Real-Time Decision Making Energy Seminar

Optimal Reserve Procurement and the Price of Causality

Uncertainties from renewables and demands create power imbalances in real-time electricity markets. We study the problem of procuring reserve services in forward capacity markets from diverse resources to cover imbalance signals. We consider two scenarios: (a) the signal reveals itself causally, (b) the signal is revealed all at once by an oracle. Each case induces an optimal resource procurement cost. The ratio between the costs in these two cases is defined as the price of causality. We compute the price of causality for some special cases. The algorithmic basis for these computations is set containment linear programming.