism

We propose a merchant-regulatory framework to promote investment in the European natural gas network infrastructure based on a price cap over two-part tariffs. As suggested by Vogelsang (2001) and Hogan et al. (2010), a profit maximizing network operator facing this regulatory constraint will intertemporally rebalance the variable and fixed part of its two-part tariff so as to expand the congested pipelines, and converge to the Ramsey-Boiteaux equilibrium. We confirm this with actual data from the European natural gas market by comparing the bi-level price-cap model with a base case, a no-regulation case, and a welfare benchmark case, and by performing sensitivity analyses. In all cases, the incentive model is the best decentralized regulatory alternative that efficiently develops the European pipeline system.regulation, transportation network, investment

Market-based Investment in Electricity Transmission Networks: Controllable Flow

This paper discusses unregulated market-based electricity transmission investment by third parties as opposed to regulated investment by designated transmission system operators. The analysis is set against a European and Australian institutional background and focuses on interconnection of different systems. The paper explores four areas: economies of scale, market power, detrimental investment and risks. The analysis argues for restricting market-based investment to controllable flow (DC or FACTS) only. This is in line with what seems to take place in practice in Europe and Australia, it strikes a balance between pros and cons of market-based investment and draws a sharp line between regulated and unregulated investments.electricity, transmission, merchant, investment

Market coupling and the organization of counter-trading: separating energy and transmission again?

The horizontal integration of the energy market and the organization of transmission services remain two open issues in the restructured European electricity sector. The coupling of the French, Belgian and Dutch electricity markets (the trilateral market) in November 2006 was a real success that the inclusion of Germany to the trilateral market should soon prolong. But the extension of market coupling whether in Central Western Europe or in other European regions encounters several difficulties and the future remains far from clear. The highly meshed grid of continental Europe complicates things and it is now sometimes recognized that the penetration of wind will further exacerbate these difficulties. The nodal system could go a long way towards solving these problems, but its implementation is not yet foreseen in the EU. This paper analyzes versions of market coupling that differ by the organization of counter- trading. While underplayed in current discussions, counter-trading will become a key element of market coupling as its geographic coverage expands and wind penetration develops. We consider a stylized six node example found in the literature and simulate market coupling for different assumptions of zonal decomposition and coordination of TSOs. We show that these assumptions matter: market coupling can be quite vulnerable to the particular situation on hand; counter-trading can work well or completely fail depending on the case and it is not clear beforehand what will prevail. Our analysis relies on standard economic notions such as social welfare, Nash and Generalized Nash equilibrium. But the use of these notions is probably novel. We also simplify matters by assuming away strategic behaviour. The nodal organization is the reference first best scenario: different zonal decompositions and degrees of coordinations are then studied with respect to this first best solution.D52, D58, Q40

Merchant Electricity Transmission Expansion: A European Case Study

We apply a merchant transmission model to the trilateral market coupling (TLC) arrangement among the Netherlands, Belgium and France as a generic example, and note that it can be applied to any general market splitting or coupling of Europe's different national power markets. In this merchant framework; the system operator allocates financial transmission rights (FTRs) to investors in transmission expansion based upon their preferences, and revenue adequacy. The independent system operator (ISO) preserves some proxy FTRs to deal with potential negative externalities due to an expansion project. This scheme proves to be capable in providing incentives for investment in transmission expansion projects within TLC areas.transmission expansion, trilateral market coupling, Europe, financial transmission rights, congestion management

A Scenario Approach for Operational Planning with Deep Renewables in Power Systems

This work is both enabled by and motivated by the development of new resources and technologies into the power system market operation practice. On one hand, penetration level of uncertain generation resources is constantly increasing and on the other hand, retirement of some of the conventional energy resources like coal power plants makes market operations an attractive topic for both theoretical and state-of-the-art research. In addition, as generation uncertainty increases, it impacts the true cost of energy and causes it to be volatile and on average higher. This work targets flexibility enhancement to the grid to potentially eliminate the impact of uncertainty. Two different viewpoints in two different markets for electricity is targeted. This dissertation looks at the real-time market generation adequacy from the Independent System Operator’s point of view, and the day-ahead scheduling of energy and reserve procurement from the market participant’s point of view. At the real time scale, the emphasis is on developing fast and reliable optimization techniques in solving look-ahead security constrained economic dispatch. The idea is when forecast accuracy gets sharper closer to the real-time and slower power plants retiring in recent years, market participants will spend more and more attention to the real-time market in comparison to the day ahead operation in terms of the energy market. To address it, a data-driven model with rigorous bounds on the risk is proposed. In particular, we formulate the Look-Ahead Security Constrained Economic Dispatch (LAED) problem using the scenario approach techniques. This approach takes historical sample data as input and guarantees a tunable probability of violating the constraints according to the input data size. Scalability of the approach to real power systems was tested on a 2000 bus synthetic grid. The performance of the solution was compared against state-of-the-art deterministic approach as well as a robust approach. Although the real-time market is primarily for energy trading, the day-ahead market is the market for ancillary service trading. In this dissertation, at the day-ahead scale, the focus is on providing ancillary service to the grid by controlling the consumption of millions of privately owned ii pool pumps in the US, while benefiting from energy arbitrage. A conceptual framework, a capacity assessment method, and an operational planning formulation to aggregate flexible loads such as inground swimming pool pumps for a reliable provision of spinning reserve is introduced. Enabled by the Internet of Things (IoT) technologies, many household loads offer tremendous opportunities for aggregated demand response at wholesale level markets. The spinning reserve market is one that fits well in the context of swimming pool pumps in many regions of the U.S. and around the world (e.g. Texas, California, Florida). This work offers rigorous treatment of the collective reliability of many pool pumps as firm generation capacity. Based on the reliability assessment, optimal scheduling of pool pumps is formulated and solved using the deterministic approach and the scenario approach. The case study is performed using empirical data from Electric Reliability Council of Texas (ERCOT). Cost-benefit analysis based on a city suggests the potential business viability of the proposed framework