Investigation of power‐based day‐ahead electricity market in terms of inducing fake ramp demand, assuring real‐time compatibility, support for flexibility, and providing some solutions

Abstract

The conventional design of electricity markets is based on energy (energy‐based model or EbM). EbM includes some formerly assumed minor flaws that lead to a mismatch between the day‐ahead schedules and real‐time operation. Since these flaws are within the EbM's nature, even without any kind of forecast error, the EbM generation schedule may be unrealizable in real‐time operation. An alternative design based on power (power‐based model or PbM) has been introduced in the previous studies for better real‐time compatibility. Some uninvestigated aspects of this new model are addressed in this paper to shed more light on its pros and cons: (a) Formation of fake demand for extra ramp is likely in PbM. This phenomenon, which is overlooked in previous studies, can endanger system integrity and market performance. This weakness is explained here, and a solution is proposed. (b) Increasing time granularity is known effective for reflecting real‐time condition in the day‐ahead market. We doubled the time resolution of EbM and compared its schedules with PbM's schedules from the viewpoint of real‐time compatibility. (c) Flexibility is a serious issue in the power system. As a new design for market, knowing PbM's impact on this matter is crucial, which is missing in the literature. To fill the gap, PbM's impact on the economic position of flexible units is analyzed here. This paper has a practical perspective, and the input data of the test system are based on the Iranian power grid. The input parameters are scaled down to fit the IEEE 24‐Bus test system.

An equilibrium‐based model to investigate market performance of power‐based electricity market

“…As is reported in some previous studies, EbM's generation schedules are exposed to potential infeasibility in the real‐time operation [3–5]. In such cases, mismatches between the day‐ahead schedules and real‐time operation are inevitable.…”

“…However, this prominent advantage would not directly suggest PbM as a better structure for the electricity market. The computational burden is an important matter, and from this point of view the EbM structure outperforms PbM and for a more detailed comparison the interested reviewers are encouraged to refer to [4]. Certainly, there are other aspects to investigate and the reflection of the change in the market structure on the players’ behaviours is one of them.…”

“…These studies confirm that the staircase load model and, consequently, staircase generation schedules are the roots of the EbM's weakness. They found that in spite of including the ramping constraint of the generating units in the EbM formulation, the resulted schedules might still violate this constraint in the real-time operation [4,8].…”

“…Technical shortcomings of EbM as well as a tight formulation of PbM structure are presented in [6] and [8]. A weakness of the PbM structure related to the unreal ramp in its load profile is presented in [4] and flexibility-supporting features of PbM and EbM are compared. In [9] the feasibility of the reserve schedules in EbM and PbM is analyzed and some amendments are suggested.…”