Co-optimization of Energy and Reserve with Incentives to Wind Generation: Case Study

TL;DR

This paper analyzes the effects of not co-optimizing energy and reserve in high wind penetration scenarios, using models inspired by the Spanish market to evaluate different configurations and market parameters.

Contribution

It introduces a methodology for assessing the impact of co-optimization in energy markets with high wind energy integration, validated through a case study.

Findings

Co-optimization improves reserve and energy market efficiency.

High wind penetration affects reserve requirements and market incentives.

Market parameters significantly influence the benefits of co-optimization.

Abstract

This case study presents an analysis and quantification of the impact of the lack of co-optimization of energy and reserve in the presence of high penetration of wind energy. The methodology is developed in a companion paper, Part I. Two models, with and without co-optimization are confronted. The modeling of reserve and the incentive to renewable as well as the calibration of the model are inspired by the Spanish market. A sensitivity analysis is performed on configurations that differ by generation capacity, ramping capability, and market parameters (available wind, Feed in Premium to wind, generators risk aversion, and reserve requirement). The models and the case study are purely illustrative but the methodology is general.