Integrating Renewable Energy Sources as Reserve Providers: Modeling, Pricing, and Properties

TL;DR

This paper develops an optimal dispatch model integrating renewable energy sources into reserve markets, accounting for uncertainties and providing a fair pricing scheme that enhances profits for renewables.

Contribution

It introduces a joint energy-reserve procurement model with a novel pricing scheme that balances thermal and renewable resources considering their uncertainties and flexibility.

Findings

Renewable resources can profit more by providing reserves rather than maximizing generation.

The proposed pricing scheme ensures market fairness between thermal and renewable units.

Simulations confirm the effectiveness and desirable properties of the proposed model.

Abstract

In pursuit of carbon neutrality, many countries have adopted renewable portfolio standards to facilitate the integration of renewable energy. However, increasing penetration of renewable energy resources will also pose higher requirements on system flexibility. Allowing renewable themselves to participate in the reserve market could be a viable solution. To this end, this paper proposes an optimal dispatch model for joint energy-reserve procurement that incorporates renewable portfolio standards and RES serve as reserve providers. Potential generator outages and deviations in renewable and load power are modelled through a given number of probability-weighted scenarios. In particular, reserve resources are initially booked in the base case and then activated in non-base scenarios through the re-dispatch process. Marginal pricing is used to derive energy, reserve, and power deviation prices. Next, we develop the associated settlement process and establish several market properties. The proposed pricing scheme establishes equivalence between thermal generators and renewable units by accounting for their uncertainties, including thermal generator outages and renewable power deviations, and their flexibility, namely reserve and re-dispatch. We have shown that for renewable resources, supplying reserve according to the dispatch results compared to generating as much as possible leads to better profits. Simulations validate the effectiveness of the proposed method and properties established.