Day-ahead market design enabling co-optimized reserve procurement in Europe

Recent trend in expansion of intermittent power capacity in Europe invokes more demand for power control services and innovation in their market. In this paper, a market arrangement that enables simultaneous power exchange clearing and reserve capacity procurement is proposed. Motivation of implementing such co-optimized short term market in liberalized self-scheduling, power markets is discussed. Centralized and sequential market designs are outlined and important properties of co-optimized reserve procurement are presented. We develop a concept of combined energy-reserve offers to be submitted at voluntary power exchanges. Furthermore, clearing rules are demonstrated on examples and we investigate the design from multiple stakeholders' point of view. Also, we find that the proposed design can alleviate the difficulties of system operators regarding reserve procurement.