Bidding Structure Research Articles

An Incentive-Compatible Frequency Regulation Market for Flexible Resources in Microgrid

Frequency regulation services can be provided by emerging flexible resources such as electric vehicles and energy storage which can rapidly adjust the output in response to regulation signals, as long as there is an effective market to provide proper incentives. However, current regulation markets were designed for conventional thermal generating units, and it is difficult for the mileage-based bidding structure to express the cost characteristics of flexible resources. Therefore, the current mechanisms are not conducive to encouraging the participation of flexible resources in providing frequency regulation services. This paper proposes an incentive-compatible frequency regulation market for flexible resources, whose revisions to the existing mechanism include the bidding structure, clearing rules, and settlement rules that adapt to the characteristics of new resources. Compared with the current mechanism, the proposed mechanism can reduce the costs of deploying regulation and more reasonably allocate the revenues for regulation services. The case studies verify the effectiveness of the proposed mechanism.

A market mechanism for truthful bidding with energy storage

This paper proposes a market mechanism for multi-interval electricity markets with generator and storage participants. Drawing ideas from supply function bidding, we introduce a novel bid structure for storage participation that allows storage units to communicate their cost to the market using energy-cycling functions that map prices to cycle depths. The resulting market-clearing process – implemented via convex programming – yields corresponding schedules and payments based on traditional energy prices for power supply and per-cycle prices for storage utilization. We illustrate the benefits of our solution by comparing the competitive equilibrium – assuming price-taker participants – of the resulting mechanism to that of an alternative solution that uses prosumer-based bids. Our solution shows several advantages over the standard prosumer-based approach that prices energy per slot. It does not require a priori price estimation. It also incentivizes participants to reveal their truthful cost, thus leading to an efficient, competitive equilibrium. Numerical experiments using New York Independent System Operator (NYISO) data validate our findings.

An efficient and incentive-compatible market design for energy storage participation

With the increasing penetration of renewables, energy storage systems (ESS) are becoming growingly important due to its peak-shaving ability. However, the current market mechanism is not well prepared for the participation of the ESSs. Firstly, the current bidding structure requires the ESSs to submit separate parameters for charging and discharging, but this structure is inconsistent with their operating characteristics. Secondly, the current settlement rule settles the ESSs according to time-variant locational marginal prices (LMP), but the diminishing intertemporal price spreads will encourage them to behave strategically. To this end, this paper proposes a novel bidding structure, a corresponding clearing model and a modified settlement rule: The bidding structure for the ESSs includes cost functions with respect to cycling mileages and valuation functions for ending stored energy. Thereafter the independent system operators (ISO) will manage the ESSs’ state of charge (SOC) and clear the market. A settlement rule based on Vickery-Clarke-Groves (VCG) mechanism and Asymmetric Nash Bargaining theory is adopted to incentivize the ESSs to behave honestly. Numerical tests are conducted to illustrate the social welfare efficiency, incentive compatibility and computational tractability of the proposed mechanism.

Design of a local energy market with multiple energy carriers

Recent developments in the electric power sector as well as in district heating and cooling systems has led to an increased interest in local energy systems and markets. In the electricity sector, this is driven by the integration of distributed resources such as solar power, electric vehicles and demand response. For district heating, sustainability and energy efficiency targets drives the development to further exploit small-scale heat sources. A closer integration of these energy carriers can also unlock potential flexibility, to the benefit of local as well as overlaying systems. In this respect, there is a need to further explore the possibilities to design local energy markets to facilitate the integration between electricity and district heating, as well as providing adequate instruments enabling flexibility. This paper therefore presents a market clearing design, based on optimization, for local energy markets incorporating multiple energy carriers and bid structures suitable for representing flexibility. The market clearing model is applied in a case study to illustrate and validate key design elements. One conclusion is that even though various elements can be added to the market clearing function, there is a challenge to interpret the results due to an increased complexity of the resulting optimization problem.

