Covers the latest practices, challenges and theoretical advancements in the domain of balancing economic efficiency and operation risk mitigation
This book examines both system operation and market operation perspectives, focusing on the interaction between the two. It incorporates up-to-date field experiences, presents challenges, and summarizes the latest theoretic advancements to address those challenges. The book is divided into four parts. The first part deals with the fundamentals of integrated system and market operations, including market power mitigation, market efficiency evaluation, and the implications of operation practices in energy markets. The second part discusses developing technologies to strengthen the use of the grid in energy markets. System volatility and economic impact introduced by the intermittency of wind and solar generation are also addressed. The third part focuses on stochastic applications, exploring new approaches of handling uncertainty in Security Constrained Unit Commitment (SCUC) as well as the reserves needed for power system operation. The fourth part provides ongoing efforts of utilizing transmission facilities to improve market efficiency, via transmission topology control, transmission switching, transmission outage scheduling, and advanced transmission technologies. Besides the state-of-the-art review and discussion on the domain of balancing economic efficiency and operation risk mitigation, this book:
Describes a new approach for mass market demand response management, and introduces new criteria to improve system performance with large scale variable generation additions
Reviews mathematic models and solution methods of SCUC to help address challenges posed by increased operational uncertainties with high-penetration of renewable resources
Presents a planning framework to account for the value of operational flexibility in transmission planning and to provide market mechanism for risk sharing
Power Grid Operations in a Market Environment: Economic Efficiency and Risk Mitigation is a timely reference for power engineers and researchers, electricity market traders and analysts, and market designers.
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Yes, you can access Power Grid Operation in a Market Environment by Hong Chen in PDF and/or ePUB format, as well as other popular books in Physical Sciences & Energy. We have over one million books available in our catalogue for you to explore.
CHAPTER 1 BALANCE ECONOMIC EFFICIENCY AND OPERATION RISK MITIGATION
Hong Chen and Jianwei Liu
SYSTEM OPERATION AND MARKET operation are tightly coupled. Electricity market operation is built upon secure system operation, trying to use market signals to address system operation needs and achieve economic efficiency. By responding to market price signals, market participants help with system operation. Therefore, the integrated system and market operation can be viewed as an engineering control system with dynamics and stability issues.
The integrated operation has a multifaceted nature. The ultimate goal is to reach the equilibrium of economic efficiency and operation risk mitigation. Finding and approximating equilibrium is an emerging frontline topic in the electricity market business.
This chapter reviews the state-of-the-art wholesale market structures and products, with the focus on their interactive impacts on daily system operations. Current challenges in approximating the equilibrium at independent system operator (ISO)/regional transmission operator (RTO) are also discussed.
Heuristic engineering efforts to approximate and achieve electricity market equilibrium at ISO/RTO have gained extensive attention from both market participants and regulatory agencies. Pennsylvania–New Jersey–Maryland (PJM)'s experience on evaluating and improving economic efficiency is discussed as a successful industrial practice in this domain. The practice of perfect dispatch (PD) at PJM has effectively measured economic efficiency in the PJM wholesale electricity market and has successfully provided guidance to system operators through daily operation. The PD practice has demonstrated over $1 billion in production cost saving in the past 8 years, a good example of the huge potential in the research domain of this book.
1.1 POWER SYSTEM OPERATION RISK MITIGATION: THE PHYSICS
1.1.1 An Overview of Power System
The major components of power system are generation resources, demand resources, or load, connected by transmission facilities and distribution facilities. Power system is considered as the largest machine (or control system) in the world [1].
Generation resources can be divided based on fuel types, such as nuclear, hydro, coal, oil, natural gas, diesel, wind, and solar. For demand, normally they are not very controllable to system operation. With smart grid technologies, some are now more responsive to system conditions, called demand response. Transmission facilities include transmission lines, transformers, capacitors, reactors, phase shifters, and FACTs devices, such as static var compensator (SVC) and TCSC. Transmission facilities normally connect to the higher voltage levels, for example, 1000, 765, 500, 345, 230, 138, and 115 kV for bulk power transfer. Distribution facilities normally operate under lower voltage levels (e.g., below 115 kV). Distribution facilities bring electricity down to end customers.
Power system operation is guided by the basic circuit theory: Ohm's law and Kirchhoff's laws:
All the injections into a node are summed to be zero.
The distribution of the flow is based on the resistances and reactances of the branches.
All facilities have physical limitations. As a control system, power system also has its dynamic characteristics and limitations.
Power systems are normally interconnected to reduce total generation requirement, reduce total production cost, and enhance reliability. For example, in North America, there are four major interconnections: the Eastern Interconnection, the Western Interconnection, the Electric Reliability Council of Texas (ERCOT) Interconnection, and the Hydro-Quebec Interconnection [2]. In Europe, there is the synchronous grid of Continental Europe, known as European Network for Transmission System Operators for Electricity (ENTSO-E) [3]. It is the largest synchronous grid in the world.
Frequency and voltage are the two most important parameters of an interconnected power system. They have to be maintained at normal values for stable system and safety of the equipment. For example, 60 Hz frequency is operated in North America and 50 Hz system is dominant in Europe, Asia, and other parts of the world.
1.1.2 System Operation Risk Mitigation
1.1.2.1 Keep Power Balance
Electricity demand is constantly changing in the system, every hour, every minute, and every second. It is significantly impacted by weather conditions and pattern of human activities. Due to limited energy storage devices, generation has to be balanced with demand at all times, which is a moving target.
If the total generation in the system is not balanced with the total system demand, system frequency changes. Over- and under-generation can impact system frequency, causing time error. If generation is higher than demand, frequency becomes higher; if generation is less than demand, frequency becomes lower.
For interconnected power systems, the interchanges with neighboring systems are also important components in keeping power balance. Some of the transactions can be scheduled ahead of time based on the specified rules. Therefore, power balance equation can be expressed by equation (1.1):
(1.1)
where total loss is the energy lost in the system equipment and net interchange is the net flow out of the interconnected system.
All generation resources have their physical limitations, such as time to start, minimum run time, minimum down time, minimum and maximum output, ramp rate, turnaround time, and mill points. To balance generation with demand and maintain system frequency, some generation (normally slow-start generation) has to be scheduled way ahead of time based on forecasted load. As the time is close to real time, more generation (normally fast start) is committed to balance demand. Every 5 min, generation is moved up or down to follow the load. For certain types of generating units which can move up and down within 4 s, called as regulation units, their output can be adjusted based on automatic generation control (AGC), which is often referred as secondary frequency control. The governor control of generators is often called as primary frequency control. In summary, generation is staged to balance with load and maintain system frequency.
Demand forecast, often called as load forecast, is important to schedule and dispatch generation. When scheduling generation 1 day to 1 week ahead, load is normally forecasted hourly for 24 or 168 h ahead of time. Many factors can impact load, therefore, they are factored into load forecast. The main impacting factors are temperature, humidity, wind speed, cloud covering, special social events, such as holidays or weekends. When dispatching generation in real time, very short term load forecast is used to forecast load every 5 min for 1–3 h ahead.
In North America, area control error (ACE) is used to identify the imbalance between generation and load (including interchange). Balance is measured by the frequency of the system. ACE is measured based on equatio...
