Integrating interruptible IPP contracts in the probabilistic production simulation of power market systems

Assuring appropriate levels of reliability at the minimum possible cost using market-based approaches is a contemporary issue that is attracting much attention in deregulated power market systems. Introducing interruptible electricity contracts could provide a possible solution to such a problem. However, theoretical frameworks for examining the impact of these contractual arrangements on system operations have not been maturely developed. This paper presents a framework for modeling and evaluating an interruptible power supply contract for flexible independent power producers based on probabilistic production simulation. The interdependence between the pricing model of the interruptible IPP contract and the operations of the whole system is addressed and solved by an iterative coordinating algorithm. The probabilistic production simulation framework allows the uncertainties inherent in both the forced outages of generators and system load demand at the contract delivery time to be taken into account. The proposed approach is capable of achieving comprehensive evaluations and systematic pricing for the interruptible IPP contract. A numerical case study is presented to illustrate the validity of the methodology.