Project Will Use Realistic Market Simulation Model To
Efficiently Integrate New Technologies
VALLEY
FORGE, Pa., April 30,
2024 /PRNewswire/ -- A collaborative project
among PJM Interconnection, Penn State
and ISO New England has won funding from a U.S. Department of
Energy program designed to develop and improve wholesale
electricity markets.
Following its first round of funding, the Wholesale Market
Studies and Engagements Program (WMSE) has announced six recipients
that will share more than $10
million.
Penn State was awarded up to
$815,959 in a three-year grant to
identify market design changes to efficiently integrate batteries
and other nontraditional resources that operate with changing
real-time constraints on a grid that is experiencing more
uncertainty in electricity demand, or load. The project will use a
realistic market simulation model with PJM and ISO-NE to achieve
the best performance across the objectives of reliability,
efficiency and investment incentives.
"We look forward to collaborating with Penn
State and ISO New England on this important program," said
Stu Bresler, PJM Executive Vice
President – Market Services and Strategy. "This is the exact work
needed to enhance the reliability of the grid amid an evolving
resource mix."
The changing resource mix is increasing the variability of load
and generation, leading to both larger and more frequent changes in
electricity demand and to increased forecast error. At the same
time, the growing contributions from battery energy storage units
must be managed in real time to efficiently use their limited
energy and meet their charging schedule.
"The current operational structure, which is designed to respond
instantly in five-minute increments, now must also think 12 hours
ahead," said Mort Webster, Professor
of Energy Engineering at Penn State and
principal investigator, who will be working with the grid
operators. "This is high-priority concern among regional
transmission organizations like PJM and ISO-NE."
"Innovative ideas and collaboration are vital to a successful
clean energy transition," said Matthew
White, Vice President, Market Development and Settlements,
and Chief Economist at ISO New England. "ISO New England is proud
to partner with Penn State and our
colleagues at PJM on this exciting project."
In the past, the mostly thermal generation-dominated grid
functioned well under market designs that dispatched each interval
without regard to subsequent periods and managed uncertainty with
simple reserve product designs.
Creating more flexible and efficient markets will not only
ensure a reliable supply of electricity, but also help keep costs
competitive for consumers.
PJM's project addresses two related questions:
- What is an optimal portfolio design of multiple reserve
products on different timescales that can manage the increasing
variability and uncertainty throughout the operating day from load
and renewable generation?
- How should day-ahead and real-time markets be structured to
efficiently utilize batteries and other resources with binding
constraints under net load uncertainty that changes throughout the
day?
The other five projects cover Southwest Power Pool, California
Independent System Operator and New York Independent System
Operator (NYISO) markets as well as non-market areas, such as the
Western Interconnection.
PJM Interconnection, founded in 1927, ensures the reliability
of the high-voltage electric power system serving 65 million people
in all or parts of Delaware,
Illinois, Indiana, Kentucky, Maryland, Michigan, New
Jersey, North Carolina,
Ohio, Pennsylvania, Tennessee, Virginia, West
Virginia and the District of
Columbia. PJM coordinates and directs the operation of the
region's transmission grid, which includes 88,115 miles of
transmission lines; administers a competitive wholesale electricity
market; and plans regional transmission expansion improvements to
maintain grid reliability and relieve congestion. PJM's regional
grid and market operations produce annual savings of $3.2 billion to $4 billion. For the
latest news about PJM, visit PJM Inside Lines at
insidelines.pjm.com.
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SOURCE PJM Interconnection