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SUMMARY:Electricity Dispatch and Pricing using Agent Decision Rules  - And
 y Philpott\, University of Auckland
DTSTART:20241015T113000Z
DTEND:20241015T123000Z
UID:TALK222706@talks.cam.ac.uk
CONTACT:Jacque Woolley
DESCRIPTION:Models for computing economic dispatch and prices in wholesale
  electricity market pools are typically deterministic multiperiod mathemat
 ical programs that are solved in a rolling horizon fashion. In convex sett
 ings with perfect foresight these optimization problems yield dispatch out
 comes and locational marginal prices that solve a  competitive equilibrium
  problem. Growing investment in renewable energy has increased the uncerta
 inty in net demand to be met by dispatchable generation. To accommodate th
 is\, stochastic programming models formulated using scenario trees have be
 en proposed for economic dispatch. The use of these models in practice is 
 challenging for several reasons. Market participants need to agree on the 
 scenarios used for uncertain parameters in the model\, and realizations of
  these parameters will be different from those in any modelled scenario. W
 hen updated in a rolling horizon fashion\, stochastic models can misprice 
 the option value of energy storage and the value of changing current dispa
 tch to meet future ramping constraints. This leads to uplift payments that
  compensate participants for the fact that the system operator forecasts t
 he future incorrectly. \nWe present a class of new economic dispatch model
 s that attempt to overcome these drawbacks\, based on agent decision rules
  (ADRs). Forecasting future outcomes or scenarios passes from the system o
 perator to market participants who implicitly make state-dependent offers 
 of energy through these decision rules. We show how storage and ramping ca
 n be priced correctly in convex markets and illustrate the advantages of t
 he new model through simple examples.\n
LOCATION: Cambridge Judge Business School\, W4.05
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