Ancillary service capacity optimization for both electric power suppliers and independent system operator

Ancillary Services (AS) in electric power industry are critical to support the transmission of energy from generators to load demands while maintaining reliable operation of transmission systems in accordance with good utility practice. The ancillary services are procured by the independent system operator (ISO) through a process called the market clearing process which can be modeled by the partial equilibrium from the ends of ISO. There are two capacity optimization problems for both Market participants (MP) and Independent System Operator (ISO). For a market participant, the firm needs to determine the capacity allocation plan for various AS to pursue operating revenue under various uncertainties which can never be accurately estimated. We thereby employ a heuristic named “resource reservation” to suggest two types of bids, the regular and the must-win for a market participant to pursue higher expected revenue and satisfactory performance in terms of revenue under the worst case scenario. Meanwhile, the ISO, needs to determine the total amount of capacity required to guarantee the overall reliability of the transmission system. Our numerical experiment is based on our industrial partner’ operational data and the simulation result suggests that our proposed methods would greatly outperform the deterministic methods in terms of the profitability for a market participant and the ISO’s entire system’s reliability.