trading wind generation in short-term energy markets

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Discussion Deadline: September 2002 A Software Architecture for Power Market Supporting System and Reengineering of Legacy EMS Zhao, Q.; Huang, G.M.; Wu, X.; Luo, X. Author Affiliation: Texas Instruments; Texas A & M University; Fujitsu Network Communications; ISO NE, Inc. Abstract: In this paper, a heterogeneous software architectural style is designed for the web-based software system to support and electronic commerce solution for deregulated power markets, which is flexible for various power market structures and extendible for the fast-changing industry environment. A wrapping technique is designed to transfer the legacy energy management system (EMS) modules into reusable components for the power market supporting software system. Keywords: Software architectural style, electronic commerce, en- ergy management system, power market. Preprint Order Number: PE-727PRS (04-2002) Discussion Deadline: September 2002 Hedging With Futures Contracts in a Deregulated Electricity Industry Tanlapco, E.; Lawarree, J.; Liu, C.C. Author Affiliation: University of Washington Abstract: This paper is a statistical study of direct and cross hedg- ing strategies using futures contracts in an electricity market. A com- parison of the strategies is based on the standard deviation or risk of the values of the hedging positions. Results indicate that the use of electric- ity futures contracts is superior to using other related futures contracts such as crude oil. Keywords: Electricity deregulation, risk management. Preprint Order Number: PE-041PRS (04-2002) Discussion Deadline: September 2002 Multiple Criteria Decision-Making and Risk Analysis as Risk Management Tools for Power Systems Planning Linares, P Author Affiliation: Universidad Pontificia Comillas Abstract: Uncertainties in power systems planning are gaining importance due to the liberalization of the electricity industry and the increasing concem for the environmental impact of electricity genera- tion. This paper presents an electricity planning model that deals with uncertainty and its associated risk at two levels: at the first level, by minimizing environmental risk through a multiple-criteria model; at the second level, by perfonning a risk analysis consistent with the mul- tiple criteria model used before and which applies classical decision rules for selecting the best planning strategy under uncertainty. Results show that the incorporation of additional criteria produce much more flexible and efficient strategies, which greatly reduce environmental risk at a little cost increment while the risk analysis process selects flex- ible and robust strategies for the scenarios analyzed. Keywords: Power system planning, decision-making, risk analysis, uncertainty. Preprint Order Number: PE-214PRS (04-2002) Discussion Deadline: September 2002 Trading Wind Generation in Short-Term Energy Markets Bathurst, G.N.; Weatherill, J.; Strbac, G. Author Affiliation: UMIST, Manchester, U.K. Abstract: Even with state-of-the-art forecasting methods, the short-term generation of wind farms cannot be predicted with a high degree of accuracy. In a market situation, these forecasting errors lead to commercial risk through imbalance costs when advance contracting. This situation is one that needs to be addressed due to the steady in- crease in the amount of grid-connected wind generation, combined with the rise of deregulated, market-orientated electricity systems. In the presence of imbalance prices and uncertain generation, a method is required to determine the optimum level of contract energy to be sold on the advance markets. Such a method is presented here using Markov probabilities for a wind farm and demonstrates substantial reductions in the imbalance costs. The effect of market closure delays and fore- casting window lengths are also shown. Keywords: Wind energy, risk analysis, Markov processes, NETA, energy markets. Preprint Order Number: PE-285PRS (04-2002) Discussion Deadline: September 2002 An Efficient Algorithm for Assessing Reliability Indices of General Distribution Systems Wang, Z.; Shokooh, F.; Qiu, J. Author Affiliation: Operation Technology, Inc. Abstract: This paper presents a practical reliability assessment al- gorithm for distribution systems of general network configurations. This algorithm is an extension of the analytical simulation approach for radial distribution systems. In the proposed algorithm, the meshed net- work is first converted to a radial network. All network elements are di- vided into three main classes according to their probability to obtain power supplies from different directions. Accordingly, three different methods are employed to obtain two types of reliability topology zones for the elements. The algorithm is efficient for large-scale ra- dial/meshed distribution systems and can accommodate the effects of fault isolation and load restoration. The validity and effectiveness of the proposed algorithm is demonstrated by applying a computer program which was developed based on the proposed algorithm to a number of test systems and hundreds of real distribution networks. Keywords: Reliability analysis, distribution systems, network analysis. Preprint Order Number: PE-391PRS (04-2002) Discussion Deadline: September 2002 Dynamic Analysis of Generation Control Performance Standards Sasaki, T.; Enomoto, K. Author Affiliation: Kansai Electric Power Co. Abstract: This paper presents an evaluation of the North American Electric Reliability Council's (NERC) new control performance stan- dards, as they might be applied to the Westem Japanese 60 Hz system. Dynamic simulation of the systems frequency response, including the effects of primary and secondary frequency control, power plant re- sponse, and load fluctuation characteristic were performed using a load flow program during normal system operation. Parameter sensitivities have been studied for some of the pertinent control parameters influ- encing the generation control performance, including power plant and AGC response parameters, and amounts of generation under control for govemor and AGO. Keywords: Power system, generation control, control performance standards, control area. Preprint Order Number: PE-456PRS (04-2002) Discussion Deadline: September 2002 Adaptation in Load Shedding Under Vulnerable Operation Conditions Jung, J.; Liu, C.C.; Tanimoto, S.L.; Vittal, V Author Affiliation: Iowa State University; University of Washing- ton Abstract: The proposed approach to avoiding catastrophic failures in interconnected power systems uses a defeusive system based on IEEE Power Engineering Review, July 2002 54

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Page 1: Trading Wind Generation in Short-Term Energy Markets

Discussion Deadline: September 2002

A Software Architecture for Power Market SupportingSystem and Reengineering of Legacy EMS

Zhao, Q.; Huang, G.M.; Wu, X.; Luo, X.

