A Scenario-oriented Approach for Energy-Reserve Joint Procurement and Pricing

We propose a scenario-oriented approach for energy-reserve joint procurement and pricing in electricity markets. In this model, without empirical reserve requirements, reserve is procured according to all possible contingencies and load/renewable generation fluctuations in non-base scenarios, and the deliverability of reserve is ensured through network constraints in all scenarios considered. Based on the proposed model, a locational marginal pricing approach has been developed for both energy and reserve. The associated settlement process is also discussed in detail. Under certain assumptions, the proposed pricing approach is a set of uniform pricing at the same location and the property of revenue adequacy for the system operator has also been established.

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