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IEEE TRANSACTIONS ON POWER SYSTEMS, VOL. 22, NO.

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A Framework to Implement Supply and Demand Side Contingency Management in Reliability Assessment of Restructured Power Systems
Lalit Goel, Senior Member, IEEE, Viswanath P. Aparna, and Peng Wang, Member, IEEE
AbstractThis paper presents a framework to implement supply and demand side contingency management in the reliability assessment of hybrid power markets. A model for the independent system operator (ISO) to coordinate reserve and load curtailment bids for contingency states is introduced to balance reliability worth and reliability cost. The load curtailments and generation re-dispatch for a contingency state are determined based on minimizing the market interruption cost using an optimization technique. A nonsequential Monte Carlo simulation technique based on this framework has been proposed to evaluate the customer reliability of restructured power systems with the hybrid market model. The modied IEEE Reliability Test System (RTS) is used to illustrate the proposed technique. Index TermsContingency management, customer reliability, hybrid market, independent system operator (ISO), load curtailment bids, market interruption cost, Monte Carlo simulation, reliability assessment, reserve.

Power sold through bilateral contract. Total power sold by Genco. Total power purchased by customer. Curtailment cost for the bilateral transaction. Curtailment bid of customer for spot market transaction. Reserve bid price. Outage replacement rate. Failure rate. For sample Sampling state of unit. Sampling state of Genco. Available capacity of energy units of Genco. Available capacity of reserve unit. For contingency state Available capacity of energy units of Genco. Available capacity of reserve unit. Total generation of Genco after re-dispatch. Reserve dispatched. Power supplied by Genco in the spot market. Power supplied to customer in the spot market. Power supplied through bilateral contract. Generation curtailed from Genco to the spot market. Load curtailed for customer in the spot market. Load curtailed for bilateral customer. EENS of customer k. Expected reserve dispatch. Expected market interruption cost. II. INTRODUCTION

I. NOMENCLATURE Index for Genco. Index for customer. Index for generating units. Index for sampling state. Index for system contingency state. Number of Gencos. Number of customers. Number of units in Genco to supply energy. Number of units in Genco to provide reserve. Index for spot market (superscript). Index for bilateral contract (superscript). Index for generator (superscript). Index for customer (superscript). Number of Monte Carlo samples. Total reserve.

For unit , Genco , and customer Capacity of the unit. Total generation scheduled by Genco. Capacity of reserve unit. Power sold by Genco in the spot market. Power purchased by customer in the spot market.
Manuscript received August 18, 2005; revised August 17, 2006. Paper no. TPWRS-00523-2005. The authors are with Nanyang Technical University, Singapore. Digital Object Identier 10.1109/TPWRS.2006.887962

ESTRUCTURING of the electric power industry has resulted in the unbundling of main and ancillary services (AS) such as real power, reactive power, and reserve provision. Unlike the centralized reliability management used in conventional vertically integrated power systems, these main and ancillary services are traded as products in a power market to provide an opportunity for both Gencos and customers to participate in system reliability management. In the process of realization of self-desired reliability, the participants objective in this competitive environment is to maximize their individual benets.

0885-8950/$20.00 2006 IEEE

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For the smooth functioning of a power system as a whole, and for coordinating the activities of all the market participants, the independent system operator (ISO) plays an important role in reliability management [1]. In restructured power systems, the ISO or power exchange (PX) has the overall responsibility to manage system reserves and load curtailment bids to fulll the reliability commitments of Gencos and the reliability requirements of customers. In realtime operation, when generating resources are lost, the ISO will utilize the reserves or activate the load curtailments. Such a role by the ISO is very useful in reducing the cost of the expensive reserves and in including customer preferences for reliability needs in the decision-making process. Customers submit load curtailment bids based on their willingness to reduce demand when requested. Financial incentive programs that reward the customers for reducing their demand have been initiated in many power markets such as the interruptible load program in Singapore [2], NYISO [3], Alberta power pool in Canada [4], and demand relief program in California [5]. Reserve provisions from both supply side and demand side have gained importance in the new environment. In [6], various means for the provision of supply and demand side reserves in restructured power systems are examined. Reference [7] presents the design of a market for interruptible load services by addressing various issues associated with the procurement of load curtailment offers. Designing load curtailment contracts such that customers are compensated sufciently to participate voluntarily and at the same time ensuring the benet maximization of a utility while offering load curtailment is proposed in [8] and [9]. In order to increase signicant gains in economic efciency, joint dispatch of energy and reserve offers (both supply and demand side reserves) is proposed in [10]. Reliability evaluation techniques developed in the past were more suited for vertically integrated power systems [11], [12]. The objective during a contingency state then was to minimize the system interruption cost [13]. The minimum system interruption cost was based on the estimated damage cost [14] of the load and the cost of utilizing the system-wide reserve for the system-wide supply shortage. This was a valid concept then because the customers had no role to play in selecting their power supplier and/or reliability requirements. In the new environment, the customers are provided an opportunity to participate in the reliability management. A contingency state may arise due to generation inadequacy (unit failures) in one or many Gencos or due to transmission line outages. In this case, both Gencos and customers can be activated by the ISO to release the system unbalance. This has changed the mechanism of reliability management. The reliability evaluation techniques developed for conventional systems have to be reviewed or modied for suitability of application in the reliability evaluation of restructured power systems. This paper presents a framework to implement supply and demand side contingency management in the reliability assessment of hybrid power markets. A model for the ISO to coordinate the curtailment and reserve costs for a contingency state is introduced to balance reliability worth and reliability cost. The load curtailments and generation re-dispatch for a contingency state are determined based on minimizing the

