a survey of frequency and voltage control ancillary services part i technical features this two part paper surveys the frequency and voltage control ancillary services in power systems from various parts of the world in this second part essential economic features that must be taken into account when designing markets for ancillary services are first discussed the methods adopted in eight different systems australia france germany great britain new zealand pjm spain and sweden for trading frequency and voltage control ancillary services are then compared lastly new indicators for comparing volumes and costs of ancillary services across systems are proposed and calculated for the systems included in this survey the companion paper surveys the technical features of these ancillary services

market clearing with stochastic security part i formulation the first of this two paper series formulates a stochastic security constrained multi period electricity market clearing problem with unit commitment the stochastic security criterion accounts for a pre selected set of random generator and line outages with known historical failure rates and involuntary load shedding as optimization variables unlike the classical deterministic reserve constrained unit commitment here the reserve services are determined by economically penalizing the operation of the market by the expected load not served the proposed formulation is a stochastic programming problem that optimizes concurrently with the pre contingency social welfare the expected operating costs associated with the deployment of the reserves following the contingencies this stochastic programming formulation is solved in the second companion paper using mixed integer linear programming methods two cases are presented a small transmission constrained three bus network scheduled over a horizon of four hours and the ieee reliability test system scheduled over 24 h the impact on the resulting generation and reserve schedules of transmission constraints and generation ramp limits of demand side reserve of the value of load not served and of the constitution of the pre selected set of contingencies are assessed

stochastic modelling of renewable energy sources from operators point of view a survey abstract high penetration of renewable energy sources especially weather dependent sources has increased the power systems uncertainties for any analysis in power systems such as planning and operation it is essential to confront the stochastic nature of these sources in order to get much more precise results since operators need proper strategies and methods to decline negative effects of the stochastic behaviour of renewable power generators such as total operation cost growth this paper provides a review of different state of the art approaches from the operator s viewpoint for handling the stochastic behaviour of renewable sources hence in this paper three different strategies are categorized for stochastic analysis of these sources the first strategy is mathematical modelling including stochastic dependency and independency multi dimensional dependence forecast and scenarios afterwards demand side management which is one of the other approaches for dealing with these uncertainties is investigated and different demand response programs and some methods to model them are presented finally the effect of different electricity market schemes and relevant optimization methods to mitigate the variations of renewable energy sources are discussed the study demonstrates that an operator should choose one or a combination of these three approaches based on its requirements

stochastic security for operations planning with significant wind power generation in their attempt to cut down on greenhouse gas emissions from electricity generation several countries are committed to install wind power generation up to and beyond the 10 20 penetration mark however the large scale integration of wind power represents a challenge for power system operations planning because wind power 1 cannot be dispatched in the classical sense and 2 its output varies as weather conditions change this warrants the investigation of alternative short term power system operations planning methods capable of better coping with the nature of wind generation while maintaining or even improving the current reliability and economic performance of power systems to this end this paper formulates a short term forward electricity market clearing problem with stochastic security capable of accounting for nondispatchable and variable wind power generation sources the principal benefit of this stochastic operation planning approach is that when compared to a deterministic worst case scenario planning philosophy it allows greater wind power penetration without sacrificing security

inference in models with adaptive learning abstract identification of structural parameters in models with adaptive learning can be weak causing standard inference procedures to become unreliable learning also induces persistent dynamics and this makes the distribution of estimators and test statistics non standard valid inference can be conducted using the anderson rubin statistic with appropriate choice of instruments application of this method to a typical new keynesian sticky price model with perpetual learning demonstrates its usefulness in practice

corporate economic power and the state a longitudinal assessment of two explanations much has been written about the relationship between the economic resources of corporations and their ability to control politics in advanced capitalist democracies the resource that has received the most attention is economic concentration but there is little agreement about the precise form of concentration that matters in an attempt to find the most useful image of the state this study looks at the connection between the aggregate concentration of assets among the leading manufacturing firms as well as the rate of business investment and taxes on business time series regressions computed on u s national level data show that theories of the state that emphasize the independet activities of private investors are not supported instead the aggrgate concentration of assets as measured by the share of assets held by the leading 100 firms has a strong negative influence on effective corporate tax rates these results are consistent with the theory that heightened aggregate concentration helps corpor

