Reserve procurement through demand response markets in wind integrated power systems

The volatility of power production by wind power stations has always been considered as a drawback for high penetration of this type of energy. To deal with the uncertainty of wind power, system operators must ensure a desirable level of reserves in their power systems. In this context, demand response (DR) markets can be used as options for system operators to procure their reserve requirements. The recently introduced DR market is a separate market where DR is considered as resource to be traded between DR buyers and sellers. There are still challenges to integrate the DR markets into the existing markets. This paper tries to combine the DR market with the energy/reserve markets with the aim of mitigating the wind-uncertainty costs. For this purpose, the joint clearance of DR markets with the energy/reserve markets is formulated as a bilevel programming problem. In this framework, system requirements for reserve in power systems with high wind power integration determined in the upper-level problem. The lower-level problem belongs to the DR market clearing problem. The solution approach for the resulting bilevel model is introduced. Finally, the proposed model is verified by a realistic case study.

I. Introduction

Environmental concerns and increasing price of fossil fuel necessitate utilization of renewable energy resources in the power generation sector. Variability and uncertainty of renewable energies (namely wind power) increase the power system requirement for reserve. Therefore, the transmission system operator (TSO) must procure a desirable lever of reserves with the aim of ensuring secure and efficient operation of the power system.