Journal
IEEE TRANSACTIONS ON POWER SYSTEMS
Volume 32, Issue 2, Pages 1282-1292Publisher
IEEE-INST ELECTRICAL ELECTRONICS ENGINEERS INC
DOI: 10.1109/TPWRS.2016.2583435
Keywords
California ISO; MPEC; performance-based regulation market; price-maker; optimal bidding; system dynamics
Categories
Funding
- NSF [125351, 1307756, 1319798]
- Direct For Computer & Info Scie & Enginr
- Division Of Computer and Network Systems [1319798] Funding Source: National Science Foundation
- Div Of Electrical, Commun & Cyber Sys
- Directorate For Engineering [1307756] Funding Source: National Science Foundation
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In this paper, we address the problem of optimal bidding in performance-based regulation markets for a large price-maker regulation resource. Focusing on the case of the California Independent System Operator (ISO), detailed market components are considered, such as regulation capacity payment, regulation mileage payment, performance accuracy adjustment, automatic generation control dispatch, and participation factor. Our analysis also incorporates system dynamics of the regulation resource for different resource types and technologies. In principle, our problem formulation is a mathematical program with equilibrium constraints (MPEC). However, our fundamentally new formulations introduce several new challenges in solving the MPEC problem in the context of performance-based regulation markets that are not previously addressed. In fact, global optimization techniques fail to solve the original nonlinear program due to its complexity. Therefore, we undergo several innovative steps to transform the problem into a mixed-integer linear program which is solved with accuracy, reliability, and computational efficiency. Insightful case studies are presented using data from a California ISO regulation market project.
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