Pricing balancing ancillary services for low-inertia power systems under uncertainty and nonconvexity

Zhihao Li and Yinliang Xu

Applied Energy, 2025, vol. 377, issue PC, No S0306261924019743

Abstract: In renewable-rich power systems, declining rotational inertia and unpredictable power fluctuations make the system vulnerable to contingencies. Recently, this issue has garnered significant attention in practice and academia, aiming to enhance power system reliability through market mechanisms. This paper proposes a day-ahead joint market that integrates energy, reserve, inertia, and frequency response services. A frequency-constrained unit commitment (UC) model is developed employing a distributionally robust chance-constrained (DRCC) approach to account for the uncertainties in wind farm outputs. Additionally, a convex hull pricing (CHP) model is introduced to minimize uplift payments associated with the nonconvex nature of commitment variables. Case studies conducted on a 5-bus and a 118-bus power system demonstrate the efficacy of the proposed market design in reducing operational costs and promoting renewable energy utilization. Furthermore, the results highlight the effectiveness of the CHP model in minimizing the uplifts and enhancing market transparency.

Keywords: Ancillary services market; Frequency-constrained unit commitment; Distributionally robust chance constraint; Convex hull pricing (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1016/j.apenergy.2024.124591

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