Integrating variable distributed generation within short-term electricity markets

A single-period day-ahead stochastic market-clearing mechanism that schedules large and Distributed Generators (DGs) to reliably supply the system demand is proposed. The mechanism considers the stochasticity of both, the system demand and the generation of variable DGs to satisfy a reliability criterion. The reserves provided by large generators, are endogenously determined by the scheduling mechanism. The mechanism allocates in a cost-reflective manner the additional operational costs introduced by variable DGs in such a way that no entry barriers are imposed to them. Aiming to achieve the effective integration of DG within the proposed mechanism, flexibility rights are defined, and a further classification of DGs according to their generation capacity is proposed.