Market Implications of Short-Term Reserve Deliverability Enhancement

Midcontinent Independent System Operator (MISO) plans to introduce 30-minute short-term reserve (STR) to address 30 minutes system flexibility needs. Transmission bottlenecks in the power system may inhibit the deliverability of STR. Insufficient deliverable reserve may require additional operator manual adjustments, which may be uneconomic and distort the market price signal. To improve reserve deliverability, event-based zonal STR clearing model and nodal STR clearing model are proposed to distribute reserve across the grid. This paper compares reserve deliverability and market clearing prices between the zonal STR model and the nodal STR model. A new design on penalty function is proposed in this paper to reflect the true value of security constraints for reserve deployment with the consideration of multiple events. Analysis of MISO test cases shows that the zonal approach is imprecise and may not guarantee the actual post-event flows within the physical limits. Nodal STR model can improve the reserve deliverability, market efficiency, and price signal.