The eco-min model

In existing electric energy markets, the bidding structure for the bid curves do not reflect the true operating characteristics of the generator. Often, the true minimum operating level of the generators is below the minimum level represented in bidding curves submitted by generator owners to the ISOs. One of the major factors for this inconsistent representation is attributed to operational efficiency. This paper introduces a new model called the eco-min model, which discusses the possibility of modifying the existing bid curve structure. The benefits of this model include improved market efficiency combined with the capability to obtain more reserve from the existing, committed resources as compared to the existing bid curve structure. The percentage of total electric energy coming from renewable resources is increasing day by day. Thus, the amount of reserve required for running the power systems reliably has increased as well because of the inherent variable and uncertain nature of renewable resources, e.g., wind and solar. As a result, there is the challenge of increasing the procured ancillary services while maintaining market efficiency. This model provides an effective approach for this issue. The eco-min model is presented and results are provided corresponding to the RTS96 system.