Renewable Energy Integration in Zonal Markets

In this paper, we investigate the impact of zonal network management in the operation of power systems with significant levels of renewable energy integration. Our study is inspired by the current state of the European energy market, and we focus on a case study of the Central Western European (CWE) system. First, we present a hierarchy of models that account for unit commitment, the separation of energy and reserves, and the simplified representation of transmission constraints in a zonal market, in order to examine the impact of these factors on efficiency in a regime of large-scale renewable energy integration. Second, we simulate operations of the CWE system under the zonal market design using a detailed instance that consists of 656 thermal generators, 679 nodes, and 1073 lines, with multiarea renewable energy production and 15-minute time resolution. Zonal market operations are compared against deterministic and stochastic unit commitment using high-performance computing in order to tackle the scale of the resulting models. We find that market design can have an influence on cost efficiency which far exceeds the benefits of stochastic unit commitment relative to deterministic unit commitment. We conduct a detailed analysis of the numerical results in order to explain the relative performance of the different models.