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Electricity Systems

The field of Power Systems in Electrical Engineering covers a wide range of subfields, from generation to transmission networks, to distribution. There are many ways of analyzing a system, each serving a different aspect for control and monitoring. Typical problems in Power System Engineering involve testing the performance of a network, for example seeing the response electrically of what would happen is a branch was taken down or what happens to a node voltage-wise if we increase the Load. To consider the economic effects, a process called economic dispatch tries to figure out which generators are needed to supply a given demand. Economic Dispatch, as defined by FERC (the federal energy regulatory commission), is “the operation of generation facilities to produce energy at the lowest cost to reliably serve consumers, recognizing any operation limits of generation and transmission facilities”.

In economic dispatch, generators give both a cost function and a generation capacity. The demands, which now collectively refer to a group of consumers (an assumption made under wholesale trading), wants to find the lowest price to pay for their power needs. While this is typically a quadratic optimization problem, we can analyze it from the point of view of markets. If we associate a group of demands as agents and the generator’s power output as an object, this becomes an ideal allocation problem. As an aside, under normal circumstances the generators would have the economic authority here but because Power is a utility, there is heavy government oversight, by FERC, that ensures that the demands are not abused. Some factors that influence pricing is the positioning of these generators, the resource used the produce the power, the immediate necessity of the generator, the distance of a demand from a generator, and the priority with which a demand wants to ensure they always get power. These factors create different prices per generator that a demand wants to pay. Since each demand wants to pay the least amount of money, they would have a strict, but complete (since demands need power even if they must pay a lot for it) preference over which generators they want. Unlike the allocation problem described in class, demands rarely receive all the generation capacity of a single generator, and sometimes a group of demands can remove most of what a generator can supply, forcing a demand to use what capacity remains in a generator, along with whatever he needs more from his next available choice. To complicate matters, the generators have an incentive to supply the demands that pay them the most, which would be the demands who both have this generator high on their preference but would still pay more than other demands. This can get more complicated still, since some demands can be managed by entities who value other non-monetary incentives, such as wanting to use renewable energy-based generators, even though for them it would cost more than other generators. This forms a rather complex two-sided market, where both sides have a priority of who they want to sell to/buy from that need not be based purely on price, with multiple edges between nodes.

https://www.ferc.gov/CalendarFiles/20051110172953-FERC%20Staff%20Presentation.pdf

Power System Operations by Antonio Cornejo and Luis Baringo.

 ISBN 978-3-319-69406-1

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