Multi-stage equilibrium in electricity pool with flexible ramp market

Abstract

Traditionally, conventional units were able to handle the load variations in the power system. Ever swelling installation of wind farms renders power system to be influenced by the lack of enough ramping capability. To overcome this shortcoming, it is necessary to incorporate ramp requirement within the market in an explicit manner. The flexible ramp constraints have inter-temporal nature and necessitate application of a dynamic game model to specify the equilibrium. Uncertainties imposed by wind farms along with consideration of two-floor markets, day-ahead and real-time market, can be tackled by a multi-stage stochastic programming. To do so, a multi-stage stochastic bi-level equilibrium is addressed here where, besides day-ahead and real-time market, flexible ramp market is included. Modeling process comes across through explicit techniques in which Mathematical Program with Equilibrium Constraints (MPEC) and Equilibrium Program with Equilibrium Constraints (EPEC) carry the heavy burden of the modeling operation. The performance of the proposed model is examined on a two-player environment system. The results show that incorporation of flexible ramp market into the traditional power markets affects equilibrium and guarantees the feasibility of the problem in the term of ramping capability.