Market Scheduling and Pricing for Primary and Secondary Frequency Reserve

The high penetration of renewable energy (RE) significantly impacts the power system frequency stability for the following reasons: first, the replacement of conventional thermal generator by RE such as wind and solar degrades the frequency control capability; second, the variability of wind and solar imposes more challenges on the frequency stability. The current unit commitment (UC) program in the industrial practice cannot fully provide frequency reserve requirement to maintain the satisfactory frequency performance and the frequency reserves are not fully compensated through the existing market scheme. In this paper, a security constrained unit commitment (SCUC) model with primary and secondary frequency reserve is proposed to co-optimize the energy and frequency reserve to provide satisfactory frequency performance. Post-contingency transmission constraints are enforced to account for the deliverability of the frequency reserve. The locational based reserve pricing is proposed to differentiate the compensating prices for reserves procured at various locations. A five-bus system and a 118-bus system are used to test the proposed model. Frequency dynamic simulation is also implemented to illustrate the frequency performance improvement based on the proposed method in terms of various frequency metrics.