Quantifying the effect of natural gas price uncertainty on economic dispatch cost uncertainty

The growing share of electricity production from natural gas combined with the scarcity of firm contracts for fuel procurement creates vulnerability when gas supplies are tight. To examine the effects of uncertainty in the natural gas spot price on the dispatch cost, we formulate a model of economic dispatch that accounts for limits on fixed price gas availability from contracts. Probability distributions of the hourly electric load and a daily natural gas spot price are generated using a temporal and weather conditional epi-spline based load prediction method and the kernel density estimation method, respectively. Monte Carlo simulations are conducted with randomly generated electric load variates both with and without uncertainty in the gas spot prices, to generate the corresponding dispatch cost probability distributions and quantify the effects of gas price uncertainty using the mass transportation distance. The proposed method is tested on a 24-bus power system with a 20-node gas system.