Procurement And Pricing Of AGC And Operating Reserve In Electricity Market Environment

Experiences of the worldwide power industry restructuring demonstrate that the reforms in electricity sector must respect the fundamental principles of electricity industry development. A successful electricity market should guarantee safe, stable and reliable electricity supply to the society. Ancillary services (AS), such as automatic generation control (AGC) and operation reserves, play an important role in maintaining power system reliability and security while economically efficient transactions are accommodated in an open electricity market.The restructuring of power system presents many new challenges for procuring and pricing AGC and operating reserve. Although much research work on developing efficient procuring and pricing of such generation resource has been done, there are still many important issues to be solved. This thesis focuses on several important, yet difficult, problems concerning procurement and pricing of AGC and operating reserve in the electricity market environment, such as forecasting and procurement of AGC capacity requirement, coordination of dispatching and pricing strategies in energy and AGC markets, procurement and pricing of operating reserve with economic efficiency and reliability requirement well balanced, efficient transactions of operating reserve in a regional power market. Models and approaches for dealing with these problems are proposed and numerical simulations made.First, a new framework to forecast AGC capacity requirement based on Zhejiang Provincial Electricity Market is presented by taking some relevant factors such as the control performance standard (CPS), units' regulation capabilities and load forecast errors into account. A procuring mechanism for AGC capacity is then formulated by trading off between penalties for tie-line power flow deviations and costs of AGC capacity procurement.Secondly, a stochastic optimization decision-making model for determining optimal AGC capacity requirement is presented with penalties of tie-line power flow deviations taken into account. An optimal AGC regulating algorithm is then suggested which reveals that a trade-off between economic efficiency and system security must be made by the market operator.Thirdly, coordination of dispatching strategies in energy and AGC markets is presented in the setting of a pool-based market. Of particular interest is the modeling of lost opportunity cost and withholding of capacity introduced by pricing analysis of co-optimization.Fourthly, a pricing scheme for operating reserves, which is based on the peak-load pricing theory and is compatible with auction-based dispatching in the electricity market environment, is proposed. Under assumptions that accurate system outage cost is known and prices bids by generation companies are consistent with their true costs, both economic efficiency and system reliability can be simultaneously taken into account in the proposed scheme.Fifthly, the power industry in China is now under the way of restructuring and regional power markets are expected to be established. A novel mechanism for determining and procuring operating reserve requirements in regional power markets (RPM) is presented. In addition, an allocation mechanism of associated benefits is developed based on the well-developed cooperative game theory. This allocation mechanism could eliminates conflicts of interest between the region-wide profit and inter-area own profit.Lastly, conclusions are made based on the research outcomes, and directions for future research indicated.