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Market Design Innovations for Decarbonized Grid Operations.

Record Type:	Language materials, manuscript : Monograph/item
Title/Author:	Market Design Innovations for Decarbonized Grid Operations./
Author:	Li, Wanning.
Description:	1 online resource (194 pages)
Notes:	Source: Dissertations Abstracts International, Volume: 84-12, Section: A.
Contained By:	Dissertations Abstracts International84-12A.
Subject:	Electrical engineering. -
Online resource:	click for full text (PQDT)
ISBN:	9798379737351

Market Design Innovations for Decarbonized Grid Operations.
Li, Wanning.

Market Design Innovations for Decarbonized Grid Operations. - 1 online resource (194 pages)

Source: Dissertations Abstracts International, Volume: 84-12, Section: A.

Thesis (Ph.D.)--Iowa State University, 2023.

Includes bibliographical references

The U.S. electric power industry is undergoing a remarkable evolution to achieve its decarbonization goal with 100% reliance on low-carbon or zero-carbon power resources. However, the most cost effective carbon-free power resources, wind and solar, are intermittent. The increasing reliance on these Intermittent Power Resources (IPRs) posts the greatest challenge to electric power system operations. Additional flexibility will be required to mitigate the impacts of the variability and uncertainty of IPRs' generation. However, the current U.S. centrally-managed wholesale power market designs are not designed to handle the high penetration of IPRs and not able to fully recognize and properly compensate this flexibility. In addition, since the marginal operating costs of the system will quickly approach zero, today's marginal cost-based market mechanisms are increasingly facing challenges in the provision of price signals for independent power producers to make decisions about the construction, operation and retirement of plants. Therefore, it creates the needs to re-think how electricity market design could provide incentive to flexible resources. The first four core chapters of this dissertation motivate and explain key contributions I have made to the original development and subsequent extension of a proposed new design for grid-supported RTO/ISO-managed wholesale power markets able to operate efficiently and reliably with high penetrations of IPRs and energy storage resources. The novel features of this proposed new design, called the Linked Swing-Contract Market Design, involve changes in product definitions, contract forms, and settlement rules, not in real-time operations; hence, these changes can be gradually implemented within current U.S. RTO/ISO-managed wholesale power markets. The key novel feature of this proposed new design is its dynamic focus on reserve as the basic transacted product, where reserve consists of the contractually guaranteed availability of power-production capabilities for possible RTO/ISO dispatch during future operating periods. Reserve offers take the form of two-part pricing "swing" (flexibility) contracts in firm or option form. These contracts permit dispatchable resources to ensure they receive appropriate full compensation for all of their rendered services, including flexible reserve availability in advance of operating periods for the reduction of volumetric grid risk as well as RTO/ISO-dispatched power deliveries during operating periods to meet real-time customer power demands and grid reliability requirements.My key conceptual contribution to the original development of this proposed new design was the complete analytical formulation of an RTO/ISO-managed contract-clearing optimization for a swing-contract market. A novel feature of this formulation - the representation of a binary unit-availability indicator as the product of a binary contract-clearing indicator (selected by the RTO/ISO) and an availability-offer indicator (automatically extractable from a swing contract) - permits the contract-clearing optimization to be represented as a Mixed-Integer Linear Programming (MILP) problem with a relatively small number of RTO/ISO binary choice variables to which any standard MILP solver can be applied.My two key conceptual contributions to the subsequent development of this proposed new design are as follows. First, I have carefully formulated linkages among day-ahead, hour-ahead, and real-time swing-contract markets to ensure efficient reliable dynamic performance. Second, I have developed a new stochastic MILP formulation for improved handling of uncertainty and variability of net load arising from high penetration of IPRs with partial firming by energy storage.My key practical contribution to the development of this proposed new design has been the development and implementation of computational studies to test the feasibility and performance capabilities of my conceptual contributions. For example, performance studies conducted by means of a modified IEEE 118-bus test system demonstrate that better reliability performance is achieved using my stochastic MILP formulation than my original deterministic MILP formulation.The next two core chapters of this dissertation address related challenges that arise when grid operations are approaching high or even complete 100% decarbonization. A stochastic production cost simulation method is proposed for the evaluation of generating capacity reliability in power systems with penetration of renewable power. Compared with conventional approaches such as planning reserve margin and probabilistic assessment, the proposed new method is able to consider the hourly chronological characterization of a power system's operations, which is significant in the planning process for integrating new resources such as storage, demand-response and renewable power. The method is tested on a modified ISO New England test system for two scenarios: a 45% renewable power penetration scenario and a 100% clean resource scenario. Simulation results demonstrate that the described method can be used to quantify the reliability of a power system under various renewable power penetration levels. If a power system is found to be unreliable due to insufficient capacity, the method can be used to determine how much additional capacity would be needed to ensure system reliability.The final core chapter of this dissertation reports on the development of an open-source 8-zone test system for teaching, training, and research purposes that is based on ISO New England structural attributes and data. The 8-zone test system is then further extended to include wind turbine agents. Wind power penetration effects are studied using a novel agent-based method to model build-outs of investment queues for planned wind turbine installation. Systematic comparisons are performed for stochastic vs deterministic Security-Constrained Unit Commitment (SCUC) optimizations both with and without high wind power penetration.

