Analysis of Co-Optimization of Energy and Reserve Considering Reserves Cascading

This study investigates the impact of Reserve Cascading on electricity market efficiency, with a particular focus on energy prices, reserve prices, and total generation costs across scenarios defined by different reserve requirements. Reserve Cascading allows surplus higher-tier reserves to be reallocated to meet lower-tier demands, optimizing generator dispatch, reducing reliance on additional resources, and enhancing overall market stability. The analysis reveals that energy and reserve prices exhibit notable fluctuations depending on the reserve requirements of each scenario. Despite these price variations, Cascading consistently demonstrates its ability to lower total generation costs across all scenarios by minimizing generator dispatch needs and improving operational efficiency. The study highlights the value of integrating Cascading into electricity market design as a strategic tool to enhance economic efficiency and market reliability.