Electricity market and operations reliability

As the main power system interconnections in North America have undergone changes toward the market economic structure, ensuring grid reliability has become the responsible of the Regional Transmission Organizations (RTOs). In market economy, operations planning works side-by-side with the market to achieve grid operation reliability. Operations planning identifies reliability requirements to be enforced in the market clearing processes. It also provides outside-the-market mitigation strategies for system conditions that are not effectively addressed by the market clearing process. The RTO must maintain a correct balance to avoid both the “under planning” and the “over planning”. The former jeopardizes the grid reliability. And the latter results in poor market economic efficiency. This paper reviews the Midwest ISO market and operations planning business processes. It also discusses sensitive areas of operation where the correct balance is harder to achieve, but its success would significantly impact the market economics, in terms of both operation cost and pricing.