political business cycles 40 years after nordhaus the aim of this article is to survey the huge literature that has emerged in the last four decades following nordhaus s rev econ stud 42 2 169 190 1975 publication on political business cycles pbcs i first propose some developments in history of thought to examine the context in which this ground breaking contribution saw the light of the day i also present a simplified version of nordhaus s model to highlight his key results i detail some early critiques of this model and the fields of investigations to which they gave birth i then focus on the institutional context and examine its influence on pbcs the actual research agenda finally i derive some paths for future research

intraday trading of wind energy in this paper we tackle the problem of a wind power producer participating in a short term electricity market that allows for the continuous but potentially illiquid intraday trading of energy considering the realistic case of a wind farm operating in the western danish price area of nord pool we build a simple but effective algorithm for the wind power producer to fully benefit from the elbas intraday market we then investigate the sensitivity of the obtained benefits to the maximum volume of energy the wind power producer is willing to trade in the intraday market the ultimate aim of the trade either to decrease energy imbalances or to increase profits and to the installed capacity of the wind farm our numerical results reveal that the wind power producer can substantially increase his revenues by partaking in the intraday market but with diminishing returns to scale a result that we attribute to the low liquidity of elbas

assessing the competitiveness of demand side bidding demand side bidding dsb provides a very flexible way of meeting the peak load in a production schedule this paper demonstrates that in a competitive electricity pool dsb and other forms of flexible generation can cause sharp and unwarranted price increases if the production schedule is established on the basis of a minimization of the total production cost furthermore the competitiveness of dsb is artificially inflated if the load recovery periods which accompany these load reductions are not taken into consideration by the scheduling program it is argued that the actual value of dsb should be re examined in the light of these findings

uncertainty management in the unit commitment problem uncertainty in power systems operations has been traditionally managed by multistage decision making and operating reserve requirements a familiar example of multistage decisions is day ahead unit commitment and real time economic dispatch an alternate approach for managing uncertainty is a stochastic formulation which allows the explicit modeling of the sources of uncertainty this paper compares stochastic and reserve methods and evaluates the benefits of a combined approach for the efficient management of uncertainty in the unit commitment problem numerical studies show that unit commitment solutions obtained for the combined approach are robust and superior with respect to the traditional approach in terms of both economics and reliability metrics

models of military expenditure a brief review of the extensive empirical literature devoted to explaining levels of military expenditure indicates a wide variety of unreconciled results however comparing the alternative models is not straightforward this paper uses british post war military expenditures to illustrate some of the methodological issues involved in model comparison evaluation and selection starting from two published models for the uk a systematic specification search leads to a new model which dominates alternative specifications passes a wide range of misspecification tests and also fits well to french data

modeling load recovery impact for demand response applications in this paper we develop a novel mathematical model to describe the localized economic impact of load recovery by electricity consumers following demand response dr event participation in this model termed securitization cost and benefit associated with an amount of load recovery change exponentially with time varying stochastic discount rates these volatile rates which can be estimated using the principle of brownian motion are further examined via case studies on the roy billinton test system a formal application of the proposed recovery model to the crucial task of global dr scheduling is then studied the study indicates that it is possible to optimize a dr schedule to cater for uncertainty in the subsequent load recovery

state and state expenditure determinants of social investment and social consumption spending in the postwar united states the conventional logic of industrialization thesis holds that escalations in public expenditures are a response to industrial maturation and attendant sociocultural and demographic transformations with a neutral state arbitrating differing needs via the electoral aggregation of citizen preferences to promote the general welfare the present research develops an alternative conception of the liberal capitalist state and state expenditure policy fiscal policy is portrayed as a highly politicized vehicle by which the state attempts to insure private accumulation placate and encourage competing classes and factions and acquiesce to or rebuff demands by mass insurgents all within the context of a tenuously legitimate electoral system and a fragile social order a time series regression analysis of the determinants of social investment and social consumption spending is undertaken for the u s over the 1949 77 period results suggest that the development perspective is seriously flawed as fluctuations in these expenditures reflect an inherently politicized budgetary process whereby the complex interplay of a variety of structural economic and partisan political forces are determinant

