Price-based adaptive spinning reserve requirements in power system scheduling

In a deregulated electricity market such as the California WEPEX, spinning reserves must be explicitly identified as an ancillary service and priced. Additionally, scheduling coordinators who match suppliers and demands may e ither self-provide spinning reserves, or rely on the Independent System Ope rator (ISO) to provide reserves at the spot price. The deregulated market s tructure makes explicit the implicit softness that has always been recogniz ed in the reserve constraints. additional reserves may have value even when a minimum reserve requirement has been met. In this paper we formulate the spinning reserve requirement (SRR) as a function of the endogenously deter mined marginal values of reserves. The spinning reserve requirement depends , according to a non-increasing response function, on a price/value signal. We present three power system scheduling algorithms in which this price/va lue signal is updated at each iteration of a dual optimization. Game theory is used to interpret the proposed algorithms. Numerical test results are a lso presented. (C) 1998 Elsevier Science Ltd. All rights reserved.