Multi-Stage Optimization and Its Impact on Electricity Market

Integrating high levels of renewable energy in the electricity system is attracting interest in probabilistic optimization methods to deal with uncertainty in the balancing process. These advanced optimization techniques include stochastic and robust optimization, look-ahead economic dispatch, hybrid methods for ancillary services, and new techniques for security optimization. However, where and how we should implement such techniques as well as its impacts needs to be addressed. Implementing multi-stage optimization problem affects both market and system operations. From a market perspective, issues include how multi-stage optimization can be related to market clearing, pricing determination, and settlements for energy and ancillary services, to improve system robustness and flexibility as well as market efficiency and transparency. Questions such as 1) how to scale stochastic and robust optimization models from research models to full-sized operational models, 2) how to define the day-ahead market (DAM) price when stochastic programming is adopted in DAM, 3) what information needs to be communicated to the market participants to achieve incentive compatibility, and 4) how deviations from the DAM should be settled and at what price, deserve a thorough investigation. This panel will bring academic and industry experts together to focus on the following areas: ? Existing practice in the industry and approaches under development ? Recent advances in operation models and the underlying economics ? New market design concepts using multi-stage decision making ? Potential market impact