Market Pricing and Settlements Analysis Considering Capacity Sharing and Reserve Substitutions of Operating Reserve Products

Davoudi, Hamid; Wang, Fengyu; Shi, Di; Xavier, Alinson; Qiu, Feng; Chen, Yonghong

doi:10.1109/NAPS58826.2023.10318812

Market Pricing and Settlements Analysis Considering Capacity Sharing and Reserve Substitutions of Operating Reserve Products

Conference · Tue Nov 21 04:00:00 EST 2023

DOI:https://doi.org/10.1109/NAPS58826.2023.10318812· OSTI ID:2281822

Davoudi, Hamid; Wang, Fengyu; Shi, Di; Xavier, Alinson; Qiu, Feng; Chen, Yonghong

Electricity market pricing and settlement are the key signals for real-time dispatch and long-term investment decisions. Regional transmission operators (RTOs) in the U.S. adopt uniform pricing scheme, which is based on the marginal costs of supplying an incremental MW of electric services. The marginal cost of an electric service is highly dependent on the constraints in the pricing models of RTOs. A slight difference in constraint modeling of pricing model on energy and ancillary services could result in drastically different market clearing prices (MCPs), cleared reserve quantities, and associated revenue. RTOs in the U.S. have various market designs and assumptions in ancillary services modeling in capacity sharing and reserve substitutes. This paper examines four combination models of capacity sharing and reserve substitutes and analyzes the associated market implications. The numerical results present that 1) cascading reserve requirements have direct impact on reserve pricing schemes 2) both cascading reserve requirements and sharing capacity have significant impact on reserve MCPs and locational marginal prices, and thus result in drastically different reserve revenue, energy revenue, generation cost, and generation profit.

Research Organization:: National Renewable Energy Laboratory (NREL), Golden, CO (United States)

Sponsoring Organization:: USDOE National Renewable Energy Laboratory (NREL)

DOE Contract Number:: AC36-08GO28308

OSTI ID:: 2281822

Report Number(s):: NREL/CP-6A40-88576; MainId:89355; UUID:a7d0c5b2-f4e8-4a0c-8075-1e71122aa213; MainAdminID:71574

Country of Publication:: United States

Language:: English

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Related Subjects

ENERGY PLANNING, POLICY, AND ECONOMY
ancillary services
capacity sharing
market clearing
market settlements
pricing schemes
reserve market
reserve requirements

Market Pricing and Settlements Analysis Considering Capacity Sharing and Reserve Substitutions of Operating Reserve Products

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References (11)

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