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dynamic_market_mechanisms_for_wind_energy

“Dynamic Market Mechanisms for Wind Energy”

Hamidreza Tavafoghi, University of Michigan

Wednesday, April 5, 2017 2:00 – 3:00PM EEB 248

Abstract: We investigate the problem of market mechanism design for wind energy integration into the power grid. We show that the current static two-settlement market structure is not efficient for the integration of wind energy, and does not provide appropriate information for scheduling of flexible loads/reserves. We consider a dynamic two-step model with strategic seller(s) with wind generation and one buyer, who trade energy through a mechanism determined by a designer (ISO). The seller has private information about his technology and wind condition, which he learns dynamically over time. We consider the existing (static) forward and real-time mechanisms that take place at times T = 1 and T = 2, respectively. We propose a dynamic mechanism that provides a coupling between the outcomes of the forward and real-time markets, and show that the dynamic mechanism outperforms the forward and real-time mechanisms for a general objective of the designer. We demonstrate that the advantages of our proposed dynamic mechanism come from the designer’s ability to price discriminate and the seller’s exposure to penalty risk. Moreover, our proposed mechanism reveals (probabilistic) information about wind generation in advance so as to schedule flexible loads/reserves efficiently. We further analyze variants of the dynamic mechanism that guarantee no penalty risk for sellers, and/or monitor the wind condition.

Bio: Hamidreza Tavafoghi is a Ph.D. candidate in the Electrical Engineering and Computer Science department at the University of Michigan working with Prof. Demosthenis Teneketzis, where he also pursues a M.A. in Economics. His research interests lie in stochastic control, game theory, mechanism design, and strategic learning. Currently, he is working on the design and analysis of informational and monetary incentive mechanisms for cyber-physical systems with applications to power systems, transportation networks, and security. Hamidreza received his B.Sc. in Electrical Engineering from Sharif University of Technology, Tehran, Iran, 2011, and his M.Sc. in Electrical Engineering: Systems from the University of Michigan, 2013. He was awarded the Dow Sustainability Fellowship in 2015. He is a Silver medalist of 37th International Physics Olympiad, Singapore, 2006, and a Gold medalist of 18th National Physics Olympiad, Iran, 2005.​

dynamic_market_mechanisms_for_wind_energy.txt · Last modified: 2017/04/03 12:22 by ashutosh_nayyar