Stochastic Interchange Scheduling in the Real-Time Electricity Market

TL;DR

This paper introduces a novel stochastic interchange scheduling method for multi-area electricity markets that optimizes expected operating costs using forecasted locational marginal prices, eliminating the need for iterative negotiations.

Contribution

It proposes a new two-stage stochastic optimization approach that maximizes expected social welfare for interchange scheduling, avoiding complex iterative procedures.

Findings

Effective scheduling without iterative communication

Reduces expected operating costs in stochastic environments

Leverages LMP forecasts for optimal decisions

Abstract

The problem of multi-area interchange scheduling in the presence of stochastic generation and load is considered. A new interchange scheduling technique based on a two-stage stochastic minimization of overall expected operating cost is proposed. Because directly solving the stochastic optimization is intractable, an equivalent problem that maximizes the expected social welfare is formulated. The proposed technique leverages the operator's capability of forecasting locational marginal prices (LMPs) and obtains the optimal interchange schedule without iterations among operators.