Implications of bid structures on the offering strategies of merchant energy storage systems

Energy storage Systems (ESS) may play a pivotal role in the cost-efficient integration of renewable energy sources. Integrating large volumes of grid-scale energy storage into electricity markets, however, raises questions related to their profitability and impact on electricity prices. This paper explores the implications of different bid structures on the strategic behavior of a storage owner that participates in the wholesale market and is able to influence prices to maximize its profits. We conduct a comparative analysis on four bid structures present in existing markets and the scientific literature: (i) simple quantity-based bids, (ii) simple price-based bids, (iii) price-quantity pairs bids and (iv) complex bidding in which the ESS owner provides full information of its technical characteristics through the bids. The decision problem of the ESS owner is formulated as a bilevel programming model, where the upper-level problem represents the profit maximization of the ESS and the lower-level problem simulates possible market clearing outcomes. These bilevel models are reformulated as equivalent mixed-integer linear programming problems by means of the Karush-Kuhn-Tucker optimality conditions, the strong duality theorem and the Big-M method. In a case study, we show that when the ESS owner is uncertain about the market clearing outcome, the bid structure affects the ESS’s profitability and, to a lesser extent, the market’s efficiency and the system’s generation costs.

ATTRACTING AND IDENTIFYING HIGH PERFORMING PROJECT MANAGERS

Construction project managers (PMs) are critical to the execution of successful construction projects, conducting and orchestrating the intricacies of dynamic and complex projects. A large state university was challenged with attracting and retaining PMs in their construction department during a period of rapid university growth and departmental re-organization. The university tried current models for selecting construction PM firms largely based on commodities-based procurement and/or low bid structures and was unsuccessful. A new model was developed that considered and analyzed both the capabilities and qualifications of the individual PMs. The importance of individuals being able to identify their unique capabilities, be accountable for their performance, and operate in a transparent environment are critical concepts within this model. The new model also created an environment of organizational transparency, requiring PMs to measure their performance and the performance of their projects. The model resulted in an overwhelming amount of high quality PMs seeking to join the university. The university initially sought a specific skills set for new PMs, but revised their criteria and future selection processes for hiring future PMs based on the results of this model. Analysis of the PM capabilities, qualifications, and performance are shared as well as lessons learned to refine the model. This model can also be used to identify high performing individuals in other positions or disciplines.

Network similarity and collusion

This study focuses on how collusive construction industry cartels structure their bidding patterns to increase their market shares, while preserving an illusion of competition. Using past research on the economics and social organization of bid-rigging and collusion, we examine a key issue related to similarities within bidding structures that are likely tainted by cartels. The study is empirically based on public procurement data to recreate the structure of interactions between construction industry firms in the province of Quebec (Canada) over a 12-year period (2002–2013). Cross-level multivariate analyses demonstrate that our indicator of similarities in bidding patterns, the Jaccard coefficient, is a positive factor of market shares, but particularly in cities that are targeted for collusive practices. We also emphasize the need to develop a monitoring system that allows researchers and analysts to track collusion patterns in various ways so as to prevent an increase of more sophisticated schemes and cartels.

Deploying storage assets to facilitate variable renewable energy integration: The impacts of grid flexibility, renewable penetration, and market structure

As variable renewable wind and solar resources constitute a larger fraction of electricity supply, interest in flexible resources, including demand response, dispatchable generation, transmission interconnection, and storage technologies is growing. This paper evaluates the utility of storage assets given different electricity system configurations, market paradigms, and management schemes using a production cost model. When a large share of non-renewable generation is derived from inflexible sources, storage is imperative even at relatively low renewable penetrations. At high renewable penetrations, storage becomes increasingly important in flexible systems as well. In addition to renewable penetration, storage utilization rates are sensitive to the storage assets' market bidding structure and ownership paradigm, particularly in inflexible electricity systems. Storage assets consume during low-cost hours and generate during high-cost hours, regardless of bidding structure, but the price delta is largest for a centrally-controlled storage asset bidding with a price arbitrage motive. Storage utility cannot be deduced from an individual metric, but rather depends on the interaction between bidding mechanism, renewable penetration, and system flexibility.

