Stochastic uncertainty management in electricity markets with high renewable energy penetration

Abstract

Abstract The high penetration of renewable energy sources (RESs) in modern power systems poses two conflicting issues. First one is the reduction in the operation costs resulted from RESs utilization instead of the expensive fossil fuel thermal generating units. However, the RESs are characterized by its uncertain and intermittent behavior that their output power is not dispatchable and not known exactly due to forecast errors. Therefore, reserves are scheduled in the day-ahead market to meet the uncertain supply from RESs which add some costs to the system. The decision maker should be aware of those two conflicting objectives in order to operate the system in the optimal way with minimum operation costs. The problem of the market clearing is formulated as Mixed Integer Linear Programming (MILP) problem using GAMS software. It is considered a two stage stochastic programming with the objective of minimizing the expected total operation energy and reserve costs while satisfying the various operational constraints. The results show the effectiveness of the RESs integration in different cases with the consideration of load shedding, RESs curtailment and transmission congestion. As shown from the results, when the network is congested, the operation costs are increased due to the load shedding and RESs curtailment events occur. Moreover, scheduled reserves are increased to face the uncertainty of RESs. As the RESs power penetration increases with no network congestion, a decreasing trend in the operation cost can be seen. However, this trend is less marked as the uncertainty of RESs generation increases. For the network congested case, the reduction rate of the operation cost is decreased for increasing RESs power penetration levels.