Determination AGC capacity requirement and regulation strategies considering penalties of tie-line power flow deviations

In a competitive electricity market, AGC services are either contracted via negotiations between the market operator and generation companies concerned, or procured via a certain form of auction. A new framework to determine AGC capacity requirement and to deal with regulation strategies under uncertain demand in a competitive electricity market is presented in this paper. First, the stochastic characteristics of AGC services are analyzed. A stochastic optimization decision-making model for determining optimal AGC capacity requirement is then developed, followed by a pricing analysis which reveals that a trade-off between economic efficiency and system security must be made by the market operator. Finally an optimal AGC regulating algorithm is suggested. A numerical study is given to further demonstrate the essential features of the proposed model and method.