european electricity market integration with mixed market designs part ii solution algorithm and case studies this paper presents the solution algorithm and test results of the market splitting approach proposed in the first part of this two paper series for the clearing of the forthcoming internal electricity market the market splitting approach is implemented in a europe wide level indicatively defining three power pools and 22 power exchanges comprising 42 bidding areas in total with each local national market respecting the standard market regulatory framework of power pools and power exchanges pxs the performance and computational requirements of this implementation is presented the model is tested in terms of problem solvability to its limits considering a day ahead market clearing time threshold equal to one hour the results demonstrate that a viable solution to the clearing of the internal electricity market can be attained with the current state of the art of computers processing power further discussion is made concerning the viability of the proposed approach and other harmonization issues that should be considered for successful market integration

discussion of scheduling of spinning reserve considering customer choice on reliability the authors proposed a market model in which the energy and spinning reserve are cleared sequentially the experience has shown that this kind of market model can lead to quite undesirable situations such as price reversal problem the case of the pre 2001 california electricity market is the best example moreover by using sequential market clearing enough capacity may not be brought into the reserve market as a result post clearing market ad hoc manipulations would be required to turn on enough extra units to meet reliability targets lastly ignoring the coupling that exists between the energy and the reserve scheduling can lead to suboptimal or infeasible results

optimal response of a power generator to energy agc and reserve pool based markets the electric power industry all over the world is undertaking major regulatory and operational changes the understanding of power supply as a public service is being replaced by the notion that competitive markets constitute a more appropriate framework to supply reliable and cheap electric energy to consumers as mandated by ferc orders 888 and 889 this paper considers simultaneously energy agc and reserve markets in a pool framework it provides a tool to enable a power generator to determine optimally its degree of involvement in each one of these markets a real world case study is analyzed and results are presented

risk constrained self scheduling of hydro wind units for short term electricity markets considering intermittency and uncertainty abstract in view of the intermittency and uncertainty associated with both the electricity production sector of restructured power system and their competitive markets it is necessary to develop an appropriate risk managing scheme so that it is desirable to trade off between optimum utilization of intermittent generation resources i e renewable energy resources uncertain market prices and related risks in order to maximize participants benefits and minimize the corresponding risks in the multi product market environment the main goal of this paper is to investigate risk management by introducing a novel multi risk index to quantify expected downside risk edr which is caused by both the wind power and market price uncertainties value at risk var method is used to assess the mentioned risk issue by the proposed weighted edr so that an optimal trade off between the profit and risk is made for the system operations also the roulette wheel mechanism is employed for random market price scenario generation wherein the stochastic procedure is converted into its respective deterministic equivalents moreover the autoregressive integrated moving average arima model is employed to characterize the stochastic wind farm wf generation by predetermined mean level and standard deviation of wind behavior as well as temporal correlation the problem is formulated as a mixed integer stochastic framework for a hydro wind power system scheduling and tested on a generation company genco

optimal offering and operating strategies for wind storage systems with linear decision rules the participation of wind farm energy storage systems wf ess in electricity markets calls for an integrated view of day ahead offering strategies and real time operation policies such an integrated strategy is proposed here by co optimizing offering at the day ahead stage and operation policy to be used at the balancing stage linear decision rules are seen as a natural approach to model and optimize the real time operation policy these allow enhancing profits from balancing markets based on updated information on prices and wind power generation our integrated strategies for wf ess in electricity markets are optimized under uncertainty in both wind power and price predictions the resulting stochastic optimization problem readily yields optimal offers and linear decision rules by adding a risk aversion term in form of conditional value at risk into the objective function the optimization model additionally provides flexibility in finding a trade off between profit maximization and risk management uncertainty in wind power generation as well as day ahead and balancing prices takes the form of scenario sets permitting to reformulate the optimization problem as a linear program case studies validate the effectiveness of the strategy proposed by highlighting and quantifying benefits w r t other existing strategies

macroeconomics economic stratification and partisanship a longitudinal analysis of contingent shifts in political identification this study examines the effects of unemployment and inflation on aggregate party identification since 1953 distributive explanations emphasizing partisan preferences about macroeconomic outcomes and their effects on different income groups are gauged by letting the explanatory variables have dissimilar effects when different parties hold office independents are included so multinominal logit can be used to trace movements between all three identification choices when a democrat is president increased unemployment heightens democratic identification but inflation has no effects when a republican is president increased unemployment and inflation reduce republican identification these results reveal historically contingent relationships between macroeconomic outcomes and partisan coalitions

