Analysis of uncertainty model to incorporate wind penetration in LMP-based energy markets

Abstract

This paper presents a mathematical modeling framework to examine the effect of wind generation on power systems. The work considers penetration of wind generation sources using a stochastic wind speed profile to obtain different scenarios of wind power generation. This is included in an appropriate scenario reduction procedure to classify the wind generation into specific levels based on wind speed and hence reduce the number of probabilistic combinations. A stochastic Locational Marginal Price (LMP) energy market model which incorporates wind power generation scenarios is then proposed. This model includes unit commitment constraints, transmission constraints and wind generation effects to examine the impact of wind generation on price settlement, load dispatch, and reserve requirements. The work further examines how the LMP market is affected by wind farm capacity when wake effect is considered.