Testing the Limits of Temporal Stability: Willingness to Pay Values among Grand Canyon Whitewater Boaters Across Decades

AbstractWe directly compare trip willingness to pay (WTP) values between 1985 and 2015 stated preference surveys of private party Grand Canyon boaters using identically designed valuation methods. The temporal gap of 30 years between these two studies is well beyond that of any tests of WTP temporal stability in the literature. Comparisons were made of mean WTP estimates for four hypothetical Colorado River flow level scenarios. WTP values from the 1985 survey were adjusted to 2015 levels using the consumer price index. Mean WTP precision was estimated through simulation. No statistically significant differences were detected between the adjusted Bishop et al. (1987) and the current study mean WTP estimates. Examination of pooled models of the data from the studies suggest that while the estimated WTP values are stable over time, the underlying valuation functions may not be, particularly when the data and models are corrected to account for differing bid structures and possible panel effects.

Optimal bidding strategy for price takers and customers in a competitive electricity market

AbstractBidding strategies are highly associated with the profit maximization and decreasing the risks for power utilities in a competitive market. For finding the optimal bidding strategies price takers need appropriate bidding structure. Thus, it is required to consider the model as a bi-level optimization problem. In the lower level price takers submit bid strategically to the ISO and in the upper level maximization of social welfare performed by solving the ISO Market clearing price (MCP). This paper aim to summarize the price taker’s bidding strategy modeling methods for competitive market models on the state-of-the art. A new genetic algorithm approach in a day-ahead electricity market in sealed auction with a pay-as-bid MCP has been employed to solve the problem from two different viewpoints i.e. with symmetrical and unsymmetrical information. The efficiency of the proposed method has been tested on the IEEE-30 bus system.

Paid Search Advertising

This note provides a primer on paid search advertising, which is an important component of digital marketing. The mechanics of paid search is explained using the Google search engine platform. The note covers metrics for evaluating the performance of paid search, the strategic objective of paid search, the relationship between customer lifetime value and search ads, how to overcome sparse data problems using keyword clouds, and the nature of Google AdWords's enhanced campaigns. Excerpt UVA-M-0860 Rev. May 3, 2018 Paid Search Advertising You're in the market for a baseball cap, an espresso maker, and a Ferrari F430 (lucky you). You decide you'd like to purchase each of the items in an online auction. You'd like to pay $ 10 for the hat, $ 1,000 for the coffee maker, and $ 150,000 for the Ferrari, so you set aside $ 151,010 to make sure you land your items. Without understanding the nuances of the bidding structure, you decide to take an average of your total budget and allocate that as your bid amount on each item—$ 50,336.67 for the hat, $ 50,336.67 for the espresso maker, and $ 50,336.67 for the Ferrari. Much to your dismay, you later learn you've won the auctions for the hat and espresso machine but missed out on the Ferrari. As ridiculous as the strategy sounds, this is what can happen when businesses run paid search advertising campaigns without trying to optimize or target their efforts to the business context and nuances of the system at hand. . . .

Carbon-based bidding structure in competitive electricity markets

With changes to carbon output imminent as a result of governmental policies, the method by which energy generators in competitive markets are selected for operation can be called into question. We first simulated a bid-based day-ahead market with human participants and then analyzed generation asset owners’ profits based on bid strategy. We then studied computing generator unit dispatch for this simulated market by introducing an environmental index related to the carbon intensity of the relevant fuel type, and computing dispatch via linear programming to either maximize or minimize this index subject to the constraint that average profits be the same as in the original market simulation. The results show that lower bids, even below cost, are most profitable for generators, and that adding an environmental weighting to the bid process has the potential to reduce carbon intensity of power generation without reducing overall average profitability to generators or increasing cost to consumers. This research concludes an environmental score should be explored as a potential weighting factor in bid-based electricity market dispatch.

Coupled active and reactive market in smart distribution system considering renewable distributed energy resources and demand response programs

Summary In this paper a new framework is introduced to develop a coupled active and reactive market in distribution networks. Distributed energy resources (DERs) such as synchronous machine–based distributed generations and wind turbines offer their active and reactive powers to the proposed market. For the considered DERs, multicomponent reactive power bidding structures are introduced based on their capability curves. Also, the hourly speed variations of wind turbines are considered in the proposed model. A distribution company buys active and reactive powers from a wholesale market and sells them via this market. The demand side is active, and responsive loads or aggregators can participate in the market using a demand bidding/buyback program. The objective function of the proposed market is to minimize the active and reactive power costs of DERs and distribution companies, the penalty cost of CO2 emission, and the cost of running a demand bidding/buyback program. The effectiveness of the proposed method is examined on a 22-bus 20-kV radial distribution test system.

