Resource adequacy: economic and engineering challenges and proposed solutions

Jian, Yang

doi:10.1109/mpae.2006.1597997

Cited by 3 publications

References 6 publications

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Financing Long-Term Generation Capacity in a Reference Price Oriented Capacity Market

Sun

Hou

2010

2010 43rd Hawaii International Conference on System Sciences

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Many power markets around the world have been facing inadequacy with generation capacity investment to meet the growing demand. Among various frameworks directed towards this problem, capacity markets have emerged in major eastern US power markets. In this paper, a prototype capacity market is discussed which is consistent with the trend of convergence of market design. Based on this, the critical role of the reference capacity price is brought up, followed by a detailed explanation of its economic rationale and concerns. Noted with the necessity of a systematic pricing scheme to determine the value of the reference capacity price, a pricing model based on the general Black-Scholes contingent claim framework is proposed. In this model, the capacity value is treated as a path-dependent derivative with electricity prices and natural gas prices as underlyings. Numerical study is conducted to prove model validity with a lattice approach adopted.

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Financing Long-Term Generation Capacity in a Reference Price Oriented Capacity Market

Sun

Hou

2010

2010 43rd Hawaii International Conference on System Sciences

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Three Approaches of Generation Price Regulation: Cost-Plus, Contracts and Marginal Cost. Application to Venezuelan Case

Montoya¹,

Morales²

2006

2006 IEEE/PES Transmission &Amp; Distribution Conference and Exposition: Latin America

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At world-wide level, regulation of generation prices has diverse schemes, based on the physical and economic characteristics of the electrical system. This paper describes three main regulation approaches: Cost-Plus, Contracts and Marginal cost. In the Cost-Plus approach, the regulating organ determines the generation price with the costs incurred by the utility, and the profit allowed. In the contract approach, prices are determined between the generator and the client. The prices in this approach are the result of the negotiation, but it will reflect the opportunity cost in the electrical system. In the marginal cost approach, prices are determined by the additional unit cost for the electrical system. Marginal cost is determined in the generation unit dispatch, using the shadows prices of the optimization process. The paper shows a discussion on the advantages and disadvantages of the approaches; based on the prices volatileness, the capacity to transmit economical signals and the simplicity of the methodology. Finally, the paper shows the results of the application of the three approaches in the Venezuelan.

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Probabilistic LMP Forecasting Considering Load Uncertainty

2009

IEEE Trans. Power Syst.

131

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In power market studies, the forecast of locational marginal price (LMP) relies on the load forecasting results from the viewpoint of planning. It is well known that short-term load forecasting results always carry certain degree of errors mainly due to the random nature of the load. At the same time, LMP step changes occur at critical load levels (CLLs). Therefore, it is interesting to investigate the impact of load forecasting uncertainty on LMP. With the assumption of a certain probability distribution of the actual load, this paper proposes the concept of probabilistic LMP and formulates the probability mass function of this random variable. The expected value of probabilistic LMP is then derived, as well as the lower and upper bound of its sensitivity. In addition, two useful curves, alignment probability of deterministic LMP versus forecasted load and expected value of probabilistic LMP versus forecasted load, are presented. The first curve is designed to identify the probability that the forecasted price in a deterministic LMP matches the actual price at the forecasted load level. The second curve is demonstrated to be smooth and therefore eliminates the step changes in deterministic LMP forecasting. This helps planners avoid the possible sharp changes during decision-making process. The proposed concept and method are illustrated with a modified PJM five-bus system and the IEEE 118-bus system. Index Terms-Critical load level, energy markets, load forecasting, locational marginal pricing (LMP), normal distribution, optimal power flow (OPF), power markets, probabilistic LMP forecasting, uncertainty.

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Resource adequacy: economic and engineering challenges and proposed solutions

Cited by 3 publications

References 6 publications

Financing Long-Term Generation Capacity in a Reference Price Oriented Capacity Market

Financing Long-Term Generation Capacity in a Reference Price Oriented Capacity Market

Three Approaches of Generation Price Regulation: Cost-Plus, Contracts and Marginal Cost. Application to Venezuelan Case

Probabilistic LMP Forecasting Considering Load Uncertainty

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