Policy, Markets, and Analytics
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ItemThe Impact of Extreme Weather Events on Planning for Resource Adequacy( 2022-01-04)Resource Adequacy in the electric power industry has historically focused on sufficient capacity (MW) to serve load on what was forecast to be the worst demand day of the year. The incorporation of intermittent resources both in front of and behind the meter, common mode events and the realization that the metric for reliability should focus on the loss to consumers is refocusing resource adequacy on probabilistic approaches to measurement and analysis. In this paper we focus on planning for resource adequacy given an increasingly stochastic environment in which extreme events caused in large part by changing weather patterns are having increasingly devastating impacts on consumers. These events can no longer be perceived and as being independent (the outage of a generating unit or a line) but are correlated, statistically in both space and time. We argue that there is a need for the definition of probabilistic metrics and methodologies that, over space and time can be used to incorporate the stochastics of common mode and high impact supply disruptions
ItemPrimary Frequency Response Reserve Products for Inverter-Based Resources( 2022-01-04)Primary frequency control in power systems is being challenged by the large-scale integration of inverter-based resources (IBRs) because they do not typically respond to frequency fluctuations. This paper suggests introducing new reserve products into the electricity market that provide incentive for IBRs to contribute to primary frequency control in ways that take advantage of their fast-acting capabilities. In addition to a Primary Frequency Response (PFR) reserve product, which accommodates standard droop control, we suggest introducing a Fast Frequency Response (FFR) reserve product, a reserve product for Virtual Inertia (VI), which is also known as synthetic inertia, and an inertia product. We adopt a reserve requirement that guarantees sufficient primary frequency response reserve to adequately arrest frequency decline in response to a large generator outage within a certain margin. We place this reserve requirement into a real-time co-optimization problem, derive prices for each product and analyze the incentives provided to IBRs.
ItemMechanism Design for Efficient Nash Equilibrium in Oligopolistic Markets( 2022-01-04)This paper investigates the efficiency loss in social cost caused by strategic bidding behavior of individual participants in a supply-demand balancing market, and proposes a mechanism to fully recover equilibrium social optimum via subsidization and taxation. We characterize the competition among supply-side firms to meet given inelastic demand, with linear supply function bidding and the proposed efficiency recovery mechanism. We show that the Nash equilibrium of such a game exists under mild conditions, and more importantly, it achieves the underlying efficient supply dispatch and the market clearing price that reflects the truthful system marginal production cost. Further, the mechanism can be tuned to guarantee self-sufficiency, i.e., taxes collected counterbalance subsidies needed. Extensive numerical case studies are run to validate the equilibrium analysis, and we employ individual net profit and a modified version of Lerner index as two metrics to evaluate the impact of the mechanism on market outcomes by varying its tuning parameter and firm heterogeneity.
ItemLong-term Impacts of Energy Storage Providing Regulation on Power Plant Retirements and System Emissions( 2022-01-04)Energy storage can provide a variety of economic and reliability benefits to the grid; however, the overall environmental impacts of storage are not always positive, as some studies have shown. In this paper, we explore the long-term impacts of using storage to provide frequency regulation. Specifically, using an optimization model that co-optimizes unit commitment, energy, and regulation capacity, we explore the effect of increasing penetrations of regulation-providing storage on dispatch, prices, profit, retirements, and long-term system-wide CO2 emissions. We also investigate how the impacts change when retired generators are replaced by renewables. We find that storage can lead to increases or decreases in emissions, depending on system parameters and whether renewables replace retired capacity. Additionally, we find that long-term impacts can be in different directions than short-term impacts. This points to the need for new mechanisms to ensure desired environmental outcomes are achieved when using so-called "green" technologies.