Energy market transparency: analyzing the impacts of constraint relaxation and out-of-market correction practices in electric energy markets
This work presents research on practices in the day-ahead electric energy market, including replication practices and reliability coordinators used by some market operators to demonstrate the impact these practices have on market outcomes. The practice of constraint relaxations similar to those an Independent System Operator (ISO) might perform in day-ahead market models is implemented. The benefits of these practices are well understood by the industry; however, the implications these practices have on market outcomes and system security have not been thoroughly investigated. By solving a day-ahead market model with and without select constraint relaxations and comparing the resulting market outcomes and possible effects on system security, the effect of these constraint relaxation practices is demonstrated.
Proposed market solutions are often infeasible because constraint relaxation practices and approximations that are incorporated into market models. Therefore, the dispatch solution must be corrected to ensure its feasibility. The practice of correcting the proposed dispatch solution after the market is solved is known as out-of-market corrections (OMCs), defined as any action an operator takes that modifies a proposed day-ahead dispatch solution to ensure operating and reliability requirements. The way in which OMCs affect market outcomes is illustrated through the use of different corrective procedures. The objective of the work presented is to demonstrate the implications of these industry practices and assess the impact these practices have on market outcomes.