Author Affiliation: Texas Instruments; Texas A & M University;Fujitsu Network Communications; ISO NE, Inc.

Abstract: In this paper, a heterogeneous software architecturalstyle is designed for the web-based software system to support andelectronic commerce solution for deregulated power markets, which isflexible for various power market structures and extendible for thefast-changing industry environment. A wrapping technique is designedto transfer the legacy energy management system (EMS) modules intoreusable components for the power market supporting software system.

Keywords: Software architectural style, electronic commerce, en-ergy management system, power market.

Preprint Order Number: PE-727PRS (04-2002)Discussion Deadline: September 2002

Hedging With Futures Contracts ina Deregulated Electricity IndustryTanlapco, E.; Lawarree, J.; Liu, C.C.

Author Affiliation: University of WashingtonAbstract: This paper is a statistical study of direct and cross hedg-

ing strategies using futures contracts in an electricity market. A com-parison of the strategies is based on the standard deviation or risk of thevalues of the hedging positions. Results indicate that the use of electric-ity futures contracts is superior to using other related futures contractssuch as crude oil.

Keywords: Electricity deregulation, risk management.Preprint Order Number: PE-041PRS (04-2002)Discussion Deadline: September 2002

Multiple Criteria Decision-Makingand Risk Analysis as Risk ManagementTools for Power Systems PlanningLinares, P

Author Affiliation: Universidad Pontificia ComillasAbstract: Uncertainties in power systems planning are gaining

importance due to the liberalization of the electricity industry and theincreasing concem for the environmental impact of electricity genera-tion. This paper presents an electricity planning model that deals withuncertainty and its associated risk at two levels: at the first level, byminimizing environmental risk through a multiple-criteria model; atthe second level, by perfonning a risk analysis consistent with the mul-tiple criteria model used before and which applies classical decisionrules for selecting the best planning strategy under uncertainty. Resultsshow that the incorporation of additional criteria produce much moreflexible and efficient strategies, which greatly reduce environmentalrisk at a little cost increment while the risk analysis process selects flex-ible and robust strategies for the scenarios analyzed.

Keywords: Power system planning, decision-making, risk analysis,uncertainty.

Preprint Order Number: PE-214PRS (04-2002)Discussion Deadline: September 2002

Trading Wind Generation inShort-Term Energy Markets

Bathurst, G.N.; Weatherill, J.; Strbac, G.

Author Affiliation: UMIST, Manchester, U.K.Abstract: Even with state-of-the-art forecasting methods, the

short-term generation of wind farms cannot be predicted with a highdegree of accuracy. In a market situation, these forecasting errors lead

to commercial risk through imbalance costs when advance contracting.This situation is one that needs to be addressed due to the steady in-crease in the amount of grid-connected wind generation, combinedwith the rise of deregulated, market-orientated electricity systems. Inthe presence of imbalance prices and uncertain generation, a method isrequired to determine the optimum level of contract energy to be soldon the advance markets. Such a method is presented here using Markovprobabilities for a wind farm and demonstrates substantial reductionsin the imbalance costs. The effect of market closure delays and fore-casting window lengths are also shown.

Keywords: Wind energy, risk analysis, Markov processes, NETA,energy markets.

Preprint Order Number: PE-285PRS (04-2002)Discussion Deadline: September 2002

An Efficient Algorithm for Assessing ReliabilityIndices of General Distribution Systems

Wang, Z.; Shokooh, F.; Qiu, J.

Author Affiliation: Operation Technology, Inc.Abstract: This paper presents a practical reliability assessment al-

gorithm for distribution systems of general network configurations.This algorithm is an extension of the analytical simulation approach forradial distribution systems. In the proposed algorithm, the meshed net-work is first converted to a radial network. All network elements are di-vided into three main classes according to their probability to obtainpower supplies from different directions. Accordingly, three differentmethods are employed to obtain two types of reliability topology zonesfor the elements. The algorithm is efficient for large-scale ra-dial/meshed distribution systems and can accommodate the effects offault isolation and load restoration. The validity and effectiveness of theproposed algorithm is demonstrated by applying a computer programwhich was developed based on the proposed algorithm to a number oftest systems and hundreds of real distribution networks.

Keywords: Reliability analysis, distribution systems, networkanalysis.

Preprint Order Number: PE-391PRS (04-2002)Discussion Deadline: September 2002

Dynamic Analysis of GenerationControl Performance Standards

Sasaki, T.; Enomoto, K.

Author Affiliation: Kansai Electric Power Co.Abstract: This paper presents an evaluation of the North American

Electric Reliability Council's (NERC) new control performance stan-dards, as they might be applied to the Westem Japanese 60 Hz system.Dynamic simulation of the systems frequency response, including theeffects of primary and secondary frequency control, power plant re-sponse, and load fluctuation characteristic were performed using a loadflow program during normal system operation. Parameter sensitivitieshave been studied for some of the pertinent control parameters influ-encing the generation control performance, including power plant andAGC response parameters, and amounts of generation under control forgovemor and AGO.

Keywords: Power system, generation control, control performancestandards, control area.

Preprint Order Number: PE-456PRS (04-2002)Discussion Deadline: September 2002

Adaptation in Load Shedding UnderVulnerable Operation Conditions

Jung, J.; Liu, C.C.; Tanimoto, S.L.; Vittal, V

Author Affiliation: Iowa State University; University of Washing-ton

Abstract: The proposed approach to avoiding catastrophic failuresin interconnected power systems uses a defeusive system based on

IEEE Power Engineering Review, July 200254