Projects and Related Studies
Energy Systems Transformation Initiative
Design and Simulation of the Future
Integrated Energy System
Markets & Economics Modeling
The major players in a power grid include generators, an independent system operator (ISO) or regional transmission operator (RTO) that controls transmission, aggregators that purchase power for distributors, the distributing utility (which itself can be an aggregator), the distribution network, and the final users. Markets — at the various levels — tie these players into a cohesive whole.
If prices are to play a role in mitigating fluctuations in supply and demand, agents that represent each of these players must be capable of responding to changes in the price of power by either curtailing use/augmenting supply or augmenting demand/curtailing supply depending on whether price signals are high or low, respectively. Moreover, it is not enough to conceive, model, and simulate such a price responsive system; an important additional requirement is that this system be capable of evolving from the current system to a price responsive one.
The residential-choice model that allows customers to switch from one contract to another demonstrates the characteristics of an interactive system that can both characterize the current market structure at the distribution level and can allow the evolution of the system to a truly interactive one. By integrating the distribution model with the bulk system model we formulate a more complete representation of the economic and physical interactions with which to begin to analyze questions regarding the transformed energy system.
Integrating distribution into the grid requires the development of a market for bulk power, a transmission market (locational marginal cost pricing), an ancillary services market (ISO or RTO services), and the inclusion of aggregators as market participants. This seems a formidable task, but, fortunately, there is considerable work ongoing in this area that we can draw on. Much of what we have used to arrive at our current venue uses models that characterize bulk power markets.
Project contact: Joseph Roop