Managing uncertainties in multi-market environment: A risk-related approach

The increasingly complex multi-market environment has bring more uncertainties to modern power system operation. These uncertainties mainly come from price volatilities in different markets and lead to unexpected risk of profit losses. This paper applies the concept of risk management in financial areas to power system OPF model. A comprehensive representation of risk component is introduced taking account of not only price fluctuation in each individual market, but also the interconnections of prices between different markets. The simulation results determine how this approach will affect system generation scheduling to minimize generation cost and risk level simultaneously.