Understanding Convergence Bids During Blackouts: Analytical Results and Real-World Implications

This paper, for the first time, investigates the operation and impact of convergence bids (CBs) during
blackouts
. First, the amount of load shedding in the real-time market (RTM) is modeled as a
function
of the amount of the cleared CBs in the day-ahead market (DAM). The sign of the slope of this function is proposed as a metric to determine if a CB
exacerbates
or
heals
the power outages. Next, a series of mathematical theorems are developed to characterize this new metric under different network conditions. It is proved that, when there is
no
congestion in the DAM, the metric is always greater than or equal to zero. When there
is
congestion in the DAM, the metric can be positive or negative. Using numerical case studies, we show that, this metric in fact most often is positive. Therefore, supply CBs almost always hurt the system during blackouts while demand CBs almost always help the system. Furthermore, the impact of load shedding on the profit of CBs is also analyzed. It is shown that, load shedding usually creates advantage for supply CBs and disadvantage for demand CBs in their profit. The implications of these results are discussed. We also analyze the real-world market data from the California Independent System Operator (ISO) during the blackouts in August 2020. It is shown that, the decision by the California ISO to suspend CBs during this event matches the mathematical and numerical results in this paper.