A linked swing contract market design with high renewable penetration and battery firming

As renewable generation and energy storage systems become increasingly cost-effective, modern power systems are increasingly reliant on variable energy resources (VERs) to meet demand. However, the variability and uncertainty of VERs' generation require additional flexibility to mitigate their impacts. Unfortunately, the current power market designs rigidly define different power and reserve products, making it difficult to fully recognize and compensate for this flexibility. Furthermore, since the marginal operating costs of the system quickly approach zero, current marginal cost-based market mechanisms struggle to provide price signals that allow independent power producers to make informed decisions about constructing, operating, and retiring plants. To address these issues, this article proposes a new linked electricity market design based on swing contracts for operating power systems with high penetration of VERs and energy storage resources. The feasibility of the proposed approach is demonstrated through study results on the modified IEEE 118-bus test system.