Electricity price forecasting using sale and purchase curves: The X-Model

Our paper aims to model and forecast the electricity price by taking a completely new perspective on the data. It will be the first approach which is able to combine the insights of market structure models with extensive and modern econometric analysis. Instead of directly modeling the electricity price as it is usually done in time series or data mining approaches, we model and utilize its true source: the sale and purchase curves of the electricity exchange. We will refer to this new model as X-Model, as almost every deregulated electricity price is simply the result of the intersection of the electricity supply and demand curve at a certain auction. Therefore we show an approach to deal with a tremendous amount of auction data, using a subtle data processing technique as well as dimension reduction and lasso based estimation methods. We incorporate not only several known features, such as seasonal behavior or the impact of other processes like renewable energy, but also completely new elaborated stylized facts of the bidding structure. Our model is able to capture the non-linear behavior of the electricity price, which is especially useful for predicting huge price spikes. Using simulation methods we show how to derive prediction intervals for probabilistic forecasting. We describe and show the proposed methods for the day-ahead EPEX spot price of Germany and Austria.

Economic-environmental active and reactive power scheduling of modern distribution systems in presence of wind generations: A distribution market-based approach

Distribution System Operator (DSO) is responsible for active and reactive power scheduling in a distribution system. DSO purchases its active and reactive power requirements from Distributed Energy Resources (DERs) as well as the wholesale electricity market. In this paper, a new economical/environmental operational scheduling method based on sequential day-ahead active and reactive power markets at distribution level is proposed to dispatch active and reactive powers in distribution systems with high penetration of DERs. In the proposed model, after day-ahead active power market was cleared the participants submit their reactive power bids and then the reactive power market will be settled. At distribution level, developing a Var market, in which DERs like synchronous machine-based Distributed Generation (DG) units and Wind Turbines (WTs) could offer their reactive power prices, DERs are motivated to actively participate in the Volt/VAr Control (VVC) problem. To achieve this purpose, based on the capability curves of considered DERs, innovative multi-component reactive power bidding structures for DERs are introduced. Moreover, the effect of reactive power market clearing on the active power scheduling is explicitly considered into the proposed model by rescheduling of active power by usage of energy-balance service bids. On the other hand, environmental concerns that arise from the operation of fossil fuel fired electric generators are included in the proposed model by employing CO2 emission penalty cost. The suggested reactive power market is cleared through a mixed-integer nonlinear optimization program. The effectiveness of the proposed scheduling model is investigated through a typical 22-bus distribution test system over a 24-h period.

Extending the bidding format to promote demand response

We propose an extended bidding structure to allow more realistic demand characteristics and behaviors to be expressed via flexible bids. In today's ISO-run energy markets, demand bid formats are all separable over time. However, a significant and growing segment of demand can be shifted across time and therefore has no way to bid its true valuation of consumption. We propose additional bid types that allow deferrable, adjustable and storage-type loads to better express their value, and thus elicit demand response in the most natural way – via direct participation in the market. We show that the additional bid types are easily incorporated into the existing market with no technological barrier and that they preserve the market's efficiency and incentive-compatibility properties. Using real market data, we give a numerical demonstration that the extended bid format could substantially increase social welfare, and also present additional insight on storage expansion scenarios.

10.5937/zeint24-6997 = Assessment of the operating conditions of coordinated Q-V controller within secondary voltage control system

