Reliability-Aware Probabilistic Reserve Procurement

TL;DR

This paper introduces a reliability-aware probabilistic reserve procurement method that incorporates the stochastic nature of renewable reserves, enabling more flexible market participation and potentially reducing costs in renewable-heavy power systems.

Contribution

It develops a MILP reformulation for a non-convex market clearing problem, allowing renewable generators to offer reserves with reliability attributes.

Findings

Increases market liquidity by enabling restricted reserve providers to participate.

Potentially lowers procurement costs in systems with high renewable energy shares.

Provides a new approach to incorporate reliability into reserve offers.

Abstract

Current reserve procurement approaches ignore the stochastic nature of reserve asset availability itself and thus limit the type and volume of reserve offers. This paper develops a reliability-aware probabilistic approach that allows renewable generators to offer reserve capacity with reliability attributes. Offers with low reliability are priced at lower levels. The original non-convex market clearing problem is approximated by a MILP reformulation. The proposed probabilistic reserve procurement allows restricted reserve providers to enter the market, thereby increases liquidity and has the potential to lower procurement costs in power systems with high shares of variable renewable energy sources.