market interruption cost using an optimization technique. A nonsequential Monte Carlo simulation technique based on this framework has been proposed to evaluate the reliability of restructured power systems in the hybrid market model. The spot market, bilateral, and reserve transactions are considered in the simulation. The modied IEEE Reliability Test System (RTS) [15] is used to illustrate the proposed technique. III. ENERGY AND ANCILLARY SERVICE DISPATCH IN THE HYBRID MARKET In the hybrid market, energy can be traded either in the electricity spot market or through bilateral contracts, spinning reserve is traded in the ancillary service market, and load curtailment bids are traded in the ancillary services market or through bilateral contracts. In the electricity spot market, Gencos and customers bid the quantity and prices. The energy market clearing price (EMCP) and sales and purchases of energy for the Gencos and customers are determined after the market clearing process. All the Gencos scheduled to supply energy are paid at the EMCP. All the customers who buy energy from the spot market pay at the EMCP. The energy price and quantity through a bilateral contract will be determined by the corresponding Genco and customer. A hybrid market with m Gencos and customers is shown in Fig. 1. The total power sold by Genco through the spot market and bilateral contracts is (1) A Genco will schedule its units to meet the aggregated spot and bilateral demand . The total power supplied by Genco with scheduled units to meet the spot and bilateral demand is

(2) The total power purchased by customer market is from the hybrid

(3) There is also an AS market for reserve and load curtailment bidding in a hybrid market. Gencos submit their reserve bids to the reserve market. It is assumed that the reserve units cannot participate in the energy market, and they are available to take up load when requested. The reserve bid prices are awarded when the reserve units are called upon to supply in case of contingencies. The total reserve in the AS market is (4) Customers bid for load curtailment in the AS spot market and for through bilateral contracts. A customer submits price

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Fig. 1. Framework for contingency management of a hybrid power market.

every MW load curtailed in the spot AS market. Similarly for is used as the curtailment bilateral contracts, a at rate of cost for every MW load curtailed. Customers are paid based on their curtailment bids when they are called to interrupt in case of contingencies. After the market settlement, the total number of units scheduled for providing energy and reserves from each Genco, the associated reliability data and installed capacity for each unit, and the load curtailment cost data from customers are provided to the ISO for contingency management of the system. IV. CONTINGENCY MANAGEMENT IN RESTRUCTURED POWER SYSTEMS The generation and reserve dispatched by an individual Genco may or may not be adequate to meet its demand in the different system states caused by random failures of generating

units. These system states can be divided into two states, namely, the normal state and the contingency state. In a normal state, all the Gencos have adequate generation to meet their demands. In a contingency state, one or more Gencos may have inadequate supply to meet its/their demands, or one or more transmission lines may be out of service. In this case, loads have to be shed, and generation has to be re-dispatched. In restructured power systems, Gencos and customers have their own preferences for the activation of reserve and curtailment of contracts to execute their transactions. The ISO plays an important role for reliable system operation during a contingency state by coordinating activities such as the activation of reserve and curtailment of contracts in the interest of all the market participants. The procedure for contingency management as shown in Fig. 1 includes the following steps:

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obtain the transaction and reliability data from the hybrid market; identify the contingency state using the contingency enumeration program based on the reliability and capacity data; determine the re-dispatched generation, the reserves, and load curtailments called under the minimization of market interruption cost using an optimization technique based on reserve and curtailment costs; inform all the market participants to curtail their individual spot market and bilateral transactions, and commit the reserve. The objective of contingency management is to minimize the market interruption cost. Market interruption cost consists of the curtailment cost for the customers interrupted and reserve costs for the reserve units dispatched. The Genco that has caused the interruption has to pay the interruption cost. A detailed formulation for minimizing the market interruption cost during a contingency state for the hybrid market model is presented in the next section.

