Analysis of Operating Reserve Demand Curves in Power System Operations in the Presence of Variable Generation

The electric power industry landscape is continually evolving. As emerging technologies such as wind and solar generating systems become more cost effective, traditional power system operating strategies will need to be re-evaluated. The presence of wind and solar generation (commonly referred to as variable generation or VG) can increase variability and uncertainty in the net-load profile. One mechanism to mitigate this issue is to schedule and dispatch additional operating reserves. These operating reserves aim to ensure that there is enough capacity online in the system to account for the increased variability and uncertainty occurring at finer temporal resolutions. A new operating reserve strategy, referred to as flexibility reserve, has been introduced in some regions. A similar implementation is explored in this study, and its implications on power system operations are analysed. Results show that flexibility reserve products can improve economic metrics, particularly in significantly reducing the number of scarcity pricing events, with minimal impacts on reliability metrics and production costs. The production costs increased due to increased VG curtailment - i.e. including the flexible ramping product in the commitment of excess thermal capacity that needed to remain online at the expense of VG output.