Energy Markets Impact on the Risk of Cascading Failures in Power Systems

The occurrence of wide-area cascading events suggests that the power system is operating at reduced safety margins. The generation dispatches provided by current energy markets may influence the risk of cascading outages. This paper aims at estimating the risk of cascading outages associated with diverse dispatch solutions by integrating market-based power dispatch models and a cascading failure analysis. Two alternatives of the pool-based market-clearing model are considered: the decentralized self-scheduling dispatch and the centralized dispatch. Cascading failure analysis is performed to estimate the risk of cascading outages stemming from diverse dispatches. Computational experiments are performed on the Swiss transmission network to assess cascading outages for the decentralized self-scheduling and centralized dispatches accounting for diverse load conditions. The results provide insights on how the interplay between the market structures and the physical infrastructure impact the risk of cascading outages and can be a reference to facilitate infrastructure operators and policy makers decision making during transition phases in electricity markets.