A Generation-Interval-Based Mechanism for Managing the Power Generation Uncertainties of Variable Generation

Power generation uncertainty is an important characteristic of variable generation (VG) platforms, such as wind and solar power, which brings additional operational costs to the power systems. To manage this uncertainty, responsibilities should be properly allocated to encourage good behaviors of system participants, especially the VG producers. Currently, the imbalance-cost-based mechanism is most commonly used for uncertainty management. Based on this method, we consider a new mechanism in this paper for capturing the uncertainty, which may achieve a better mechanism performance. The basic idea is to allow producers to purchase generation intervals (GIs) for their potential production output. The analysis presented in this paper indicates that producers can be very responsive to this mechanism. With the proper pricing policies, producers can be encouraged to provide additional information on upcoming uncertainties to the system operators. Additionally, three strategies for pricing GIs are included in this paper. Case studies are used to demonstrate the application of the mechanism as well as its effectiveness.