Investigating Reserve Dimensioning Approaches for Multi-Area Reserve Capacity Markets: A Nordic Case Study

Abstract

<p>This paper investigates Frequency Restoration Reserve (FRR) allocation and dimensioning approaches in a multi-area context, focusing on the Nordic Load-Frequency Control (LFC) block. We aim to (i) provide a framework for multi-area FRR dimensioning applicable to dynamic as well as static approaches, and (ii) enhance the understanding of how the available information impacts the need for FRR capacity. We model the optimal FRR dimensioning and allocation in the entire Nordic LFC block, considering sharing of FRR between areas. We describe how FRR can be dimensioned dynamically, analyse the benefits of moving from a static to a dynamic approach, and investigate the impact of when FRR is dimensioned in terms of the available information. The proposed FRR dimensioning procedure includes a new application of a methodology to simulate imbalance scenarios and a novel reformulation of a chance-constrained optimization problem. Case study results show that dynamic dimensioning of FRR leads to a reduction in total reserve needs compared to the static approach and hence lower balancing costs, especially if FRR is dimensioned after the clearing of the day-ahead market. </p>