The curtailment limits for bilateral transactions:

(8) The curtailment limits for the Gencos in the spot market:

(9) The curtailment limits for the Customers in the spot market:

(10) The limits for the available generation from the Gencos:

(11) The limits for reserve:

V. OPTIMAL DISPATCH OF RESERVES AND LOAD CURTAILMENTS In conventional power systems, the minimum system interruption cost is determined based on the system-wide curtailment cost due to system-wide supply shortage and reserve cost. In restructured power systems, the reserves supplied by Gencos and the activation of customers load curtailment bids are determined by market forces. During contingency state , the ISO has to determine the reserve units to be dispatched and the customers to be interrupted under the minimum total cost of load curtailment and reserve dispatched. The contingency management problem by the ISO is formulated as a linear programming problem with the objective of minimizing the total cost, which includes the curtailment costs of bilateral customers, the curtailment costs of the spot market customers, and the cost of the reserve dispatched. Problem Formulation The transmission limits:

(12)

(13) where is the power ow and is the upper limit of for line ; optimal dc power ow [16] is used to solve the problem if transmission is considered. The variables (or output) for this optimization problem for the , contingency state are the bilateral contract curtailments , Gencos spot transcustomers spot transactions curtailment , and the dispatch from reserve units actions curtailment . The contingency state transactions , , are determined by subtracting the curtailments , , from , , . The sum of the continthe original transactions gency state spot transactions and bilateral transactions of a Genco is equal to its total generation after re-dispatch . It should be noted that energy and ancillary services are dispatched separately. However, energy and ancillary services can be optimized simultaneously in a single market. One of the possible situations is the Poolco market structure. For example, the power market in Singapore includes both energy and ancillary services in a single market clearing process to minimize the total market cost. VI. RELIABILITY EVALUATION PROCEDURE USING NONSEQUENTIAL MONTE CARLO SIMULATION A nonsequential Monte Carlo simulation (MCS) technique for the reliability evaluation of restructured power systems in hybrid market models was developed based on the proposed framework for contingency management. A two-state model of generating units was used in the simulation. Exponentially

(5) Subject to the following constraints: The power balance constraints: (6) The reserve constraint of the spot market:

(7)

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distributed times to failure are assumed for each unit, and the outage replacement rate (ORR) [11] is used. The procedure to determine the system state for sample is as follows. is A uniformly distributed random number generated for each unit scheduled in the energy and reserve market to determine the state of the unit Operating state Failure state if if

(14) units is determined based The state of Genco with on the state of each unit of the Genco (15) The total available generation from Genco by is determined

(16) The available reserve from each unit in the primary reserve market is determined by
Fig. 2. IEEE reliability test system.

(17) The state of the system is determined based on the state of the Gencos and the transmission lines. If for sample and there are no transmission for outages, then the system is in the normal state. If sample , or if there is transmission congestion, then the system is in contingency state . If sample results in a contingency state , then all the symbols with subscript are represented by subscript . The procedure to evaluate the customer reliability is as follows. Step 1) Input transactions, reserve and curtailment bids, and the reliability data determined from the hybrid market. Step 2) Generate the sample state of all the units scheduled in the market by using (14). Step 3) Determine the states of each Genco using (14) and (15). , using (16) and (17), respecStep 4) Evaluate tively. Step 5) Check the state of the Gencos and transmission lines to determine the system state. If the system is in a contingency state, go to Step 6; else, if the system is in the normal state, go to Step 9. , , , and using the optiStep 6) Determine mization technique for the contingency state. Step 7) Inform the Gencos about the reserve units dispatch and contingency state transactions. Step 8) Inform the customers about the load curtailments and contingency state transactions. , go to Step 2; else, go to Step 10. Step 9) If Step 10) Calculate the customer reliability indexes, reserve dispatched, and market interruption cost. The expected load not supplied (ELNS) for customer is

(18) The expected reserve dispatched (ERD) from the reserve market is

(19) The expected market interruption cost (EMICOST) is

(20)

VII. SYSTEM ANALYSIS The IEEE RTS was analyzed to illustrate the proposed technique. The single-line diagram of the test system is given in Fig. 2. The system conguration data for the RTS are given in [12] and [15]. The modied failure rate data of the generating units are shown in Table IV of the Appendix. The test system is modi, ed into a restructured power system with ten Gencos (G1, G10) and 17 aggregated customers (L1, , L17) as shown in Fig. 2. The load at hour 18 of the second day of week 51 of the IEEE load model is analyzed. The transactions between the Gencos and customers are given inTable V of the Appendix.

