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Energy procurement strategies in the presence of intermittent sources

Authors:

Jayakrishnan Nair,

Sachin Adlakha,

Adam WiermanAuthors Info & Claims

ACM SIGMETRICS Performance Evaluation Review, Volume 42, Issue 1

Pages 85 - 97

https://doi.org/10.1145/2637364.2591982

Published: 16 June 2014 Publication History

Abstract

The increasing penetration of intermittent, unpredictable renewable energy sources such as wind energy, poses significant challenges for utility companies trying to incorporate renewable energy in their portfolio. In this work, we study the problem of conventional energy procurement in the presence of intermittent renewable resources. We model the problem as a variant of the newsvendor problem, in which the presence of renewable resources induces supply side uncertainty, and in which conventional energy may be procured in three stages to balance supply and demand. We compute closed-form expressions for the optimal energy procurement strategy and study the impact of increasing renewable penetration, and of proposed changes to the structure of electricity markets. We explicitly characterize the impact of a growing renewable penetration on the procurement policy by considering a scaling regime that models the aggregation of unpredictable renewable sources. A key insight from our results is that there is a separation between the impact of the stochastic nature of this aggregation, and the impact of market structure and forecast accuracy. Additionally, we study the impact on procurement of two proposed changes to the market structure: the addition and the placement of an intermediate market. We show that addition of an intermediate market does not necessarily increase the efficiency of utilization of renewable sources. Further, we show that the optimal placement of the intermediate market is insensitive to the level of renewable penetration.

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Cited By

Shilov ILe Cadre HBušić ASanjab APinson P(2023)Towards Forecast Markets For Enhanced Peer-to-Peer Electricity Trading2023 IEEE International Conference on Communications, Control, and Computing Technologies for Smart Grids (SmartGridComm)10.1109/SmartGridComm57358.2023.10333930(1-7)Online publication date: 31-Oct-2023
https://doi.org/10.1109/SmartGridComm57358.2023.10333930
Chakraborty NChoudhury NTiwari P(2023)Profit Maximization of Retailers with Intermittent Renewable Sources and Energy Storage Systems in Deregulated Electricity Market with Modern Optimization Techniques: A ReviewRenewable Energy Focus10.1016/j.ref.2023.10049247(100492)Online publication date: Dec-2023
https://doi.org/10.1016/j.ref.2023.100492
de Chalendar JGlynn P(2021)On incorporating forecasts into linear state space model Markov decision processesPhilosophical Transactions of the Royal Society A: Mathematical, Physical and Engineering Sciences10.1098/rsta.2019.0430379:2202(20190430)Online publication date: 7-Jun-2021
https://doi.org/10.1098/rsta.2019.0430
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Index Terms

Energy procurement strategies in the presence of intermittent sources
1. Applied computing

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Information

Published In

cover image ACM SIGMETRICS Performance Evaluation Review

ACM SIGMETRICS Performance Evaluation Review Volume 42, Issue 1

Performance evaluation review

June 2014

569 pages

ISSN:0163-5999

DOI:10.1145/2637364

Editors:
Derek Eager
University of Saskatchewan
,
Carey Williamson
University of Calgary

Issue’s Table of Contents

SIGMETRICS '14: The 2014 ACM international conference on Measurement and modeling of computer systems
June 2014
614 pages
ISBN:9781450327893
DOI:10.1145/2591971
General Chairs:
Sujay Sanghavi
The University of Texas at Austin
,
Sanjay Shakkottai
The University of Texas at Austin
,
Program Chairs:
Marc Lelarge
INRIA, France
,
Bianca Schroeder
University of Toronto

Copyright © 2014 ACM.

Permission to make digital or hard copies of all or part of this work for personal or classroom use is granted without fee provided that copies are not made or distributed for profit or commercial advantage and that copies bear this notice and the full citation on the first page. Copyrights for components of this work owned by others than ACM must be honored. Abstracting with credit is permitted. To copy otherwise, or republish, to post on servers or to redistribute to lists, requires prior specific permission and/or a fee. Request permissions from [email protected]

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Association for Computing Machinery

New York, NY, United States

Publication History

Published: 16 June 2014

Published in SIGMETRICS Volume 42, Issue 1

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Cited By

Shilov ILe Cadre HBušić ASanjab APinson P(2023)Towards Forecast Markets For Enhanced Peer-to-Peer Electricity Trading2023 IEEE International Conference on Communications, Control, and Computing Technologies for Smart Grids (SmartGridComm)10.1109/SmartGridComm57358.2023.10333930(1-7)Online publication date: 31-Oct-2023
https://doi.org/10.1109/SmartGridComm57358.2023.10333930
Chakraborty NChoudhury NTiwari P(2023)Profit Maximization of Retailers with Intermittent Renewable Sources and Energy Storage Systems in Deregulated Electricity Market with Modern Optimization Techniques: A ReviewRenewable Energy Focus10.1016/j.ref.2023.10049247(100492)Online publication date: Dec-2023
https://doi.org/10.1016/j.ref.2023.100492
de Chalendar JGlynn P(2021)On incorporating forecasts into linear state space model Markov decision processesPhilosophical Transactions of the Royal Society A: Mathematical, Physical and Engineering Sciences10.1098/rsta.2019.0430379:2202(20190430)Online publication date: 7-Jun-2021
https://doi.org/10.1098/rsta.2019.0430
Huang QJia QGuan X(2017)A Multi-Timescale and Bilevel Coordination Approach for Matching Uncertain Wind Supply With EV Charging DemandIEEE Transactions on Automation Science and Engineering10.1109/TASE.2016.258518014:2(694-704)Online publication date: Apr-2017
https://doi.org/10.1109/TASE.2016.2585180
Longoria GShi L(2017)Nash-equilibrium electricity portfolios in the smart grid: A genetic annealing solution2017 5th International Istanbul Smart Grid and Cities Congress and Fair (ICSG)10.1109/SGCF.2017.7947601(56-59)Online publication date: Apr-2017
https://doi.org/10.1109/SGCF.2017.7947601
Methenitis GKaisers MPoutré H(2016)Incentivizing intelligent customer behavior in smart-gridsProceedings of the Twenty-Fifth International Joint Conference on Artificial Intelligence10.5555/3060621.3060675(380-386)Online publication date: 9-Jul-2016
https://dl.acm.org/doi/10.5555/3060621.3060675
Le Cadre HPapavasiliou ASmeers Y(2015)Wind farm portfolio optimization under network capacity constraintsEuropean Journal of Operational Research10.1016/j.ejor.2015.05.080247:2(560-574)Online publication date: Dec-2015
https://doi.org/10.1016/j.ejor.2015.05.080
Qin JRajagopal RVardi SWierman A(2019)Convex Prophet InequalitiesACM SIGMETRICS Performance Evaluation Review10.1145/3305218.330525046:2(85-86)Online publication date: 17-Jan-2019
https://dl.acm.org/doi/10.1145/3305218.3305250
Qin JRajagopal RVardi SWierman A(2019)Convex Prophet InequalitiesACM SIGMETRICS Performance Evaluation Review10.1145/3305218.330523346:2(39-41)Online publication date: 17-Jan-2019
https://dl.acm.org/doi/10.1145/3305218.3305233
Nesti TNair JZwart B(2019)Temperature Overloads in Power Grids Under Uncertainty: A Large Deviations ApproachIEEE Transactions on Control of Network Systems10.1109/TCNS.2019.29224926:3(1161-1173)Online publication date: Sep-2019
https://doi.org/10.1109/TCNS.2019.2922492
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