Please use this identifier to cite or link to this item: http://hdl.handle.net/10397/18668
Title: Pricing and procurement of operating reserves in competitive pool-based electricity markets
Authors: Yu, CW
Zhao, XS
Wen, FS
Chung, CY
Chung, TS
Huang, MX
Keywords: Ancillary services
Deregulated power market
Operating reserve
Optimum pricing and procurement
Issue Date: 2005
Publisher: Elsevier
Source: Electric power systems research, 2005, v. 73, no. 1, p. 37-43 How to cite?
Journal: Electric power systems research 
Abstract: The changing structure of the electricity supply industry is bringing procuring and pricing of operating reserve into a new focus. The efficient rationing and pricing of operating reserve is an important issue to be dealt with in competitive electricity markets, as it is needed to maintain system reliability when economically efficient transactions are accommodated in the power system. This paper sets forth a comprehensive theory for procurement and pricing scheme for operating reserve. The theory is based on capacity-reliability correlation analysis and is compatible with electricity auction in the context of electricity supply industry deregulation. Considering various elements including available capacity of generator, outage cost, reliability index and so on, the capacity-reliability correlation analysis which reflects the equilibrium condition for procurement of operating reserve capacity is built based on an optimal pricing model. Value of capacity and energy of reserve can then be derived. Using the correlation analysis, a novel mechanism for monitoring the existence of participant's gaming behavior is also developed. The optimal pricing of the reserve capacity in a deregulated market is proposed to achieve social welfare-maximization. Simple case studies are carried out to demonstrate the efficiency and the validity of the proposed scheme.
URI: http://hdl.handle.net/10397/18668
ISSN: 0378-7796
EISSN: 1873-2046
DOI: 10.1016/j.epsr.2004.06.004
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