A nodal regulation reserve pricing model for deregulated power systems

To improve reserve deliverability, independent system operators (ISOs) acquire reserve on a zonal basis to ensure the reserves are at least zonally distributed. Notwithstanding the ability for zonal approaches to improve the reserve location, such approaches are imprecise and do not guarantee reserve deliverability on a nodal basis. In order to satisfy operational requirements, unreliable market solutions require additional operator manual adjustments; such uneconomic adjustments are typically expensive and they can distort market price signals. This paper proposes an approach to acquire regulation reserve on a nodal basis. Analysis on the RTS-96 shows that modeling post nodal regulation reserve deployment constraints improve reserve deliverability, market efficiency, and price signals.