Economic Operation of Power Systems with Significant Wind Power Penetration

This dissertation addresses economic operation of power systems with high penetration of wind power. Several studies are presented to address the economic operation of power systems with high penetration of variable wind power. The main concern in such power systems is high variability and unpredictability. Unlike conventional power plants, the output power of a wind farm is not controllable. This brings additional complexity to operation and planning of wind dominant power systems. The key solution in face of wind power uncertainty is to enhance power system flexibility. The enhanced flexibility level should be economic and can be a provided by different tools such as developing new reserve scheduling techniques, demand response, using storage units, facilitating the capacity of cross-border interconnections and so on. These subjects are addressed in this PhD dissertation.

In the first study of this dissertation, a comparative study between uniform and pay-as-bid pricing mechanisms is presented. The average price and the volatility in day-ahead market are compared in two mentioned market clearing approaches. Bidding behavior of generation companies is investigated under two pricing schemes.

Next, cooperative wind-storage operation is studied. Lithium-Ion battery units are chosen as storage units. A novel formulation is proposed to investigate optimal operation of a storage unit considering power system balancing conditions and wind power imbalances.

An optimization framework is presented to increase demand responsiveness. It is argued that the price difference between peak and off-peak hours is not incentivizing enough to encourage load shifting. The key idea is to magnify the price difference between peak and off-peak hours. The result is a new set of prices under which the peak demand is reduced (and thus power system security is enhanced). The optimal charging scheme of Eclectic Vehicles (EVs) in a distribution feeder is then studied considering the proposed pricing scheme.

A formulation is then proposed for optimal reserve scheduling considering the role of reserve provision scenarios from cross-border interconnections. The framework decouples the share of upward and downward primary, secondary, and tertiary reserve services within DK1 (western Danish power system) and neighboring cross border resources (Norway and Germany). Results indicate the economic benefit of reserve provision provided by cross border interconnections.

In another study, a reserve scheduling framework is presented which considers the environmental impact of reserve providers. The impact of considering environmental costs of reserve resources on reserve scheduling is investigated.