The economic aspects of operational reliability in electricity markets

Teoman Guler, George Gross, Rajesh Nelli

Research output: Chapter in Book/Report/Conference proceedingConference contribution

Abstract

The implementation of electricity markets in various U.S. jurisdictions has resulted in multiple markets at different time scales for trading the same electricity commodity. This multi-settlement system allows the participation of players with physical resources and loads, as well as financial entities. Given the strong interactions of market and system operations, the multiple markets and the participation of financial players make the operational reliability management an increasingly challenging task. While the nature of the interactions between the system and market operations is well understood on a qualitative basis, the quantification of the operational reliability impacts on the overall economics of electricity markets is, typically, not performed. In this paper, we develop a general approach to quantify the market performance as a function of operational reliability criterion in a multi-settlement environment while taking into account the participation of players with physical resources and load, as well as financial entities. The quantification provides meaningful measures of the monetary and the resource dispatch impacts of the compliance with the operational reliability criterion in force. We illustrate the application of the proposed approach to the ISO-NE system in the quantification of the comparative impacts of two different security criteria for the 2005 - 2006 day-ahead and real-time markets. Through this study, we gain insights into the distinctions between day-ahead and real-time markets, as well as the impacts of participating financial entities in addition to those with physical generation assets or loads.

Original languageEnglish (US)
Title of host publication2007 iREP Symposium- Bulk Power System Dynamics and Control - VII, Revitalizing Operational Reliability
DOIs
StatePublished - Dec 1 2007
Event2007 iREP Symposium- Bulk Power System Dynamics and Control - VII, Revitalizing Operational Reliability - Charleston, SC, United States
Duration: Aug 19 2007Aug 24 2007

Publication series

Name2007 iREP Symposium- Bulk Power System Dynamics and Control - VII, Revitalizing Operational Reliability

Other

Other2007 iREP Symposium- Bulk Power System Dynamics and Control - VII, Revitalizing Operational Reliability
Country/TerritoryUnited States
CityCharleston, SC
Period8/19/078/24/07

Keywords

  • Congestion rents multi-settlement systems
  • Consumer and producer surplus
  • Day-ahead and real-time markets
  • Electricity market performance
  • Financial entities
  • Operational reliability criterion
  • Security assessment
  • Social welfare maximization

ASJC Scopus subject areas

  • Energy Engineering and Power Technology
  • Control and Systems Engineering

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