Market-Based Operation of Interconnectors in a Multi-Area Power Network With Meshed Topology

The significant reduction in the system inertial response due to the increasing penetration of converter-interfaced renewable generators may reduce the ability to safely control post-fault frequency dynamics. Larger volumes of flexible ancillary services may be required to ensure system stability. Part of these additional regulation resources may be procured from other power systems by means of existing and new interconnectors. The paper investigates this framework by assessing the techno-economic benefits of interconnectors that operate in a multi-area power network and whose capacity can be utilized for simultaneous exchange of power and fast-frequency services. Two different operational approaches are considered: a traditional centralized allocation of the interconnectors' capacity and an alternative market-based paradigm where price-making interconnectors act as profit-seeking agents that aim to maximize their collected congestion surplus. The paper provides new fundamental results on the benefits of a multi-purpose allocation of the interconnectors' capacity, directly comparing the operational choices and the interactions between centrally-operated and self-interested interconnectors, and quantifying the impact of the latter on the overall social welfare of the system. This novel methodology is applied to a model of an interconnected Great Britain-France-Ireland multi-area system, quantifying the potential benefits of multi-service interconnectors and assessing the impact of their self-interested scheduling within a realistic framework that considers power systems of different sizes and characteristics.