Electronic reproduction.
Ann Arbor, Mich. :
ProQuest,
2024

Mode of access: World Wide Web

ISBN: 9798379737351Subjects--Topical Terms:

596380
Electrical engineering.
Subjects--Index Terms:

DecarbonizationIndex Terms--Genre/Form:

554714
Electronic books.

Market Design Innovations for Decarbonized Grid Operations.
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In addition, since the marginal operating costs of the system will quickly approach zero, today's marginal cost-based market mechanisms are increasingly facing challenges in the provision of price signals for independent power producers to make decisions about the construction, operation and retirement of plants. Therefore, it creates the needs to re-think how electricity market design could provide incentive to flexible resources. The first four core chapters of this dissertation motivate and explain key contributions I have made to the original development and subsequent extension of a proposed new design for grid-supported RTO/ISO-managed wholesale power markets able to operate efficiently and reliably with high penetrations of IPRs and energy storage resources. The novel features of this proposed new design, called the Linked Swing-Contract Market Design, involve changes in product definitions, contract forms, and settlement rules, not in real-time operations; hence, these changes can be gradually implemented within current U.S. RTO/ISO-managed wholesale power markets. The key novel feature of this proposed new design is its dynamic focus on reserve as the basic transacted product, where reserve consists of the contractually guaranteed availability of power-production capabilities for possible RTO/ISO dispatch during future operating periods. Reserve offers take the form of two-part pricing "swing" (flexibility) contracts in firm or option form. These contracts permit dispatchable resources to ensure they receive appropriate full compensation for all of their rendered services, including flexible reserve availability in advance of operating periods for the reduction of volumetric grid risk as well as RTO/ISO-dispatched power deliveries during operating periods to meet real-time customer power demands and grid reliability requirements.My key conceptual contribution to the original development of this proposed new design was the complete analytical formulation of an RTO/ISO-managed contract-clearing optimization for a swing-contract market. A novel feature of this formulation - the representation of a binary unit-availability indicator as the product of a binary contract-clearing indicator (selected by the RTO/ISO) and an availability-offer indicator (automatically extractable from a swing contract) - permits the contract-clearing optimization to be represented as a Mixed-Integer Linear Programming (MILP) problem with a relatively small number of RTO/ISO binary choice variables to which any standard MILP solver can be applied.My two key conceptual contributions to the subsequent development of this proposed new design are as follows. First, I have carefully formulated linkages among day-ahead, hour-ahead, and real-time swing-contract markets to ensure efficient reliable dynamic performance. Second, I have developed a new stochastic MILP formulation for improved handling of uncertainty and variability of net load arising from high penetration of IPRs with partial firming by energy storage.My key practical contribution to the development of this proposed new design has been the development and implementation of computational studies to test the feasibility and performance capabilities of my conceptual contributions. For example, performance studies conducted by means of a modified IEEE 118-bus test system demonstrate that better reliability performance is achieved using my stochastic MILP formulation than my original deterministic MILP formulation.The next two core chapters of this dissertation address related challenges that arise when grid operations are approaching high or even complete 100% decarbonization. A stochastic production cost simulation method is proposed for the evaluation of generating capacity reliability in power systems with penetration of renewable power. Compared with conventional approaches such as planning reserve margin and probabilistic assessment, the proposed new method is able to consider the hourly chronological characterization of a power system's operations, which is significant in the planning process for integrating new resources such as storage, demand-response and renewable power. The method is tested on a modified ISO New England test system for two scenarios: a 45% renewable power penetration scenario and a 100% clean resource scenario. Simulation results demonstrate that the described method can be used to quantify the reliability of a power system under various renewable power penetration levels. If a power system is found to be unreliable due to insufficient capacity, the method can be used to determine how much additional capacity would be needed to ensure system reliability.The final core chapter of this dissertation reports on the development of an open-source 8-zone test system for teaching, training, and research purposes that is based on ISO New England structural attributes and data. The 8-zone test system is then further extended to include wind turbine agents. Wind power penetration effects are studied using a novel agent-based method to model build-outs of investment queues for planned wind turbine installation. Systematic comparisons are performed for stochastic vs deterministic Security-Constrained Unit Commitment (SCUC) optimizations both with and without high wind power penetration.
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