A spot market design for 100% renewable energy penetration based on two-stage stochastic model

As the installed capacity of renewable energy continues to rise, the share of renewable energy in the power supply has increased from 53% in the past to 72% today. A new power system entirely reliant on renewable energy sources is now a foreseeable reality. Due to the large-scale grid connection of renewable energy sources (RES) with near to zero marginal cost, the price signal is missing. The inherent uncertainty and volatility of new energy also bring great challenges to the operation of the power grid system. In order to solve the above bottleneck, this paper proposes a power spot market mechanism that includes renewable energy 100% based on two-stage stochastic optimization. In the Day-Ahead (here-and-now) stage, renewable energy generators and energy storage are jointly optimized to mitigate volatility and improve operational efficiency. The second stage (wait-and-see) represents the Real-Time energy balance market, where the uncertainty of RES characterized by representative scenarios, is addressed by flexible gas units responsible for energy adjustment and balancing. To provide a more accurate calculation of system operating costs and generate crucial price signals for day-ahead market operations, both the capital costs of renewable energy generators and the energy loss costs of energy storage operations are incorporated into the overall cost structure. Th e proposed model's effectiveness is validated using simulations on the IEEE 24-node system.