Location
Hilton Hawaiian Village, Honolulu, Hawaii
Event Website
https://hicss.hawaii.edu/
Start Date
3-1-2024 12:00 AM
End Date
6-1-2024 12:00 AM
Description
There is a growing need for electricity-system flexibility to maintain real-time balance between energy supply and demand. In this paper, we explore the optimal and incentive-compatible scheduling of generators for this purpose. Specifically, we examine a setting wherein each generator has a different operating cost if it is committed in advance (\eg, day- or hour-ahead) as opposed to being reserved as flexible real-time supply. We model an optimal division of generators between advanced commitment and real-time flexible reserves to minimize the expected cost of serving an uncertain demand. Next, we propose an incentive-compatible remuneration scheme with two key properties. First, the remuneration scheme incentivizes generators to reveal their true costs. Second, the scheme aligns generators' incentives with the market operator's optimal division of generators between advanced commitment and real-time reserve. We use a simple example to illustrate the market operator's decision and the remuneration scheme.
Recommended Citation
Jiang, Yuzhou and Sioshansi, Ramteen, "Optimal and Incentive-Compatible Scheduling of Flexible Generation in an Electricity Market" (2024). Hawaii International Conference on System Sciences 2024 (HICSS-57). 2.
https://aisel.aisnet.org/hicss-57/es/markets/2
Optimal and Incentive-Compatible Scheduling of Flexible Generation in an Electricity Market
Hilton Hawaiian Village, Honolulu, Hawaii
There is a growing need for electricity-system flexibility to maintain real-time balance between energy supply and demand. In this paper, we explore the optimal and incentive-compatible scheduling of generators for this purpose. Specifically, we examine a setting wherein each generator has a different operating cost if it is committed in advance (\eg, day- or hour-ahead) as opposed to being reserved as flexible real-time supply. We model an optimal division of generators between advanced commitment and real-time flexible reserves to minimize the expected cost of serving an uncertain demand. Next, we propose an incentive-compatible remuneration scheme with two key properties. First, the remuneration scheme incentivizes generators to reveal their true costs. Second, the scheme aligns generators' incentives with the market operator's optimal division of generators between advanced commitment and real-time reserve. We use a simple example to illustrate the market operator's decision and the remuneration scheme.
https://aisel.aisnet.org/hicss-57/es/markets/2