The paper, discusses the possibility to use coordinated Q-V controller (CQVC) to perform secondary voltage control at the power plant level. The CQVC performs the coordination of the synchronous generators' (SG) reactive power outputs in order to maintain the same total reactive power delivered by the steam power plant (SPP), while at the same time maintaining a constant voltage with programmed reactive droop characteristic at the SPP HV busbar. This busbar is the natural pilot node for secondary voltage control at HV level as the node with maximum power production and maximum power consumption. In addition to voltage control, the CQVC maintains the uniform allocation of reactive power reserves at all SGs in the power plant. This is accomplished by setting the reactive power of each SG at given operating point in accordance to the available reactive power of the same SG at that point. Different limitations imposed by unit's and plant equipment are superimposed on original SG operating chart (provided by the manufacturer) in order to establish realistic limits of SG operation at given operating point. The CQVC facilitates: i) practical implementation of secondary voltage control in power system, as it is capable of ensuring delivery of reactive power as requested by regional/voltage control while maintaining voltage at system pilot node, ii) the full deployment of available reactive power of SGs which in turn contributes to system stability, iii) assessment of the reactive power impact/contribution of each generator in providing voltage control as ancillary service. Furthermore, it is also possible to use CQVC to pricing reactive power production cost at each SG involved and to design reactive power bidding structure for transmission network devices by using recorded data. Practical exploitation experience acquired during CQVC continuous operation for over two years enabled implementation of the optimal setting of reference voltage and droop on daily, monthly and seasonal basis. Finally, the paper suggests and elaborates on studies related to application of several coordinated Q-V controllers in power system to facilitate secondary voltage control. It is shown that the CQVC can be used to maintain desired voltage at assigned pilot node in the power system with predefined reactive droop characteristic, and such maintain the required voltage profile across the transmission network based on commands received from upper hierarchical control level.

Congestion management with generic load model in hybrid electricity markets with FACTS devices

The load variations during the entire day specially during the peak hours have substantial impact on the loading pattern of the transmission system. The voltage profile become poor during such situation of peak loading of the network and can lead to congestion during such events. This paper attempts congestion management considering the impact of constant impedance, current, and power (ZIP) load model along with the load variation pattern in a day-a-head hybrid electricity market. The main contribution of the proposed work is: (i) Optimal rescheduling based congestion management for a hybrid market model with three bid offer from generators, (ii) study of the impact of ZIP load model and load variations on rescheduling and congestion cost, (iii) impact of third generation FACTS devices on congestion management, (iv) comparison of results obtained for hybrid market model without and with ZIP load model. The generators offer three block bid structure to the ISO in a day-a-head market for congestion management. The base case economic load dispatch has been obtained for generators and is taken as base case generation output data during the congestion management to obtain new generation schedule. The three block bid structure submitted to the ISO has been modeled as a linear bid curve which is a function of increment/decrement (inc./dec.) of generation within the upper and lower bounds offered for congestion management. The results have been obtained for IEEE 24 bus test systems.

Structural Insights of tBid, the Caspase-8-activated Bid, and Its BH3 Domain

The Bcl-2 family proteins regulate mitochondria-mediated apoptosis through intricate molecular mechanisms. One of the pro-apoptotic proteins, tBid, can induce apoptosis by promoting Bax activation, Bax homo-oligomerization, and mitochondrial outer membrane permeabilization. Association of tBid on the mitochondrial outer membrane is key to its biological function. Therefore knowing the conformation of tBid on the membrane will be the first step toward understanding its crucial role in triggering apoptosis. Here, we present NMR characterization of the structure and dynamics of human tBid in 1-palmitoyl-2-hydroxy-sn-glycero-3-[phospho-RAC-(1-glycerol)] micelles. Our data showed that tBid is monomeric with six well defined α-helices in the micelles. Compared with the full-length Bid structure, a longer flexible loop between tBid helix α4 and α5 was observed. Helices in tBid do not pack into a compact-fold but form an extended structure with a C-shape configuration in the micelles. All six tBid helices were shown to interact with LPPG micelles, with helix α6 and α7 being more embedded. Of note, the BH3-containing helix α3, which was previously believed to be exposed above the membrane surface, is also membrane associated, suggesting an "on the membrane" binding mode for tBid interaction with Bax. Our data provided structural details on the membrane-associated state of tBid and the functional implications of its membrane-associated BH3 domain.

Utilizing a vanadium redox flow battery to avoid wind power deviation penalties in an electricity market

Utilizing a vanadium redox flow battery (VRFB) for better market integration of wind power at a single wind farm level was evaluated. A model which combines a VRFB unit and a medium sized (10MW) wind farm was developed and the battery was utilized to compensate for the deviations resulting from the forecast errors in an electricity market bidding structure. VRFB software model which was introduced in our previous paper was integrated with real wind power data, power forecasts and market data based on the Spanish electricity market. Economy of the system was evaluated by financial assessments which were done by considering the VRFB costs and the amount of deviation penalty payments resulting from forecast inaccuracies.