A New Risk Assessment and Management Paradigm (NewRAMP) in Electricity Markets
Project Innovation + Advantages:
The proposed work offers a New Risk Assessment and Management Paradigm (NewRAMP). NewRAMP develops innovative approaches for quantifying the risk of individual assets based on their performance and ability to deliver on their assumed obligations. NewRAMP translates this risk to the system level to increase the efficiency of power system operation and planning in the presence of extensive market participation by “risky” assets. NewRAMP synthesizes ideas and theories from finance and insurance, operations research, power system engineering, and electricity market design into methodologies incorporating a risk-driven paradigm to achieve higher adoption of renewable resources and more efficient and reliable system operation. The proposed work will provide proof of concept that NewRAMP can manage system and individual asset risk in a manner far superior to current practice, as measured on metrics applied to the Southwest Power Pool (SPP) territory.
PERFORM projects will design methods and risk scores to clearly communicate the physical delivery risk of an energy asset’s offer and design grid management systems that organically capture uncertainty. These management systems will evaluate and hedge the system risk position to meet or exceed a baseline system risk index. This pursuit will achieve the following area impacts: