Limited Energy Resource Optimization in the Electricity Market

The Polar Vortex of winter 2013/2014 highlighted issues that can occur when generators can only indirectly manage their limited fuel supplies using the standard bidding and optimization processes available in the wholesale electricity markets. The goal of this paper is to present a practical and efficient model for generation resources to manage limited fuel supply in the NYISO's day-ahead SCUC process. Two new market designs are introduced namely (1) the Total Energy Curve, which adds an energy output (MWh) constraint; and (2) the Fuel Cost and Efficiency Curve, which adds a fuel input (e.g. MMBtu of fossil fuel or cubic feet of water) constraint. By explicitly presenting these inter-temporal constraints into the optimization, the SCUC process can optimally align resource dispatch with system needs over the 24-hour optimization horizon; potentially maximizing the utilization of LER while simultaneously lowering the overall system societal cost. Case studies were developed to evaluate the practicality and efficiency of the new algorithms.