
Power Grid Operation in a Market Environment
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PREFACE xi
ACKNOWLEDGMENT xiii
CONTRIBUTORS xv
PART I INTEGRATED SYSTEM AND MARKET OPERATION
CHAPTER 1 BALANCE ECONOMIC EFFICIENCY AND OPERATION RISK MITIGATION 3
Hong Chen and Jianwei Liu
1.1 Power System Operation Risk Mitigation: The Physics 4
1.2 Integrated System and Market Operation: The Basics 11
1.3 Economic Efficiency Evaluation and Improvement: The Economics 20
1.4 Final Remarks 35
Appendix 1.A Nomenclature 36
Appendix 1.B Electricity Market Model 37
References 39
Disclaimer 41
CHAPTER 2 MITIGATE MARKET POWER TO IMPROVE MARKET EFFICIENCY 4
Ross Baldick
2.1 Introduction 43
2.2 Price Formation in Electricity Markets 50
2.3 Price and Offer Caps 52
2.4 Ability and Incentive to Exercise Market Power 53
2.5 Market Power Mitigation Approaches 57
2.6 Conclusion 65
Acknowledgments 65
References 65
PART II UNDER SMART GRID ERA
CHAPTER 3 MASS MARKET DEMAND RESPONSE MANAGEMENT FOR THE SMART GRID 69
Alex D. Papalexopoulos
3.1 Overview 69
3.2 Introduction 72
3.3 Distributed Computing-Based Demand Response Management Approach 74
3.4 The ColorPower Architecture and Control Algorithms 75
3.5 Integration with the Wholesale Energy Market 80
3.6 Equalizing Market Power Between Supply and Demand 83
3.7 Generalization Beyond Demand Response 84
3.8 A Numerical Example 87
3.9 Concluding Remarks 88
Appendix 3.A Nomenclature 89
References 89
CHAPTER 4 IMPROVE SYSTEM PERFORMANCE WITH LARGE-SCALE VARIABLE GENERATION ADDITION 91
Yuri V. Makarov, Pavel V. Etingov, and Pengwei Du
4.1 Review of Regulation and Ancillary Services 92
4.2 Day-Ahead Regulation Forecast at CAISO 93
4.3 Ramping and Uncertainties Evaluation at CAISO 99
4.4 Quantifying the Regulation Service Requirements at ERCOT 103
4.5 Conclusions 111
Appendix 4.A Nomenclature 112
References 113
PART III STOCHASTIC APPLICATIONS
CHAPTER 5 SECURITY-CONSTRAINED UNIT COMMITMENT WITH UNCERTAINTIES 117
Lei Wu and Mohammad Shahidehpour
5.1 Introduction 118
5.2 SCUC 119
5.3 Uncertainties in Emerging Power Systems 125
5.4 Managing the Resource Uncertainty in SCUC 134
5.5 Illustrative Results 155
5.6 Conclusions 163
Appendix 5.A Nomenclature 164
Acknowledgments 166
References 166
CHAPTER 6 DAY-AHEAD SCHEDULING: RESERVE DETERMINATION AND VALUATION 16
Ruiwei Jiang, Antonio J. Conejo, and Jianhui Wang
6.1 The Need of Reserves for Power System Operation 169
6.2 Reserve Determination via Stochastic Programming 170
6.3 Reserve Determination via Adaptive Robust Optimization 179
6.4 Stochastic Programming vs. Adaptive Robust Optimization 182
6.5 Reserve Valuation 185
6.6 Summary, Concluding Remarks, and Research Needs 191
Appendix 6.A Nomenclature 192
References 193
PART IV HARNESS TRANSMISSION FLEXIBILITY
CHAPTER 7 IMPROVED MARKET EFFICIENCY VIA TRANSMISSION SWITCHING AND OUTAGE EVALUATION IN SYSTEM OPERATIONS 197
Kwok W. Cheung and Jun Wu
7.1 Background 197
7.2 Basic Dispatch Model for Market Clearing 198
7.3 Economic Evaluation of Transmission Outage 201
7.4 Optimal Transmission Switching 203
7.5 Selection of Candidate Transmission Lines for Switching and Implementation of OTS 206
7.6 Test Cases 210
7.7 Final Remarks 216
Appendix 7.A Nomenclature 216
References 217
CHAPTER 8 TOWARD VALUING FLEXIBILITY IN TRANSMISSION PLANNING 219
Chin Yen Tee and Marija D. Ilíc
8.1 Introduction 219
8.2 Scale Economies of Transmission Technologies 221
8.3 Disconnect of Current Power System Operational, Planning, and Market Mechanisms 225
8.4 Impact of Operational and Market Practices on Investment Planning 225
8.5 Information and Risk Sharing in the Face of Uncertainties 230
8.6 Challenges in Designing Financial Rights for Flexibility 234
8.7 Conclusions 235
Appendix 8.A Nomenclature 236
Appendix 8.B Mathematical Models Used for Case Studies 238
Appendix 8.C Investment Cost 247
References 248
INDEX 251