corn models in the classical tradition p sraffa considered historically this paper deals with the historical plausibility and analytical validity of what has come to be termed the corn model the ongoing debate is firstly reviewed it is suggested that a definite answer should be based on the logic of the material produce comparisons although these do not lead invariably to a sound application of the corn model neither do they constitute per se a sign of classicism however it is shown that before and after ricardo corn models of various sorts and logical stringency were developed in order to cope with the problem of 1 the determination of the rate of profit in the only basic sector of the economy agriculture independent of any valuation and 2 its primacy over the overall economy copyright 1991 by oxford university press

evolution toward standardized market design the evolution toward the standardized market design smd is presented in this paper with references to the market developments in new zealand australia pjm iso ne and ercot in the development of market designs two main objectives market liquidity facilitating bilateral trading and pricing efficiency facilitating congestion management have been pursued the efforts to balance the seemingly conflicting objectives led to most markets designed with a uniform or zonal pricing model introduction of locational marginal pricing and evolution of transmission rights from physical to financial form made it possible to harmonize the potentially conflicting goals in a market design the close coupling between energy and ancillary services requires that markets for these commodities be carefully coordinated different operational practices and reliability standard requirements have led to major differences in ancillary service market designs

expectations learning and business cycle fluctuations this paper explores an alternative theory based on learning dynamics in the con text of an otherwise standard stochastic growth model we consider an environment in which households and firms have an incomplete model of the macroeconomy knowing only their own objectives constraints and beliefs agents are optimizing have a completely specified belief system but do not know the equilibrium map ping between primitive disturbances the aggregate state of the economy and mar ket clearing prices by extrapolating from historical patterns in observed data they approximate this mapping to forecast variables that are exogenous to their decision problems such as the rental rate of capital and the real wage this belief structure has the property that beliefs affect the true data generating process of the economy which in turn affects belief formation the economy is therefore self referential shifts in beliefs about future returns to labor and capital affect current market clear ing prices which in turn can reinforce beliefs in this environment current prices can become less informative about future economic conditions generating fluctuations in real activity this kind of mechanism driving business cycle fluctuations is found in early writ ings on macroeconomic dynamics for example alfred c pigou 1927 on page 122 writes

military prime contracts and taxes in the new york metropolitan region a short run analysis warf b and cox j c 1989 military prime contracts and taxes in the new york metropolitan region a short run analysis reg studies 23 241 251 this paper examines the impacts of military prime contracts awarded to firms in the new york metropolitan area emphasizing its predominantly service sector orientation input output analysis is used to compute the short run impacts of prime contracts and the associated federal personal and corporate income taxes collected to finance them the gross and net impacts on employment output and incomes in new york city its suburbs in new york state and northern new jersey are reviewed with regard to the industries positively and negatively affected finally the distribution of employment by occupational groups is analysed demonstrating that prime contracts generate few white collar jobs and relatively large numbers of blue collar ones warf b et cox j c 1989 les premiers contrats militaires et les impots dans la zone metropolitaine de new york une analys

further evidence for sraffa s interpretation of ricardo samuel hollander 1973 1975 1979 has attracted much attention by disputing piero sraffa s famous corn model interpretation of ricardo s 1815 essay on profits john eatwell 1975 and more recently pierangelo garegnani 1982 in this journal have come to sraffa s defence at issue is sraffa s suggestion contained in the introduction to the first volume of his edition of ricardo s works that the rational foundation of ricardo s dictum that the profits of the farmer regulate the profits of all other trades is the assumption that the inputs and outputs of agricultural production are roughly homogenous and that the rate of profit in agriculture may therefore be conceived as a ratio of physical quantities independent of valuation sraffa 1951 p xxxi eatwell and garegnani base their defences of this proposition upon exegeses of the relevant text and correspondence in this short paper i will show that further evidence in support of sraffa s view may be found in a now little known article written by robert torrens which appeared in the edinburgh review of october 1819 1 that article which was ostensibly a review of four pamphlets of robert owen and which bore the running title mr owen s plans for relieving the national distress details a corn model theory of profits in much more explicit terms than does ricardo s essay on profits ricardo moreover was not only familiar with the article but wrote approvingly of it in several letters to j r mcculloch on 28 february 1820 he wrote

