Decentralized Day-ahead Market Clearing in Multi-area Interconnected Electricity Market with Variable Wind Generation

With high penetration wind power integration and development of regional electricity market, the day-ahead market clearing of multi-area interconnected power systems became a main concern. This paper builds a decentralized day-ahead market clearing model considering wind power uncertainty, which is solved by the analytical target cascading (ATC) method. In this model, the master problem, i.e., upper coordinator, is responsible for coordinating tie-line scheduling among areas, and the independent system operators (ISOs) of each regional electricity market solve its own sub-problem of market clearing, and the spinning reserve is used to handle wind power uncertainty. These sub-problems give optimal day-ahead schemes and locational marginal prices (LMPs) by minimizing the total operation cost. Through joint energy and reserve clearing, the impact of wind power uncertainty on the operation of the system is reduced. In addition, this method only requires limited information sharing to protect the privacy information of each area.