CONTRIBUTORS
- Ross Baldick
- (F'07) received B.Sc. degree in mathematics and physics and B.E. degree in electrical engineering from the University of Sydney, Sydney, New South Wales, Australia, and M.S. and Ph.D. degrees in electrical engineering and computer sciences from the University of California, Berkeley, CA, USA, in 1988 and 1990, respectively. From 1991 to 1992, he was a Postdoctoral Fellow with the Lawrence Berkeley Laboratory, Berkeley, CA, USA. In 1992 and 1993, he was an Assistant Professor with Worcester Polytechnic Institute, Worcester, MA, USA. He is currently a Professor with the Department of Electrical and Computer Engineering, the University of Texas at Austin, Austin, TX, USA. His research involves optimization, economic theory, and statistical analysis applied to electric power systems, particularly in the context of increased renewables and transmission. Dr. Baldick is a Fellow of the IEEE and the recipient of the 2015 IEEE PES Outstanding Power Engineering Educator Award.
- Hong Chen
- (SM'07) received her bachelor's (1992) and master's (1995) degrees, both in electrical engineering, from Southeast University, China, and her Ph.D. (2002) degree from University of Waterloo, Canada. From 1995 to 1998, she was with Nanjing Automation Research Institute (NARI), China, where she was engaged in the R&D of EMS power system applications. From 2003 to 2007, she was with ISO New England, as a principal analyst working on energy and ancillary service market design, development, and related analysis. She joined PJM Interconnection in 2007, as a senior consultant working on market and system operation. Dr. Chen is the chair of IEEE PES Power System Operation, Planning and Economics committee, and editor of IEEE Transactions on Power Systems, IEEE Transactions on Smart Grid, and IEEE Power Engineering Letters.
- Kwok W. Cheung
- received his Ph.D. from Rensselaer Polytechnic Institute, Troy, NY, USA, his M.S. from the University of Texas at Arlington, Arlington, TX, USA, and B.S. from National Cheng Kung University, Taiwan, all in Electrical Engineering. Dr. Cheung has over 26 years of experience in the electric power industry. He held various technical lead and project management positions responsible for the design and implementation of a few leading energy and transmission markets worldwide. He is currently a Principal Software Architect at GE Grid Solutions (formerly Alstom Grid). Cheung has authored and co-authored over 90 technical papers published in international journals and conference proceedings and two book chapters. He is a co-holder of six US patents on power system applications. Cheung is a registered professional engineer of the State of Washington, a certified Project Management Professional of PMI and a Distinguished Lecturer of the IEEE Power & Energy Society. Dr. Cheung is a Fellow of the IEEE.
- Antonio J. Conejo,
- professor at the Ohio State University, Columbus, OH, USA, received B.S. from Universidad P. Comillas, Madrid, Spain, M.S. from MIT, Cambridge, MA, USA, and Ph.D. from the Royal Institute of Technology, Stockholm, Sweden. He has published over 165 papers in SCI journals and is the author or co-author of books published by Springer, John Wiley, McGraw-Hill, and CRC. He has been the principal investigator of many research projects financed by public agencies and the power industry and has supervised 19 Ph.D. theses. He is an IEEE Fellow.
- Pengwei Du
- received his B.S.E.E. and M.S. from Southeast University, Nanjing, China, in 1997 and 2000, respectively, and his Ph.D. degree in electric power engineering from Rensselaer Polytechnic Institute, Troy, NY, USA in 2006. Dr. Du is a senior engineer with the Electric Reliability Council of Texas. Prior to this, he was a senior research engineer with Pacific Northwest National Laboratory (PNNL) from 2008 to 2013.
