Energy and Ancillary Service Dispatch For The Interim ISO New England Electricity Market
Energy and Ancillary Service Dispatch For The Interim ISO New England Electricity Market
Energy and Ancillary Service Dispatch For The Interim ISO New England Electricity Market
3, AUGUST 2000
Abstract—Since the Federal Energy Regulatory Commission’s competition and deregulation, the various services previously
(FERC) order no. 888 has mandated the establishment of unbun- provided by utilities are being unbundled. Much of the attention
dled electricity markets in the newly deregulated environment, given to some ISO development has focused on the structures
competitive bidding of ancillary services, along with bidding
of energy, becomes increasingly important. In this paper, an of markets for energy and transmission, but the design of mar-
optimization-based framework for solving a multi-commodity kets for ancillary services also requires serious attention and is
electricity market dispatch problem is presented. In compliance getting more critical.
with New England Power Pool (NEPOOL) Market Rules and Pro- Beside ISO-New England Electricity Market, other elec-
cedures, a hybrid dispatch method which combines the sequential tricity markets including New Zealand Electricity Market
dispatch method with the joint dispatch method is proposed to
solve the energy and ancillary dispatch problem for ISO New [3], Australian National Electricity Market [4], WEPEX in
England (ISO-NE). Numerical results on a 6-unit test system and California [5], also allow competitive bidding of energy and
the 324-unit ISO-NE system are included. ancillary services. In these markets, market participants can bid
Index Terms—Automatic generation control, deregulation, elec- in ancillary services, similar in principle to their bids for the
tricity market, energy and reserve dispatch, system operator. energy commodity. The ISO would then dispatch these other
types of bids, along with energy bids, according to applicable
market rules.
I. INTRODUCTION
In the literature, several alternative methods are available for
5) Thirty Minute Operating Reserve (TMOR) regulating capacity and operating within the safe capability of
6) Operable Capability generation and transmission equipment.
7) Installed Capability The scheduling function optimizes the clearing of bids for en-
Of these seven commodities, only the first five which affect ergy, regulating capacity and reserve to meet forecasted hourly
system operation decisions in real-time are addressed in this demand. The scheduling horizon should be variable and se-
paper. All commodities except the first one are considered as lectable by the operator, but not to exceed 48 hours. The length
ancillary services. of each trading period for scheduling is one hour except for the
Energy is the primary commodity of all markets. An energy first period which is the fractional hour remaining in the current
bid is an offer to supply or consume energy (MWh) at a price hour. Only valid bids from available resources will be sched-
($). The energy bid must include the entire capability range of uled. The scheduling function will not perform inter-temporal
the resource, which may be modeled, for each hour, by up to ten optimization except for ramp rate constraints from the previous
blocks of energy with monotonically nondecreasing prices. Zero trading interval.
priced energy block may be used to represent self-scheduled The dispatch function runs automatically every five minutes.
energy. Its bid-clearing results are used to update generation setpoints as
AGC is the regulating capability, under automatic generation input to automatic generation control. In addition, five-minute
control, that responds in an effort to continuously balance the dispatch computes clearing prices for the ancillary service mar-
ISO-NE Control Area’s supply resources with minute to minute kets and calculates Lost Opportunity Costs (LOC) for TMSR
load variations in order to meet the NERC and NPCC Control and AGC markets.
Performance Standards. An AGC bid will be in the form of $ per For the AGC market, the dispatch function ranks eligible
hour to provide AGC service. Regulating capacity is converted AGC bids according to rules reflecting system condition and
to an AGC commodity called a “Reg” which is a weighted av- regulation capacity price, and recommends to the operator
erage of the MW’s of response available in ten minutes and in which generators should be selected for AGC duty. Based on
sixty minutes. the rank from the dispatch function, the operator can make
TMSR is a resource capacity synchronized to the system rational decisions of assigning generators on or off AGC.
