Co-optimization of energy and reserve with Incentives to Wind Generation

Yves Smeers, Sebastian Martin and Jose A. Aguado
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Yves Smeers: Université catholique de Louvain, LIDAM/CORE, Belgium

No 3174, LIDAM Reprints CORE from Université catholique de Louvain, Center for Operations Research and Econometrics (CORE)

Abstract: Transitioning from fossil fuel dominated power systems to high penetrations of intermittent renewable generation is affecting classical electricity market designs. Here, a method is proposed to model and assess the absence of co-optimization of energy and reserve that prevails in the European system. Co-optimization is formulated through an optimization problem (COM), and its absence as an equilibrium problem (EQM) built on Karush-Kuhn-Tucker conditions of agents’ optimization and market clearing equations. EQM cannot be reformulated as a single optimization problem. Market distortions are identified by comparing the complementarity conditions of both models. These are then discussed on system with Feed in Premium to wind generation. Parameters in the models allow to represent different market configurations regarding: available wind generation, Feed in Premium to wind, generators’ risk aversion, and required reserve from wind generation.

Keywords: Co-optimization; energy and reserve; complementarity conditions; market equilibrium (search for similar items in EconPapers)
Pages: 12
Date: 2021-09-21
Note: In: IEEE Transactions on Power Systems, 2021
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:cor:louvrp:3174

DOI: 10.1109/TPWRS.2021.3114376

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