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Optimal Response of a Power Generator to Energy, AGC, and Reserve Pool-Based Markets

The electric power industry all over the world is undertaking major regulatory and operational changes. The understanding of power supply as a public service is being replaced by the notion that competitive markets constitute a more appropriate framework to supply reliable and cheap electric energy to consumers. As mandated by FERC orders 888 and 889, this paper considers simultaneously energy, AGC, and reserve markets in a pool framework. It provides a tool to enable a power generator to determine optimally its degree of involvement in each one of these markets. A real-world case study is analyzed and results are presented.