Two Amendments for Reserve Procurement in Electricity Markets to Enhance Real-Time Compatibility and Boost Flexibility

Higher penetration of volatile resources and rising concerns about flexibility increase the magnitude and importance of mismatch between the day-ahead schedules and real-time operation of power systems. The real-time mismatches are not limited to the energy, but also reserve schedules are imposed to the risk of unavailability in the real-time operation. Considering the undisputed importance of generation reserve, the risk of reserve unavailability is to be taken seriously. The main concerns of this paper include real-time availability of the reserve schedules and flexibility features of the market, which both pave the way for higher exploitation of renewable sources. A more recent market design based on power (PbM) is introduced in the literature, which substantially improves the real-time compliance of the day-ahead schedules. In this paper, it is demonstrated that PbM, in its pure format, is unable to overcome the concerns regarding the reserve unavailability in real-time. Furthermore, two amendments are suggested to strengthen the PbM structure in order to ameliorate reserve schedules of the PbM structure. As the first amendment, the remaining ramp concept is suggested and incorporated, which overcomes the infeasibility problem of the reserve schedules. As the second amendment, the time-based reserve approach is defined, linearized, and incorporated, which can (1) guarantee the real-time compatibility of reserve schedules and (2) distinguish the reserve quality and support flexibility. The results confirm that the application of these amendments enables the market mechanism to yield fully realizable reserve schedules and also enhances market fairness, forming a better economic environment for flexible units.