stochastic optimization model to study the operational impacts of high wind penetrations in ireland a stochastic mixed integer linear optimization scheduling model minimizing system operation costs and treating load and wind power production as stochastic inputs is presented the schedules are updated in a rolling manner as more up to date information becomes available this is a fundamental change relative to day ahead unit commitment approaches the need for reserves dependent on forecast horizon and share of wind power has been estimated with a statistical model combining load and wind power forecast errors with scenarios of forced outages the model is used to study operational impacts of future high wind penetrations for the island of ireland results show that at least 6000 mw of wind 34 of energy demand can be integrated into the island of ireland without significant curtailment and reliability problems

unstable inflation targets this paper studies long run inflation targets and stability in an imperfect information environment when central banks set an inflation target that is not fully communicated agents draw inferences about inflation from recent data and remain alert to structural change by forming expectations from a forecasting model that is estimated via discounted least squares inflation targets can lead agents beliefs to depart from rational expectations through two channels first implementing a higher inflation target can lead to overshooting second there can be nearly self fulfilling inflation disinflation or deflation that arises as an endogenous response to shocks policy implications for implementing a higher target without deanchoring expectations are discussed

application of information gap decision theory to risk constrained self scheduling of gencos in a competitive electricity market a generation company genco optimizes its operation schedules referred to as self scheduling in order to maximize its profit however various sources of uncertainty such as market price fluctuations or forced outage of generating units may impact the genco s profit in this paper a non probabilistic information gap model is proposed to model the uncertainties in short term scheduling of a genco the self scheduling problem is formulated for risk neutral risk averse and risk seeker gencos robustness of the decisions against low market prices are evaluated using a robustness model furthermore windfall higher profit due to unpredicted higher market prices is modeled using an opportunity function the proposed models are applied to a 54 unit thermal genco

three or two stage stochastic market clearing algorithm as the power industry considers moving from a deterministic paradigm to a stochastic one to clear the day ahead market in systems with significant stochastic production the following question arises how should a stochastic clearing algorithm be formulated our analyses indicate that a three stage stochastic approach is clearly superior to a two stage one to show this we propose a model that includes three stages the first one represents the day ahead market the second stage the intraday market and the third one the real time operation the objective is to clear the day ahead market but with a prognosis of the future the intraday market and the real time operation to assess the impact of the intraday market on the day ahead outcomes we compare the results obtained from the proposed model with those of a simpler but more common two stage model which represents the day ahead market and the real time operation

uncertainty marginal price transmission reserve and day ahead market clearing with robust unit commitment the increasing penetration of renewable energy in recent years has led to more uncertainties in power systems these uncertainties have to be accommodated by flexible resources i e upward and downward generation reserves in this paper a novel concept uncertainty marginal price ump is proposed to price both the uncertainty and generation reserve at the same time the energy is priced at locational marginal price lmp a novel market clearing mechanism is proposed to credit the generation and reserve and to charge the load and uncertainty within the robust unit commitment in the day ahead market we derive the umps and lmps in the robust optimization framework ump helps allocate the cost of generation reserves to uncertainty sources we prove that the proposed market clearing mechanism leads to partial market equilibrium we find that transmission reserves must be kept explicitly in addition to generation reserves for uncertainty accommodation we prove that transmission reserves for ramping delivery may lead to financial transmission right ftr underfunding in existing markets the ftr underfunding can be covered by congestion fund collected from uncertainty payment in the proposed market clearing mechanism simulations on a six bus system and the ieee 118 bus system are performed to illustrate the new concepts and the market clearing mechanism

fiscal policy and class income inequality the distributional consequences of governmental revenues and expenditures in the united states 1949 1976 despite the vast expansion in governmental spending during the post second world war era few researchers have sought to analyze the income distributional consequences of state fiscal policies the present research initially elaborates three abstract perspectives on the state and on united states budgetary practices then using factor share income as a proxy for broad class groupings this research provides a time series regression analysis of the impact of state expenditures and revenue extraction on the distribution of income in the united states for the years 1949 1976 results suggest that governmental revenue policies have had a procapital bias while state expenditures have tended to favor labor relative to capital the net impact of these contradictory tendencies has left the market based income distribution relatively unchanged despite the sizeable growth of the public sector during the period under study

