Contingency-Constrained Reserve Requirements in Joint Energy and Ancillary Services Auction

This paper presents a security-constrained unit commitment model for energy and ancillary services auction which can be used by an ISO to optimize reserve requirements in electricity markets. The proposed day-ahead algorithm determines reserve requirements by simulating contingencies rather than specifying the requirements as fixed system constraints. To address the computational complexity, the original auction problem is decomposed into a master problem for solving unit commitment and subproblems for considering network security constraints. Numerical examples show that the proposed joint auction model can clear energy and ancillary services bids simultaneously while minimizing the total operating cost and satisfying transmission security constraints.