Evaluation on Economic Efficiency in Multi-area Power System with Wide Area Trading Market of Balancing Capacity

Abstract

Design of balancing market is being carried out in Japan as one of the power system reforming. Because of the wide area trading of balancing capacity, there is the margin on the tie lines, and the margin has influence on the empty capacity of the tie lines. When the margin is large, economic efficiency may decrease due to limitation of wide-area energy trading. So, it is important to discuss how much margin should be secured. In this paper, wide-area trading of balancing capacity was simulated by three-step Unit Commitment (UC). The results were used to evaluate the economic effects on the entire region. In addition, the margin setting of tie lines between regions was investigated for three cases, and the effect on economic efficiency was evaluated. As a result, it was shown that the wide-area trading of balancing capacity improves the economic efficiency of the entire region. And it was also indicated that regarding the margin of the tie lines between regions, it is economically better to set different margin in time, rather than set fixed margin in all time, according to the transactions of electric power.