a single settlement energy only electric power market for unpredictable and intermittent participants we discuss a stochastic programming based method for scheduling electric power generation subject to uncertainty such uncertainty may arise from either imperfect forecasting or moment to moment fluctuations and on either the supply or the demand side the method gives a system of locational marginal prices that reflect the uncertainty and these may be used in a market settlement scheme in which payment is for energy only we show that this scheme is revenue adequate in expectation

a security constrained bid clearing system for the new zealand wholesale electricity market this paper reports upon the mathematical models and implementation of the scheduling pricing and dispatch spd application for the new zealand electricity market nzem spd analyzes bids for energy offers reserve offers and energy demands and recognizes explicitly the effects on bid clearing due to transmission congestion network losses reserve requirements and ramp rate limits advanced lp solution methods are utilized to solve the large scale constrained optimization problem results on a 67 bus test system and the nzem are included

pricing energy and ancillary services in integrated market systems by an optimal power flow a detailed ac opf based formulation for procuring pricing and settling energy and ancillary service in simultaneous auctions by integrated market systems is presented the paper provides clear definitions of locational marginal prices for energy and ancillary service marginal prices in terms of lagrange multipliers the characteristics of the prices are analyzed especially when economic substitution among ancillary services is required the paper also evaluates the conditions under which opportunity costs are incurred to units that provide ancillary services it is particularly shown that the intuitive belief that the provision of regulation down service does not incur opportunity cost to the provider in general is not true

energy and reserve pricing in security and network constrained electricity markets this paper analyzes some unresolved pricing issues in security constrained electricity markets subject to transmission flow limits although the notion of separate reserve types as proposed by ferc can be precisely and unambiguously defined when transmission constraints are active the very existence of separate reserve prices and markets is open to question when the prices are based on marginal costs instead we submit here that the only products whose marginal costs can be separately and uniquely defined and calculated are those of energy and security at each node thus under marginal pricing at any given network bus all scheduled reserve types should be priced not at separate rates but at a common rate equal to the marginal cost of security at that bus furthermore we argue that nodal or area reserves cannot be prespecified but must be obtained as by products of the market clearing process simulations back up these conclusions

towards full integration of demand side resources in joint forward energy reserve electricity markets this paper proposes a security constrained forward market clearing algorithm within which the inherent characteristics of demand flexibility are acknowledged when the provision of reserve from the demand side is considered in the proposed formulation we co optimize the cost of scheduling the appropriate resources to guarantee the security of the system and the expected cost of operating under any credible system state in addition we consider that consumers can offer to provide spinning reserve capacity deployable by voluntary load reductions in response to contingencies due to the load recovery effect i e since energy usage is essentially postponed when demand side reserve is deployed in post contingency states any voluntary reduction in the load has to be accompanied by a subsequent increase in demand from the initial forecast we demonstrate that the marginal value of the reserve provided by the demand can only be calculated taking into account the cost of supplying the recovery consumption flexible consumers can reduce their payments on average if energy is settled through real time prices

defence spending and unemployment rates an empirical analysis disaggregated by race this analysis brings u s time series evidence to bear on the relationship of defense spending and unemployment rates results indicate that defense increases during the 1970s were associated with improvements in the overall unemployment rate however during the 1980s such increases were associated with a worsening of the unemployment rate furthermore upon disaggregation into black and white unemployment rates it was found that in general whites were helped by defense spending increases while blacks were hurt this evidence offers support for the claim that an increasing complex military production process will lead to diminished employment gains particularly for minorities who are not proportionately represented in the high tech industries that serve the military copyright 1990 by oxford university press

comprehensive value assessment of wind power by layer great emphasis has been placed on rational value assessment of wind power in system in recent times because there are different properties in various output levels of wind power there should also be different values this paper proposes a novel method for value assessment of wind power to get a more comprehensive and accurate evaluation wind power outputs are divided horizontally based on the wind layer model then comprehensive studies of cost and benefit are conducted layer by layer furthermore the detailed characteristics in layers storage benefit and value allocation are analyzed after that the sensitivities about the chosen system parameters region size and demand side participation are discussed at length the effectiveness and rationality of the model are proved by the case study the model assesses the value of wind power more precisely and profoundly which would provide significant guidance in the setting of price policy for wind power and market supervision

