Essays on intermittent renewable integration in electricity market design
Open Access
- Author:
- Hohl, Cody
- Graduate Program:
- Energy and Mineral Engineering
- Degree:
- Doctor of Philosophy
- Document Type:
- Dissertation
- Date of Defense:
- October 05, 2022
- Committee Members:
- Jeremy Gernand, Program Head/Chair
Mort Webster, Major Field Member
Seth Blumsack, Major Field Member
Chiara Lo Prete, Chair & Dissertation Advisor
Anthony Kwasnica, Outside Unit & Field Member - Keywords:
- Electricity market design
Wind energy
Intraday
Capacity
Energy-only
Experiment
Uplift - Abstract:
- This dissertation explores the impact of intermittent renewable integration in electricity market design. U.S. electricity markets adopt a two-settlement structure with day-ahead and real-time markets. Wind power integration poses a challenge for this market structure because day-ahead wind production forecasts are uncertain and significant rescheduling costs may occur in real time, increasing the need for out-of-market uplift payments. Chapters 2 and 3 investigate whether a multi-settlement structure, where participants can re-trade their forward positions in multiple intraday stages between the day-ahead and real-time markets, reduces uplift payments and system costs, relative to a two-settlement structure. Chapter 2 implements unit commitment and dispatch models that account for intertemporal constraints and are solved on a 36-node test system using historical wind forecasts provided by a Regional Transmission Organization (RTO), as well as synthetic wind forecasts reproducing the observed correlation in the historical data. The performance of market designs are compared across varying levels of wind penetration, where it is found that transitioning from the current two-settlement design to the proposed multi-settlement design may not improve efficiency in power system operations, and RTOs should not use their own forecasts to represent wind power generation for unit commitment and dispatch decisions. Chapter 3 develops laboratory experiments for the two-settlement and multi-settlement structures, where participants play the role of electricity generating companies who sell electricity into the market through a uniform price auction. Unit commitment and dispatch models are used to clear the market and compare the performance of both market designs under varying levels of wind penetration. Results show there is no significant difference in the performance of each market design due to participants not following their wind forecast signals. Chapter 4 examines resource adequacy and revenue sufficiency under two market designs and increasing levels of wind penetration. A capacity market structure provides an incentive for electricity suppliers to invest in new capacity through payments determined in a centralized capacity auction, while an energy-only market structure provides an incentive for electricity suppliers to invest in new capacity through high energy price caps and an operating reserve demand curve (ORDC) price adder mechanism. Equilibrium and mixed integer models are formulated to compare market performance under natural gas price, wind forecast, and demand uncertainty. Results from both market structures are evaluated on a test system comprised of seven nodes, six generators, and ten transmission lines, and show that only modern natural gas generating technologies have incentive to invest in new capacity.