which is a) able to immediately begin to supply energy or
reduce demand, b) fully available within ten minutes, and III. OPTIMIZATION FRAMEWORK
c) able to be sustained for a period of at least thirty minutes to The bid-clearing model of the ISO-NE dispatch and sched-
provide first contingency protection. A TMSR bid submitted by uling functions is formulated as a constrained optimization
a market participant is an offer to supply TMSR to the market problem. The objective is to maximize market benefits which
at a price ($ per MW). is equivalent to minimizing the sum of costs to energy and an-
TMNSR is a resource capacity nonsynchronized to the cillary service offers. The objective function of the bid-clearing
system, which is a) able to supply energy or reduce demand, model is described as follows:
b) fully available within ten minutes, and c) able to be sus-
tained for a period of at least thirty minutes to provide first Min MW
contingency protection. A TMNSR bid submitted by a market
participant is an offer to supply TMNSR to the market at a (1)
price ($ per MW). where
TMOR is a resource capacity nonsynchronized to the system, is an index to a market node; A market node defines
which is a) able to supply energy or reduce demand, b) fully the location of a market participant;
available within thirty minutes, and c) able to be sustained for a denotes an index to a bus (reference node) of the net-
period of at least sixty minutes to provide second contingency work;
protection. A TMOR bid submitted by a market participant is denotes an index to a bid type in the bid type set
an offer to supply TMOR to the market at a price ($ per MW). ENOF, LDOF, AGC, TMSR, TMNSR, TMOR ;
ENOF and LDOF denote energy offer and demand
For the interim market, market participants submit hourly
bid, respectively;
bids for the next day for all energy and ancillary services. denotes an index to a trader;
ISO-NE uses this information to dispatch generating resources denotes the study interval within the study period;
based on bid-clearing methodology. The interim market denotes an index to a MW band of a bid.
methodology calls for dispatching and scheduling based on MW denotes the band MW of band
optimized use of daily bids for energy, reserve and regulating of bid type at market node , reference node at time
capacity. Most information necessary for the settlement process by trader . By convention, Band MW is negative for demand
will be derived from market data and dispatch solutions. The bids and positive for all the other bids.
new dispatch and scheduling subsystems require interfaces with
the existing Energy Management System (EMS), a bidding and A. Band (Bid Block) MW Limits
settlement system, and a resource commitment application. Band MW is constrained by band MW limit.
The objective of scheduling and dispatch is to provide optimal For energy and reserve bid blocks (positive):
solutions to the ISO New England market using bids of energy,
regulating capacity and reserve to satisfy the demand for energy
while maintaining the required levels of generating reserve and (2.1)
970 IEEE TRANSACTIONS ON POWER SYSTEMS, VOL. 15, NO. 3, AUGUST 2000
For energy demand bid blocks (negative): of AGC ranges of trader at market node ;
denotes the AGC range selected by the dispatcher for each
generator on AGC.
(2.2)
C. Capacity Constraints
Note that denotes the band price
($/MW) of band of bid type at commercial market node Generators have limited capacities to produce energy and at
, reference node at time by trader . Band price, the same time to provide ancillary services. These are defined
, is calculated with reference to the as capacity constraints as follows:
reference node based on the original band price at market node
and intra-regional loss factor as in (3):
(7)
(3) where denotes the maximum of capacity
available, denotes the capacity assigned
where denotes the raw band to AGC in the upward direction,
price ($/MW) at market node submitted by trader , and
denotes the intra-area loss factor at market MW
node connected to reference node at time .
(8)
B. Ramp Rate Constraints MW
A generating unit has limits on its ability to move from one
level of MW generation to another within a specified time pe- (9)
riod. Generation ramp-rate constraints are modeled as follows: MW
Up-ramp rate constraints are:
(10)
(4.1) are the capacity for TMSR, TMNSR and TMOR, respectively.
