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Internalization of reliability unit commitment in day-ahead market: Analysis and interpretation

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  • Zhang, Menghan
  • Yang, Zhifang
  • Lin, Wei
  • Yu, Juan
  • Li, Wenyuan

Abstract

To ensure enough generation capacities for real-time operation, reliability unit commitment (RUC) is implemented beyond the day-ahead market (DAM) of power industries. The additional commitments and decisions, which arrange more online generation capacities, ensure the reliability of the power supply. However, the out-of-market RUC leads to incentive issues for reliability units (RUs) and ultimately increases the out-of-market payments. To solve these problems, the compensation for RUs, including their production costs and lost opportunity costs associated with RUC, is thoroughly analyzed. Then, an internalizing framework is presented to integrate the RUC into the DAM. The market-oriented method can determine the RUs in DAM and reduces out-of-market payments. Note that the internalization involves additional resources and influences the compensations for entities’ services. In this paper, the related payments for all resources are reasonably implemented and the components of the resulted market-settlement surplus are decomposed. Case studies on the IEEE 30-bus and Polish systems demonstrate that the proposed method can reduce the out-of-market payments brought by RUC and improve economic efficiencies.

Suggested Citation

  • Zhang, Menghan & Yang, Zhifang & Lin, Wei & Yu, Juan & Li, Wenyuan, 2022. "Internalization of reliability unit commitment in day-ahead market: Analysis and interpretation," Applied Energy, Elsevier, vol. 326(C).
    • Handle: RePEc:eee:appene:v:326:y:2022:i:c:s0306261922011837
    DOI: 10.1016/j.apenergy.2022.119926
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    References listed on IDEAS

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    1. Attar, Mehdi & Repo, Sami & Mann, Pierre, 2022. "Congestion management market design- Approach for the Nordics and Central Europe," Applied Energy, Elsevier, vol. 313(C).
    2. Fatras, Nicolas & Ma, Zheng & Jørgensen, Bo Nørregaard, 2022. "Process-to-market matrix mapping: A multi-criteria evaluation framework for industrial processes’ electricity market participation feasibility," Applied Energy, Elsevier, vol. 313(C).
    3. Brooks, Adria E. & Lesieutre, Bernard C., 2022. "A locational marginal price for frequency balancing operations in regulation markets," Applied Energy, Elsevier, vol. 308(C).
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    Cited by:

    1. Stover, Oliver & Nath, Paromita & Karve, Pranav & Mahadevan, Sankaran & Baroud, Hiba, 2024. "Dependence structure learning and joint probabilistic forecasting of stochastic power grid variables," Applied Energy, Elsevier, vol. 357(C).

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