Standardized Contracts with Swing for the Market-Supported Procurement of Energy and Reserve: Illustrative Examples

Deung-Yong Heo () and Leigh Tesfatsion ()

Staff General Research Papers Archive from Iowa State University, Department of Economics

Abstract: The current design of wholesale electric power markets makes it difficult to ensure appropriate compensation for many important services, such as flexibility in start-up times, ramp-rates, power dispatch levels, and duration. This study examines the possibility of facilitating appropriate compensation through the introduction of standardized energy/reserve contracts with swing (flexibility) in their contractual terms. Concrete examples are used to demonstrate how the trading of these standardized contracts can be supported by linked day-ahead and real-time markets in a manner that permits efficient real-time load balancing subject to system constraints and reserve requirements. Comparisons with existing wholesale electric power markets are given, and key policy implications are highlighted.

Keywords: Electric power; standardized contracts; swing (flexibility); energy/reserve co-optimization; linked day-ahead and real-time markets; variable energy resources (search for similar items in EconPapers)
JEL-codes: D4 G1 Q4 (search for similar items in EconPapers)
Date: 2013-11-29
New Economics Papers: this item is included in nep-ene
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http://www2.econ.iastate.edu/papers/p16747-2013-11-29.pdf (application/pdf)
http://www2.econ.iastate.edu/tesfatsi/Standardized ... sfatsion.WP13018.pdf (application/pdf)

Related works:
Working Paper: Standardized contracts with swing for the market-supported procurement of energy and reserve: illustrative examples (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:isu:genres:36747

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