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DOE OSTI · 1460978

An Improved Stochastic Unit Commitment Formulation to Accommodate Wind Uncertainty

Uckun, Canan·Botterud, Audun·Birge, John R.
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Abstract

The United States targets to supply 20% of its electricity generation using wind energy by 2030. The expansion of renewable resources, especially weather-based resources such as wind, creates more uncertainty and variability in the operation of the power grid. New methods and approaches in electricity market operations are needed to efficiently manage the continuing increase in variability and uncertainty caused by expanding intermittent wind. This paper proposes an improved stochastic programming approach for incorporating wind uncertainty into energy markets. The proposed formulation improves the two-stage stochastic unit commitment problem by introducing a dynamic decision making approach similar to a multi-stage formulation in the presence of wind power scenarios which are not well represented by a scenario tree. The numerical results present up to 1%-2% decrease in operational costs compared to the two-stage stochastic unit commitment formulation.

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Uckun, Canan, Botterud, Audun, Birge, John R.. 2016-07-01. An Improved Stochastic Unit Commitment Formulation to Accommodate Wind Uncertainty. https://doi.org/10.1109/tpwrs.2015.2461014

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DOE OSTI2026

The relative influences of hydrologic information and dams’ hydropower scheduling decisions on electricity price forecasts

Price dynamics in wholesale electricity markets are driven by supply and demand. In markets with hydroelectric dams, the timing and amount of hydropower offered can influence prices in similar ways to wind and solar power. Unlike variable renewable energy, however, the supply of hydropower in wholesale markets is a function of both water availability and operational decisions at dams. Dam operators maximize revenues in wholesale markets by aligning generation with the periods of highest expected prices, and these scheduling decisions may in turn influence prices. Here, we examine the relative importance of two types of information in predicting forward electricity prices: a) water availability at dams, in the form of short-to-medium-range hydrological forecasts; and b) hourly scheduling decisions at dams. Using softly coupled hydrologic, hydropower scheduling, and power systems models spanning the U.S. Western Interconnection, we quantify the importance of hydrologic forecast accuracy in correctly predicting wholesale electricity prices and compare this with the influence of dam operators’ own hourly scheduling decisions on realized market prices. We find that aligning hydropower generation schedules with the periods of high forecasted prices causes larger, inadvertent price forecast errors than imperfect hydrologic forecasts. This suggests that knowledge of how water is managed by dam operators within the week is more important than weekly inflow forecast errors when predicting forward electricity prices. Our findings have implications for optimal hydropower scheduling by region. Specifically, accounting for price effects is critical in markets dominated by hydropower capacity.

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