Computational Auction Mechanisms for Restructured Power Industry Operation

Front Cover
Gerald B. Sheblé
Springer Science & Business Media, Mar 31, 1999 - Business & Economics - 340 pages
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`Electric energy must be treated as a commodity which can be bought, sold, and traded, taking into account its time- and space-varying values and costs.` Spot Pricing of Electricity, Schweppe et al, 1988.
Computational Auction Mechanisms for Restructured Power Industry Operation outlines the application of auction methods for all aspects of power system operation, primarily for a competitive environment. A complete description of the industry structure as well as the various markets now being formed is given. A thorough introduction to auction basics is included to explain how auctions have grown in other industries. Auction methods are compared to classical techniques for power system analysis, operations, and planning. The traditional applications of economic dispatch, optimal power flow and unit commitment are compared to auction mechanisms. Algorithms for auctions using linearized power flow equations, DC power flow equations, and AC power flow equations are included. The bundling of supportive services, known as ancillary services within the United States, is discussed. Extensions to the basic auction algorithms for inclusion of supportive services as well as algorithms for scheduling and bidding on generation for GENCOs or independent power producers are presented. Algorithms for scheduling and contracting with customers are also presented for energy service companies. An introduction to the various commodity and financial market products includes the use of futures and options for GENCOs. The material is useful for students performing research on the new business environment based on competition. Regulators will find information on initial methods of designing and evaluating market systems, and power exchange and financial analysts will find information on the interdependence of markets and power system-based techniques for risk management. This information compares the new business environment solutions with old business environment solutions.
Computational Auction Mechanisms for Restructured Power Industry Operation provides a first introduction to how electricity will be traded as a commodity in the future.
  

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Contents

INTRODUCTION
1
12 The Shift Toward Deregulation
3
13 Choosing a Competitive Framework
6
14 Preparing for Competition
7
15 Present Overall Problem
8
16 Economic Evolution
10
17 Market Structure
11
19 Computerized Auction Market Structure
15
45 Utilizing InteriorPoint Linear Programming Algorithm as Auction Method
141
46 Market Power
152
47 Supporting Services
160
48 Linear Programming or MixedInteger Programming
164
GENERAL OPERATIONS PLANNING
165
52 Forecasting Demand Markets and Competitors
166
53 Multiple Product Production Frontier
175
54 Electric Energy Industry Modeling
177

110 Role of Markets in Society
17
111 Commodity Contracts
18
112 Auction Market Mechanism
19
114 Commodity Markets
20
115 Commodity and Futures Trading Commissions CFTCs Regulations
21
116 General Exchange Regulations
23
118 Regulation of Pricing of Ancillary Services
26
119 Regulatory Questions
27
120 Engineering Research Problems
28
INDUSTRIAL INFRASTRUCTURE
33
22 Auction Mechanisms
38
23 Evaluation and Comparison of Auction Institutions
51
24 Risk Aversion
54
25 Auctions in Industrial Markets
59
26 Overview of Brokerageauction Systems
70
27 Schweppes Theory of Spot Pricing
75
AUCTION AS LINEAR PROGRAM
77
32 Basic Discrete Auctions
78
33 Degeneracy and Auctions as an Assignment Problem
82
34 More General Models
97
35 Vertically Integrated Industry
100
36 Decentralization in a Nonlinear Model
103
ECONOMIC DISPATCH UNIT COMMITMENT AND OPTIMAL POWER FLOW AS AUCTIONS
107
42 Unit Commitment
114
43 Auction Mechanism with Classical Optimization
131
44 Auction Formulation
135
55 Inventory Contract Management
179
56 Cash Management
181
57 Transaction Portfolio Management
182
58 Risk Management
183
59 Futures Allocations
196
510 Auction Market Dynamic Simulation
199
511 AGC Simulator in PriceBased Operation
207
512 Advanced Concepts
218
GENCO OPERATION
219
62 GENCO Case Studies
221
63 Building Fuzzy Bidding Strategies for the Competitive Generator
240
64 ProfitBased Unit Commitment For The Competitive Environment
246
65 Pricebased UC Results
251
66 Handling Uncertainty in Price and Load Forecasts
255
67 Improving Bidding Strategies Through Intelligent Data Mining
256
68 Bidding Strategies for LR Based Power Auction
259
ESCO OPERATION
273
71 Determining Value in a Deregulated Market
274
72 Costbased Load Management Using LP
282
73 Profitbased Load Management Using LP
289
74 Battery Stored Energy Control for Pricebased Operation
299
Bibliography
311
GLOSSARY
335
INDEX
339
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