Market design for system security in low carbon electricity grids

Abstract

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Power system stability in the transition to a low carbon grid: A techno‐economic perspective on challenges and opportunities

“…New important techno‐economic challenges that are emerging are associated with inherent difficulties in dealing with complex physical system requirements—and then market products—in low‐carbon grids with increasing shares of PECs, but still with a large presence of synchronous machines. These difficulties in dealing with the “new physics” of low‐carbon grids justify the so‐called “bottom‐up” approach “from physics to economics” to define new market and regulatory requirements, services and products (Billimoria et al, 2020; Mancarella & Billimoria, 2021). Examples of such issues are: difficulty in defining physical features of low‐carbon grids (e.g., “system strength” is related to network impedance, voltage/reactive power control, synchronizing torque, inertia, and short‐circuit current—it is not straightforward to even “define” in a clear but comprehensive manner); inseparability of certain services (e.g., a synchronous generator provides fault current, but also inevitably inertia, thus affecting other markets/products); integrality constraints (e.g., an SC can only provide none, or all, of its inertia and fault‐current capacity when off or on, respectively, thus leading to “binary” or “integer” service provision that is not easy to incorporate within market solution algorithms); non‐intuitive stability characteristics of complex hybrid (continuous‐discrete) dynamical systems (e.g., synchronous and PEC‐based technologies); and difficulty in defining whether all security services are actually “public goods,” as historically thought, or whether some of them may have different economic properties (e.g., provision and access to some services may become increasingly “contentious” due to system congestion).…”

“…Furthermore, following sudden loss of a significant load (e.g., due to a load rejection event), solar‐PV units could experience over‐voltages, leading to their subsequent disconnection due to over‐voltage protection operation (Key et al, 2020). Therefore, an anticipated increase in the volume of small‐scale PEC‐interfaced DER strongly indicates that additional control measures should be introduced, either through new grid‐code requirements and/or market mechanisms (Billimoria et al, 2020). These requirements can be determined via integrated system planning approaches, similar to the model presented in Section 4.3.…”

“…An example of an integrated system planning framework that could be adopted to systematically evaluate the optimal technology mix, while also potentially ensuring system security, is shown in Figure 8. However, of course, other similar, hybrid approaches could be considered, also depending on the specific market design and regulatory setup (see, e.g., Billimoria et al, 2020).…”

“…Some of these markets may operate in time intervals as short as 5–15 minutes, trading energy as the primary commodity. Other market products may also be defined to provide various security services to maintain grid stability and system reliability (Billimoria et al, 2020). These markets are commonly known as ancillary services, or system services, markets (e.g., for frequency control, it is possible to mention frequency control ancillary services [FCASs] market in Australia [AEMO, 2015a], flexible ramping product [FRP] in California [California ISO, 2016], DS3 system services in Ireland [EirGrid, 2017], fast frequency response [FFR] in ERCOT [ERCOT, 2016], and enhanced frequency response [EFR] in GB [National Grid, 2016]).…”

“…10 10 For a comprehensive overview of the new technical requirements, and regulatory and market options to ensure stability and security in low‐carbon grids, the reader is referred to Billimoria et al (2020). …”