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TABLE I ELNS (MW) OF THE CUSTOMERS

TABLE II ELNS (MW) OF THE CUSTOMERS

TABLE III ELNS (MW) OF THE CUSTOMERS

Fig. 3. Reserve costs and customer curtailment costs.

The curtailment bids are shown in Table VI. The energy and reserve units participating in the market are shown in Table VII. Three different cases of reserve bids submitted by the Gencos are shown in Table VIII. The lead-time is assumed to be four hours. A. Customer Reliability Indexes The customer reliability indexes for the reserve bids of Case I (of Table VIII) are presented in Table I. The solutions converge after 2500 Monte Carlo samples. It can be observed from Table I that the ELNS of customers depend on the curtailment bids of customers and the portion of spot and bilateral transactions. The difference between spot and bilateral transactions curtailments is that the bilateral transaction curtailment of a customer is based on the generation inadequacy resulting from the corresponding Genco, whereas in the case of spot market transactions, the customer curtailment is based on the generation inadequacy of the pool. For instance, aggregated customer L15 has 80% bilateral transactions and 20% spot transactions. The spot transactions have low ELNS, and the bilateral transactions have high ELNS. Therefore, the ELNS of L15 in the hybrid market is very high. The expected reserve dispatched (ERD) from G1, G9, and G10 is 65.45 MW. The costs for the reserve dispatched by

Gencos G1, G9, and G10 and the costs for the curtailment of customers L1 to L17 are shown in Fig. 3. B. Effect of Reserve Bid Price The impact of reserve bid price on the ELNS of customers was investigated. The ELNS of customers for the three cases of reserve bid prices of Table VIII are presented in Table II. The ELNS of customers L1L6 show high values when their curtailment bids are lower than the reserve bids. Similarly the ELNS of customers L1L6 show lower values when their curtailment bids are higher than the reserve bids. The ELNS of customer L7L17 who have bid higher than the reserve bids do not show wide variations of ELNS in all the three reserve bid price cases. C. Effect of Transmission Lines The impacts of transmission lines on the ELNS of customers for reserve bids of Case I were investigated and are shown in Table III. Three cases of a transmission network were considered. In Case A, the transmission network was not considered; in Case

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TABLE IV FAILURE RATE DATA OF THE GENERATING UNITS

TABLE VI CURTAILMENT BID DATA IN THE HYBRID MARKET

TABLE VII ENERGY AND RESERVE UNITS PARTICIPATING IN THE HYBRID MARKET

TABLE V TRANSACTIONS (MW) IN THE HYBRID MARKET

TABLE VIII DIFFERENT SET OF RESERVE BIDDING PRICES ($/MW)

B, the transmission lines were considered in load ow calculations; and in Case C, three lines between bus 13 and 23, bus 14 and 16, and bus 16 and 19 were removed. The ELNS of customers for the three cases are shown in Table III. The results clearly show that transmission outages result in higher ELNS of customers. VIII. CONCLUSIONS This paper proposes a framework to implement supply side reserve bids and demand side load curtailment bids for contingency management in reliability assessment of restructured power systems with hybrid market models. The IEEE RTS has been analyzed to illustrate the proposed technique. The impacts on customer reliability indexes of factors such as the spot and bilateral transactions of customers, reserve prices, and transmission constraints have been discussed. The reliability indexes provide the expected demand curtailed for a particular customer. The customers can bid for load curtailment more judiciously based on 1) the reliability indexes and 2) their ability to reduce or shift the load. The developed framework and the technique provide a possible tool for the ISO to implement the participation of Gencos and customers in reliability management.

