Emerging Electricity Markets: Including New Energy Storage Technologies & Integrating DERs via ISO-DSO Coordination

Abstract

Most countries have set a vision of net-zero Greenhouse Gas (GHG) emissions by 2050; however, based on current trends, many of them are lagging in meeting the targets, even for 2025. Energy transition, shifting from fossil-fuel based to clean resources, is a critical step toward achieving Net-Zero Emission (NZE) targets, and is being explored worldwide. The ongoing effort to support the transition to a decarbonized system is to deploy large-scale Renewable Energy Sources (RES); but even after the remarkable increase in deployment of RES, it still seems impossible to achieve decarbonization targets. Various countries, including Canada, have pledged to achieve NZE grid by 2035 and system operators have developed their decarbonization pathways with target objectives and timelines to attain this goal. In this context, green hydrogen-based systems emerge as a potential zero-carbon solution to meet the CO2 emission reduction targets. The electricity sector is recognized as vital for energy sector transformation, in order to achieve NZE goals, as there are already low and emission free resources in this sector such as RES, hydro, etc., and it can easily integrate with other sectors (heat, transport, etc.) as part of the electrification drive. The continuously growing demand for electricity is a challenge to energy security, grid resiliency and results in exorbitant energy prices during peak demand periods. The intermittent nature of RES imposes limits on their use and their variability leads to imbalances between the grid demand and supply. To meet these challenges, the power system requires flexible resources, for which, various alternatives have been proposed including Distributed Energy Resources (DERs), Demand Response (DR) and Energy Storage Systems (ESSs), which seem to be the most promising ones. Also, there have been remarkable advancements in the arena of smart grid, which encourages consumers to deploy DERs and re-profile themselves as prosumers. Different regulating bodies and utilities worldwide are re-organizing their electricity markets to be future-ready with high-DER vision, and are developing coordination models between the Independent System Operator (ISO) and Distribution System Operators (DSOs) to integrate DERs and realize their true potential for the whole system (transmission and distribution). This thesis first presents a novel, Green Hydrogen Systems (GHSs) integrated, Uniform Marginal Price (UMP)-based Day-Ahead Market (DAM) framework and the mathematical model for electricity market auction. The wholesale electricity market participation of GHSs, comprising electrolyzers, storage tanks and fuel cells, is examined considering their bids and offers for charging and discharging modes, respectively. To support transition toward achieving an NZE grid, the effects of inclusion of GHS in the DAM with different emission control strategies, such as emission cap and carbon pricing are examined. Two real systems with distinct characteristics, Alberta and Ontario provinces of Canada, are considered. Subsequently, this thesis presents an extension of the GHS integrated UMP-based market model to Hydrogen-based Emission Free Resources (HEFRs) included Locational Marginal Price (LMP)-based DAM model by formulating appropriate mathematical model, complying with the existing market rules. Comprehensive case studies and sensitivity analysis are carried out to examine the impact of integration of HEFRs on market settlement, marginal prices and system emissions during normal, congestion and under RES uncertainties scenarios. Next, this thesis presents a novel framework with new mathematical models that integrate DR and Battery Energy Storage Systems (BESSs) simultaneously in an LMP-based Multi-Settlement Market (MSM), i.e. a coordinated DAM and Real-Time Market (RTM). A new set of generator ramping constraints, developed from the DAM settlement, and referred to as Day-Ahead Load-Following (DALF) Ramp, are included in the RTM auction model. The performance of the mathematical models are tested on the IEEE 24-bus Reliability Test System (RTS) by carrying out various case studies and scenarios, uncertainty and sensitivity analyses. Effect of DR and BESS characteristics such as level of participation, initial State-of-Charge (SOC), discharge rate, etc. on market settlement is examined. The results demonstrate the merits of the proposed framework, and the impact of the DALF Ramp, DR and BESS inclusion in the MSM auction models on marginal prices, market settlement and system operation. Finally, the thesis presents a new Cooperation Algorithm and a parallel-hierarchical framework for coupling the wholesale and retail electricity markets in order to facilitate the participation of DERs including small-capacity Behind-the-meter DERs (BTM-DERs), in a competitive and equitable manner. The detailed mathematical models of ISO-DSOs coordinated, wholesale and retail market settlements for day-ahead period are developed. The models are tested on the IEEE 24-bus RTS (wholesale market) and multiple 33-bus distribution systems (retail markets). Results demonstrate the effectiveness of the proposed framework over a centralized wholesale market in terms of computational time and over the sequential structure, in terms of DERs’ increased participation, reduced market prices, congestion management, emissions reduction and overall system operation.