Analysis of interaction between ancillary service markets and energy market using power market simulator

Abstract

In typical open power markets, generating units are allowed to bid their energy and capacity to energy and ancillary service markets at the same time. The system operator uses an optimization procedure to determine the accepted bids of units and clearing prices of different markets. Since the same generating unit can participate different markets simultaneously, different markets may impact one another. Study of how different markets interact with each other can provide insights to the market operation and behavior, which may be useful for market participants to make sound bidding decisions. However, this procedure can be complex and appropriate simulation tools would be helpful. In this paper, a power market simulator is utilized to study the interaction between ancillary service and energy markets. Ancillary service markets for regulation down reserve, regulation up reserve, spinning reserve, non-spinning reserve and replacement reserve are considered. Case studies using a model built on a power market located in the U.S. East Interconnect are reported.