Conversion of Balancing Energy Offers from Generating, Demand Response and Energy Storage Resources

This paper proposes a method for the conversion of balancing energy offers from generating, demand response and energy storage resources of European central-dispatch systems into Replacement Reserve (RR) standard products. The aim is the integration of the balancing market of central-dispatch systems, where resource operating constraints lie in the responsibility of the TSO, with the pan-European balancing market mainly characterized by self-dispatch arrangements. To respect the diversified rules of both systems, we propose a break-down of the RR clearing problem into four distinct steps: an RR Quantity Maximization Process, a Mandatory Activation Process, a Conversion Process, and the economic RR Clearing. Three modeling approaches are constructed, the attained solution of which is compared with the one-shot techno-economic clearing benchmark currently applied in central-dispatch systems. The comparison indicates that the break-down and the benchmark results coincide, achieving identical social welfare and final dispatch, while additionally allowing less-costly cross-border activations of RR.