For generators on AGC, the following additional constraints
Down-ramp rate constraints are: apply:
(4.2) (9a)
where
(10a)
where denotes the capacity assigned to
AGC in the downward direction, and
if (5)
are the automatic high and low limits
is dispatchable of the selected AGC range for the AGC-capable generator of
Fixed if trader at market node at time , respectively.
is non-dispatchable The following inequalities describe the constraints of ten-
minute reserve coupling and thirty-minute reserve coupling for
denotes the MW energy generation at market node by generators, respectively:
trader at time denotes the dispatch period in minute: 60
for 60-min pre-dispatch scheduling, and 5 for 5-min dispatch;
FixedMW is the fixed basepoint at market node
by trader at time if the generator at time is considered if is online
as fixed. if is offline
(11)
(6)
if is on AGC if is online
if is o AGC if is offline
(12)
denotes the ramp rate limit (MW/min) for the generator
of trader at market node ; and and are the capacity of
denote the automatic response rate and the trader at market node can be claimed in ten minutes
manual response rate, respectively; denotes the number and thirty minutes, respectively, when the trader is offline.
CHEUNG et al.: SERVICE DISPATCH FOR THE INTERIM ISO NEW ENGLAND ELECTRICITY MARKET 971
D. System Requirements
The following equality and inequalities characterize the
system requirements of ISO-NE:
(13)
(14)
(15)
(16)
(17)
(18)
(19)
where
is the system demand which includes
area net interchange and load,
, , and are the requirements for TMSR,
TMNSR, and TMOR, respectively,
, , and are the requirements for upward, down-
ward, and total AGC regulation, respec-
tively.
Fig. 1. Flow chart of ISO-NE hybrid dispatch method.
TABLE I TABLE IV
BIDDING PRICES FOR DIFFERENT MARKETS AND UNITS RESULTS OF LP3 AND AGC REGS
TABLE II
RESULTS OF LP1 (ENERGY SOLUTION ONLY) TABLE V
RESULTS OF LP4 (FINAL MARKET SOLUTION)
TABLE III
RESULTS OF LP2 AND AGC CAPACITY RESERVATION energy has to be backed down to make room for reserve require-
ments. This will make the system to use capacity of a more ex-
pensive unit for energy market, resulting in higher ECP. Table IV
demonstrates the result of this study. As it is seen in the table,
unit D has been backed down 40 MW to provide TMSR. There-
fore, a TMSR LOC is expected for this unit. Unit F has picked
up the extra 40 MW (hence the reason for $50 ECP). Up/Dn
AGC Regs provided by each unit are also shown in the table.
LP4 is the last LP to be solved. In this step, the previous solu-
tions for energy, AGC, and TMSR are frozen and the nonspin-
ning reserve markets are dispatched simultaneously. Results of
(MLL) and the energy bid price of each unit. Note that, in this LP4 are shown in Table V.
LP1 solution, units F and G are constrained at their lower limits TMSR and AGC lost opportunity compensation is accounted
because of their high energy bid price while units A, B and C in the last step of the flow chart, LOC Calculation. Since unit D
are at their upper limits because of their relatively cheap energy. has been backed down to provide TMSR. This creates 40 MW
The next step after LP1 in the flow chart (as shown in Fig. 1), of TMSRLOMW and 10 $/MW of TMSRLOC.
is AGC Bid Evaluation based on which AGC Suggestor works.
At this point, AGC Suggestor chooses units D and G to be on B. ISO-NE System
AGC. It is important to note that the outcomes of AGC Sug- The ISO-NE system consists of 324 generating units in
gestor is solely a recommendation to operators. However, if the 180 market nodes. There are about 2500 constraints and
suggestion were implemented, AGCCP would be $0.047. 3800 variables, a big portion of which is due to sophisticated
Since unit C has actually been selected by the operator to be reserve and ramp models. The simulated data contain a total
on AGC, it is backed down from 400 MW to 300 MW in order to number of 1300 bid blocks. System demand and energy
honor its Automatic High Limit (AHL). In this case, the AGCCP clearing price are 15 500 MW and $20 respectively. Reserve
becomes $0.083 which is higher than that of the AGC Suggestor. requirements of TMSR, TMNSR and TMOR are 800 MW,
Table III shows the energy cleared, Automatic High/Low Limits 450 MW and 400 MW respectively. Total, up and down AGC
(AHL/ALL) and Up/Dn AGC capacity reserved. regulating requirements are 600, 210 and 90 Regs respectively.
