A Nodal Capacity Market to Assure Resource Adequacy

In power systems with no transmission constraints a simple relationship links resource adequacy criteria LOLP or LOLE with VOLL. This relationship justifies the choice of the LOLP/LOLE criteria as a guiding principle for making optimal investments in generation expansion. In constrained power system...

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Bibliographic Details
Published in2012 45th Hawaii International Conference on System Sciences pp. 1876 - 1887
Main Authors Rudkevich, A. M., Lazebnik, A. I., Sorokin, I. S.
Format Conference Proceeding
LanguageEnglish
Published IEEE 01.01.2012
Subjects
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Capacity Market
Economics
Equations
Power system reliability
Resource Adequacy
Stochastic Optimization
Vectors
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ISBN9781457719257
1457719258
ISSN1530-1605
1530-1605
DOI10.1109/HICSS.2012.75

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Summary:In power systems with no transmission constraints a simple relationship links resource adequacy criteria LOLP or LOLE with VOLL. This relationship justifies the choice of the LOLP/LOLE criteria as a guiding principle for making optimal investments in generation expansion. In constrained power systems LOLP/LOLE criteria do not lead to optimal investment decisions. Locational resource adequacy requirements presently used in known capacity markets are not economically justified and do not lead to optimal investment decisions. We formulate the nodal capacity expansion problem in the form of a stochastic optimization based auction which solves for the optimal resource subject to resource adequacy criteria in the form of value of lost load. We explore the properties of this formulation, define locational capacity prices and a consistent system of load payments and generator compensations for reliability received and provided. Provided examples illustrate the importance of using the full network consideration in resource adequacy assessments.
ISBN:9781457719257
1457719258
ISSN:1530-1605
1530-1605
DOI:10.1109/HICSS.2012.75