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3Rs for Power And Demand

Dynamic monitoring and decision systems maximize energy resources.

Fortnightly Magazine - December 2009

wind power producers the same way as all other power producers. The burden of predicting their output would be left to producers. They also would have the choice of bidding as a portfolio with power producers or with responsive demand to better manage correlated inter-temporal risks. They would bid the same way as fully dispatchable power plants bid now. However, their bids, once cleared, would be binding,the same as for other more conventional resources. Seen by the system operator, they would be fully dispatchable except for very fast relatively small fluctuations. 3 This is technologically feasible.

In addition, the 3Rs design would treat consumers the same way as any other market participants. They would have to define their demand characteristics and would be obliged to meet them. The end users interested in responding to the system conditions would bid their demand functions after internalizing their inter-temporal constraints and willingness to risk not being served. These bids will be binding, once cleared. The demand-side providers also would quickly find out that bidding as a portfolio with other power producers or users might be highly beneficial for them. 4

The design of the 3Rs for the system operators would require them to collect the self-committing bids from the resources participating, clear the bids without worrying about the dynamic inter-temporal constraints, and make the prices and quantities cleared publicly available. The ISOs would have to design the 3Rs for their ancillary service markets to account for deviations of power committed from the actual outputs. There should be two major new functions for the system operators to perform: 1) manage mid- and long-term self-committed resources reliably within their own area, and, as a part of this process, begin to provide coordinated mid-and long-term cleared prices; 5 and 2) become an integral part of much larger regional and inter-regional coordinated and reliable clearing of available resources. Notably, today’s SCADA has no on-line coordinating information exchange across the control areas or regions; this is known as “the seams problem.” In the next generation, SCADA should have this coordinating layer based on the minimal coordination of binding information exchange. This wouldn’t require any change of present ownerships, just carefully engineered 3Rs for coordinated information exchange in support of physical, financial and environmental risk management at value (see Reference 6) .

>50 Percent Wind

Recent work (see Reference 2) has shown that it’s possible to have a rather straightforward self-commitment by power producers and responsive demand, which when cleared using today’s security-constrained economic dispatch (SCED), enables a large integration of wind capacity without violating transmission constraints. In essence, the 3Rs would require each power producer to look ahead over the time horizon relevant for its own technology and optimize its own objectives.

Based on this optimization, each power producer would create and submit supply functions that are no longer inter-temporally constrained. Similarly, responsive demand would optimize its own objectives and offer demand functions that are no longer inter-temporally constrained. The system operator then would run its dispatch every hour, every 15 minutes, or even every five minutes, and selects the