After LP2 and AGC Capacity Reservation, LP3 is performed AGC, TMSR, TMNSR and TMOR clearing prices are $0.1, $5,
which clears energy and TMSR markets simultaneously while $0 and $0, respectively.
freezing capacities reserved for AGC. The mutual coupling of If regulating and reserve requirements are kept constant, en-
energy, AGC and TMSR markets are clearly observed. As a re- ergy price will vary with demand. This effect has been shown in
sult, the most expensive energy bid is now cleared at $50 instead Fig. 3. In this figure, series 1 represents the results with TMSR,
of $40 in LP1 and LP2. This is because of the fact that gener- TMNSR and TMOR requirement equal to 800 MW, 450 MW
ating capacity is limited. Therefore, part of capacity cleared for and 400 MW, respectively. For series 2, these requirements are
974 IEEE TRANSACTIONS ON POWER SYSTEMS, VOL. 15, NO. 3, AUGUST 2000
Kwok W. Cheung received his B.S. from National Cheng Kung University,
Fig. 3. Energy price vs. demand for ISO-NE System. Taiwan, in 1986, his M.S. from University of Texas at Arlington, in 1988, and
his Ph.D. from Rensselaer Polytechnic Institute, Troy, NY in 1991, all in elec-
trical engineering. He joined ALSTOM ESCA Corporation in October 1991. His
1200 MW, 550 MW and 500 MW. For both series, the AGC re- current interests include deregulation applications and power system stability.
Dr. Cheung is a registered Professional Engineer of the State of Washington.
quirements are kept constant.
For demands higher than 15 300 MW in series 2, the simu-
lated system has deficiency in capacity and therefore no price is
shown. As it is seen in the figure, when reserve requirements in- Payman Shamsollahi received his B.S. (1989) and M.S. (1990) degrees from
crease, the system goes to deficiency state sooner and the price Tehran University, Iran, and Ph.D. (1997) degree from University of Calgary,
is higher for near saturation demands. Canada, all in electrical engineering. He joined ALSTOM ESCA Corporation
in 1997. His main interests are deregulation applications, artificial intelligence
and power system control.
VI. CONCLUSION
This paper presents the design and implementation of the
energy and ancillary service dispatch for the interim ISO-NE
David Sun joined ALSTOM ESCA Corporation in June 1980. He received his
electricity market. An LP-based bid-clearing framework is B.S. and M.S. from Rensselaer Polytahnic Institute, and his Ph.D. from Univer-
presented and a hybrid dispatch method is proposed to solve sity of Texas at Arlington, in 1974, 1976, and 1980, respectively, all in electrical
the multi-commodity electricity market dispatch problem for engineering. His current focus is on the planning and development of deregula-
tion applications.
ISO-NE. As of this writing, April 1, 1999 is the tentative market
opening day for the interim electricity market in New England.
After a review of the existing market rules, potential areas
of improvements which include location-based transmission James Milligan received his B.S. in electrical engineering from Western New
congestion pricing, demand-side bidding, and multi-settlement England College in 1976. He has been with NEPOOL and ISO-New England
have already been identified for the final market of ISO-NE. As since 1976 and is presently Manager, Engineering for ISO-New England System
Operations and Reliability. In this capacity his primary responsibility is the
the ISO-NE Market System continues to mature, experiences overall coordination of the Energy Management System support for ISO-NE
gained from operation will help facilitating enhancements and Operations functions.
implementations of market rules and operation procedures in
the future.
REFERENCES Mike Potishnak received his B.S. in electrical engineering from Newark Col-
lege of Engineering (NJIT) in 1972. He was an Engineer with Con Edison from
[1] K. Cheung, P. Shamsollahi, S. Asteriadis, J. Milligan, and M. Potishnak, 1972–1976. He received his M.S. in mechanical engineering from Colorado
“Functional requirments of energy and ancillary service dispatch for State University in 1978. From 1978 to 1989, he was a Senior Engineer of Public
the interim ISO New England electricity market,” in Proceedings of Service Company of Colorado. Since 1989, he has been with NEPOOL and is
IEEE/PES 1999 Winter Meeting, New York, NY, USA. currently a Principal Engineer of ISO New England.