Operational Risk Evaluation in Competitive Electricity Market Scheduling

Electric power systems are typically operated at least cost subject to technical and reliability constraints. This paper presents a probabilistic approach for risk evaluation in competitive electricity market scheduling. A competitive structure is proposed which includes a purchasing agency with centrally optimized scheduling (MaxISO structure). Spinning and non-spinning reserves are considered in the proposed approach. The value of unit commitment risk is deduced from the generation model. The required generation model is constructed using the outage replacement rate (ORR) of units. The load forecast uncertainty is included in operational risk evaluation. This is due to the increased uncertainty associated with competition. The concept of area risk curves is used to allow the inclusion of non-spinning reserve. The performance of the proposed approach is verified through simulation studies using a test system.