Performance-based Energy Resource Feedback, Optimization, and Risk Management
Optimal utilization of all grid assets requires a fundamental shift in grid management rooted in an understanding of asset risk and system risk. Existing management practices were designed for a grid consisting of and fully reliant on conventional generation assets. Present operational and planning practices do not acknowledge or leverage the true capabilities and associated challenges of emerging assets. A novel risk-driven paradigm will allow emerging assets to be trusted and relied upon to provide the critical products and services necessary to maintain an efficient and reliable grid, thereby breaking the persistent reliance on conventional generation technologies.
PERFORM seeks to develop innovative management systems that represent the relative delivery risk of each asset and balance the collective risk of all assets across the grid. A risk-driven paradigm allows operators to: (i) fully understand the true likelihood of maintaining a supply-demand balance and system reliability, (ii) optimally manage the system, and (iii) assess the true value of essential reliability services. This paradigm shift is critical for all power systems and is essential for grids with high levels of stochastic resources. Projects will propose methods to quantify and manage risk at the asset level and at the system level.
Affordable and reliable electricity is a fundamental component for any advanced society. There is a strong correlation of a country’s gross domestic product (GDP) with its electric energy consumption. And the pursuit to electrify energy services for transportation, buildings, and various industrial sectors only adds to the importance of the electric power sector.
Today’s grid relies on conventional, bulk power plants to provide the essential flexibility to operate power systems reliably. These assets are dispatchable and can guarantee their available capacity, except in rare events. The existing risk management strategy is to protect against those rare events: the sudden loss of a single bulk asset. Existing risk management practices align well with conventional technologies but must be reassessed due to the impending dramatic shift in resource mix, including the increase in intermittent renewable resources and storage technologies. As emerging technologies are increasingly deployed, management systems must evolve to leverage all capabilities of these emerging assets to maintain an economical and reliable grid.
PERFORM projects will design a risk score that clearly communicates the physical delivery risk of an asset’s offer and design grid management systems that endogenously capture uncertainty and evaluate and hedge the system risk position to meet or exceed a baseline system risk index. This pursuit will achieve the following area impacts.
Optimal utilization of renewable and clean resources for all grid services: (i) improves grid reliability, (ii) reduces energy imports, and (iii) provides a sustainable path to energy independence.
When low- or zero-emission assets provide all grid products and services, grid operations are no longer reliant on legacy, carbon-heavy centralized generation assets, which enables the grid to absorb more clean resources.
Modernization of risk management practices is a viable and cost-effective way to reduce costs to consumers while achieving a clean and sustainable electric power sector. Novel risk management strategies will also enhance the value proposition of emerging technologies, including renewable resources and storage. This pursuit merges risk techniques of the electric power sector with the finance and actuarial science communities, thereby enabling further economic growth and opportunities as well as redefining the future role of electric power sector entities.
• Castalune - Predicting Events to Enable Robust Renewable Grids
• Columbia University - Risk-Aware Power System Control, Dispatch and Market Incentives
• Duke University - Grid that’s Risk-Aware for Clean Electricity - GRACE
• E3 - Deploying E3’s RESERVE Tool to Enable Advanced Operation of Clean Grids
• Energy Trading Analytics - Stochastic Market Auction Redesigned Trading System (SMARTS)
• Georgia Tech Research Corporation - Risk-Aware Market Clearing for Power Systems (RAMC)
• Lehigh University - Application of Banking Scoring and Rating for Coherent Risk Measures in Electricity Systems
• National Renewable Energy Laboratory (NREL) - An Integrated Paradigm for the Management of Delivery Risk in Electricity Markets: From Batteries to Insurance and Beyond
• Princeton University - Stochastic Models, Indices & Optimization Algorithms for Pricing & Hedging Reliability Risks in Modern Power Grids
• Rensselaer Polytechnic Institute (RPI) - Risk segmentation and Portfolio Analysis for Pareto Dominance in High Renewable Penetration and Storage Reserves
• Tabors Caramanis Rudkevich (TCR) - Stochastic Nodal Adequacy Platform (SNAP)