Probabilistic evaluations on marginal price and capacity adequacy of power systems with price-elastic demand

Abstract

An increasing deployment of smart grid technologies and demand response programs has enabled demands to be more elastic in response to electricity prices, actively contributing to power system operation. However, demand-price elasticity could potentially impact accuracy of electricity price forecasting and generation capacity adequacy evaluation, which have not been thoroughly explored in literature. To this end, a probabilistic model is developed to evaluate marginal electricity price and capacity adequacy of power systems with elastic demand, while considering uncertainties of both demand and supply sides (e.g., random outages of generating units with multi-bidding-segments as well as variability of renewable energy outputs). Specifically, based on the concept of marginal bidding segment, the probability of a bidding segment being marginal is computed via the probabilistic production simulation approach. Accordingly, the discrete probability distribution of marginal electricity price can be obtained, which is further used to calculate mean and variance of marginal electricity price with elastic demand. Moreover, considering the interaction between elastic demands and uncertain electricity prices, the loss-of-load probability and the expected unserved energy are further estimated. Numerical studies are presented to validate effectiveness of the proposed method.