Risk assessment of transmission network failures in a single-price electricity market using conjectural-variation equilibrium

Abstract

Risk assessment is a key aspect in power systems' design and planning. Under the new competitive framework of the electricity sector, power systems are found to be more and more strained and operated near their technical limits. On the economic front, problems arising due to transmission lines' limited capacities and reduced reliability becomes an obstacle to perfect competition among the market participants, and negatively a ect the electricity market prices. Under these scenarios, it is crucial for the system operator (SO) to have tools that allow the correct assessment of the impact of network failures on the total system's running costs. In this work, we propose a novel risk assessment method that aims to assist the SO in evaluating these costs under di erent line failure scenarios. The risk is quanti ed in a single-price market not only in terms of the ENS cost, but also in terms of the so called correction costs arising due to the necessity of correcting the dispatch in case of a line failure. The latter takes into account the e ect of exercise of market power by the generation companies (GenCos) if they can anticipate that such failure would occur. The study is conducted on the IEEE 6-bus Reliability Test System (RBTS) by solving a bi-level model consisting of a conjectural-variation equilibrium model, and a DC optimal power ow model. The results shown to o er a guideline for the SO to identify the critical network lines by means of a classi cation of which line's vulnerability contribute higher costs for the network.