The framework for contingency management is based on features of a hybrid market structure described in this paper. The proposed technique can be extended for application to real power markets, where market structures, system operation, and administrative rules are more complex. In this paper, it is assumed that different units will be used in energy and reserve markets. In this case, the reserve cost will be high, and the system will be more reliable. It should however be noted that the proposed technique can be extended to the case where a unit participates in both the reserve and energy markets. The dc OPF has been used in the proposed technique. The ac OPF can be used in real power markets in future studies to provide more accurate and realistic results. APPENDIX Table IV shows the failure rate data of the generating units. Table V shows the transactions (MW) in the hybrid market, Table VI shows the curtailment bid data in the hybrid market, Table VII shows the energy and reserve units participating in the hybrid market, and Table VIII shows the different set of reserve bidding prices ($/MW). REFERENCES
[1] P. Wang and R. Billinton, Reliability assessment of a restructured power system considering the reserve agreements, IEEE Trans. Power Syst., vol. 19, no. 2, pp. 972978, May 2004. [2] Energy Market Authority of Singapore. [Online]. Available: http://www.ema.gov.sg/. [3] Emergency Demand Response Program Manual. [Online]. Available: http://www.nyiso.com. [4] Power Pool of Alberta. [Online]. Available: http://www.powerpool.ab.ca. [5] California ISO. [Online]. Available: http://www.caiso.com.

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[6] E. H. Allen and M. D. Ilic, Reserve markets for power systems reliability, IEEE Trans. Power Syst., vol. 15, no. 1, pp. 228233, Feb. 2000. [7] L. A. Tuan and K. Bhattacharya, Competitive framework for procurement of interruptible load services, IEEE Trans. Power Syst., vol. 18, no. 2, pp. 889897, May 2003. [8] M. Fahrioglu and F. L. Alvarado, Designing incentive compatible contracts for effective demand management, IEEE Trans. Power Syst., vol. 15, no. 4, pp. 12551260, Nov. 2000. [9] , Using utility information to calibrate customer demand management behavior models, IEEE Trans. Power Syst., vol. 16, no. 2, pp. 317322, May 2001. [10] J. Wang, N. E. Redondo, and F. D. Galiana, Demand-side reserve offers in joint energy/reserve electricity markets, IEEE Trans. Power Syst., vol. 18, no. 4, pp. 13001306, Nov. 2003. [11] R. Billinton and R. N. Allan, Reliability Evaluation of Power Systems, 2nd ed. New York: Plenum, 1996. [12] R. Billinton and W. Li, Reliability Assessment of Electric Power Systems using Monte Carlo Methods. New York: Plenum, 1994. [13] W. Li and R. Billinton, A minimum cost assessment method for composite generation and transmission system expansion planning, IEEE Trans. Power Syst., vol. 8, no. 2, pp. 628635, May 1993. [14] G. Tollefson, R. Billinton, G. Wacker, E. Chan, and J. Aweya, Canadian customer survey to assess power system reliability worth, IEEE Trans. Power Syst., vol. 9, no. 1, pp. 443450, Feb. 1994. [15] Reliability Test System Task Force, IEEE reliability test system, IEEE Trans. Power App. Syst., vol. PAS-98, no. 6, pp. 20472054, Nov./Dec. 1979. [16] A. J. Wood and B. F. Wollenberg, Power Generation Operation, and Control. New York: Wiley, 1994. Lalit Goel (SM95) was born in New Delhi, India, in 1960. He received the B.Tech. degree in electrical engineering from the Regional Engineering Col-

lege, Warangal, India, in 1983 and the M.Sc. and Ph.D. degrees in electrical engineering from the University of Saskatchewan, Saskatoon, SK, Canada, in 1988 and 1991, respectively. He joined the School of Electrical and Electronic Engineering at the Nanyang Technological University (NTU), Singapore, in 1991, where he is presently Head of the Division of Power Engineering. Dr. Goel received the 1997 and 2002 Teacher of the Year Awards for the School of Electrical and Electronic Engineering, NTU. He served as Vice-Chairman of the IEEE Power Engineering Societys Winter Meeting 2000 and as Chairman of the IEEE PES Powercon 2004 conference held in Singapore. He received the IEEE Power Engineering Society Singapore Chapter Outstanding Engineer Award in 2000. He is the Regional Editor for Asia for the International Journal of Electric Power Systems Research and a Deputy Director at NTUs Protective Technology Research Center (PTRC).

Viswanath P. Aparna received the B.Sc. degree in electrical engineering from the Osmania University, Hyderabad, India, in 1995 . She is currently pursuing the Ph.D. degree in the School of Electrical and Electronic Engineering, Nanyang Technological University, Singapore. Her research interests are in power system reliability evaluation in a deregulated power market environment.

Peng Wang (M00) received the B.Sc. degree from Xian Jiaotong University, Xian, China, in 1978, the M.Sc. degree from Taiyuan University of Technology, Shanxi, China, in 1987, and the M.Sc. and Ph.D. degrees from the University of Saskatchewan, Saskatoon, SK, Canada, in 1995 and 1998, respectively. Currently, he is an Associate Professor of Nanyang Technological University, Singapore.