- Pavel V. Etingov
- (M'05) was born in 1976 in Irkutsk, Russia. He graduated with honors from Irkutsk State Technical University, specializing in electrical engineering, in 1997. He was a fellow at the Swiss Federal Institute of Technology in 2000-2001. Etingov received his Ph.D. degree in 2003 from the Energy Systems Institute of the Russian Academy of Sciences, Irkutsk, Russia. He is currently a senior research engineer at Pacific Northwest National Laboratory (PNNL), Richland, WA, USA. He is a member of the IEEE Power & Energy Society (PES), CIGRE, WECC Joint Synchronized Information Subcommittee (JSIS), WECC Modeling and Validation Work Group (MVWG), and North American SynchroPhasor Initiative (NASPI) research analysis task team. His research interests include stability analysis of electric power systems, power system operation, modeling and control, phasor measurement units (PMUs) application, wind and solar power generation, application of artificial intelligence to power systems, and software development.
- Marija D. Ilic
- received her Doctor of Science Degree in Systems Science at Washington University in St. Louis, MO, USA in 1980. She is currently a Professor of Electrical and Computer Engineering and Engineering at Carnegie Mellon University, Pittsburgh, PA, USA, and an Affiliate Professor in the Engineering and Public Policy Department. She is the Director of the Electric Energy Systems Group (EESG) at Carnegie Mellon. She was an Assistant Professor at Cornell University, Ithaca, NY, USA, and tenured Associate Professor at the University of Illinois at Urbana-Champaign, IL, USA. She was then a Senior Research Scientist in the Department of Electrical Engineering and Computer Science, Massachusetts Institute of Technology, Cambridge, MA, USA from 1987 to 2002. She has over 30 years of experience in teaching and research in the area of electrical power system modeling and control. Her main interest is in the systems aspects of operations, planning, and economics of the electric power industry. She has co-authored and co-edited a number of books in her field of interest. Her most recent book is Engineering IT-Enabled Sustainable Electricity Services: The Tale of Two Low-Cost Green Azores Islands. Professor Ilic is an IEEE Fellow.
- Ruiwei Jiang
- received B.S. degree in Industrial Engineering from the Tsinghua University, Beijing, China, in 2009, and Ph.D. degree in Industrial and Systems Engineering from the University of Florida, Gainesville, FL, USA, in 2013. Presently, he is an Assistant Professor with the Department of Industrial and Operations Engineering at the University of Michigan, Ann Arbor, MI, USA. His research interests include power system planning and operations, renewable energy management, and water distribution operations and system analysis.
- Jianwei Liu
- (SM'07) received his bachelor's (1992) and master's (1997) from Southeast University, Nanjing, China, and Ph.D. (2004) from University of Waterloo, Waterloo, Ontario, Canada, all in electrical engineering. He also holds an MBA degree (2009) from Pennsylvania State University, USA. From 1992 to 1999, he worked in the Chinese power industry as EMS engineer and energy project manager, including the first IPP in China. From 2004 to 2007, Dr. Liu was a lead EMS specialist at ISO New England, USA. In September 2007, he joined PJM Interconnection, working on operation support and infrastructure project integration. He is now a Senior Lead Engineer leading the implementation of more than 9000 MW new generation resources and hundreds of bulk transmission upgrade projects. Dr. Liu is an active volunteer in IEEE PES and SA activities, as Utility Forum chair and task force chair. His research interests include sustainable energy system development, distributed generation and energy storage, and network security monitoring and control.
- Dr. Yuri V. Makarov
- received his M.Sc. degree in Computers and Ph.D. in Electrical Engineering from St. Petersburg State Technical University, Russia. He was an Associate Professor at the University, conducted research at the University of Newcastle, University of Sydney, Australia, and Howard University, Washington, DC, USA. After that, he worked for Southern Company, Alabama, and occupied a position at the California Independent System Operator, California. Currently he is appointed as a Chief Scientist of Power Systems at the Pacific Northwest National Laboratory.
- Alex D. Papalexopoulos
- (M'80-SM'85-F'01) received the Electrical and Engineering Diploma from the National Technical University of Athens, Greece, and M.S. and Ph.D. degrees in Electrical Engineering from the Georgia Institute of Technology, Atlanta, GA, USA. He is president and founder of ECCO International, a specialized energy consulting company which provides consulting and software services on electricity market design and system operations and planning within and outside the United States to a wide range of clients such as regulators, governments, ISOs/TSOs, utilities, and other market participants. He has designed some of the most complex energy markets in the world including North and South America, Western and Eastern Europe and Asia. Prior to forming ECCO International, he was a Director of the Electric Industry Restructuring Group at the Pacific Gas and Electric Company in San Francisco, California. He has made substantial contributions in the areas of network grid optimization and pricing, energy market design and competitive bidding, and implementation of EMS applications and real-time control functions. He has published numerous scientific papers in...
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