are output fluctuations transitory according to the conventional view of the business cycle fluctuations in output represent temporary deviations from trend the purpose of this paper is to question this conventional view if fluctuations in output are dominated by temporary deviations from the natural rate of output then an unexpected change in output today should not substantially change one s forecast of output in say five or ten years our examination of quarterly postwar united states data leads us to be skeptical about this implication the data suggest that an unexpected change in real gnp of 1 percent should change one s forecast by over 1 percent over a long horizon

market implications and pricing of dynamic reserve policies for systems with renewables static reserve policies are used within security constrained unit commitment scuc and security constrained economic dispatch sced to ensure reliability a common policy is that 10 min reserve must exceed the largest contingency however this condition does not guarantee reliability because voltage and thermal limits can hinder reserve deliverability many operators use zonal reserve markets to ensure reserves are dispersed across the grid such zonal models attempt to anticipate transmission bottlenecks which is a difficult task when the future system state is uncertain this paper examines the market implications of dynamic reserve policies used to mitigate uncertainty from renewable resources and contingencies we study the market implications of policies recently proposed in the literature such as hourly zones within day ahead scuc and an algorithm that formally disqualifies reserves that are expected to be undeliverable a locational reserve pricing scheme is also proposed in connection with scenario based reserve disqualification analysis on the rts 96 test case shows that dynamic zones and reserve disqualification along with the proposed compensation scheme help direct reserve payments toward resources that more effectively respond to contingencies

the value of intra day markets in power systems with high wind power penetration in this paper the value of intra day markets in managing wind power uncertainty in competitive electricity markets is analyzed a competitive electricity market model consisting of a day ahead market and a number of intra day markets is considered real time operation adjustment is also taken into account stochastic programming is used to model decision making under wind power uncertainty numerical simulations based on two test systems are presented

perpetual learning and apparent long memory abstract this paper studies the low frequency dynamics in forward looking models where expectations are formed using perpetual learning such as constant gain least squares we show that if the coefficient on expectations is sufficiently close to unity perpetual learning induces strong persistence that is empirically indistinguishable from long memory we apply this result to present value models of stock prices and exchange rates and find that perpetual learning can explain the long memory observed in the data

the determinants of military expenditures in developing countries abstract this paper first discusses the results of various quantitative studies of the impact of military spending on economic growth in developing countries it concludes that there is little doubt that this impact is generally negative the paper then proceeds to consider the main factors influencing the level of military expenditure itself the analysis is developed from a conceptual matrix covering the national regional and global levels each being divided into political military and economic aspects the quantitative analysis based on cross country regressions for the period 1978 to 1980 indicates that differences among developing countries in the relative size of their military burdens reflect a complex of factors both domestic regional and global and both political military and economic

accounting for exchange rate variability in present value models when the discount factor is near 1 a well known stylized fact about nominal exchange rates among low inflation advanced countries particularly u s exchange rates is that their logs are approximately random walks michael i mussa 1979 is most frequently cited for observing this regularity in a famous pair of papers richard a meese and kenneth rogoff 1983a b found that the structural models of the 1970 s could not beat a random walk in explaining exchange rate movements recently some authors menzie chinn and meese 1995 nelson mark 1995 mark and donggyu sul 2001 have argued that the models can outforecast the random walk at long horizons but a comprehensive recent study by yin wong cheung et al 2003 documents that no model consistently outperforms a random walk why one obvious explanation is that the macroeconomic variables that determine the exchange rate themselves follow random walks if the log of the nominal exchange rate is a linear function of forcing variables that are random walks then it will inherit the random walk property the problem with this explanation is that the economic fundamentals proposed in the most popular models of exchange rates do not in fact follow simple random walks one resolution to this problem is that there may be some other fundamentals ones that have been proposed in some models but are not easily measurable or ones that have not yet been proposed at all that are important in determining exchange rates if these unobserved fundamentals follow random walks and dominate the variation in exchange rate changes then exchange rates will nearly be random walks even if the standard observed fundamentals are not in engel and west 2003a hereinafter ew we propose an alternative explanation we consider linear models of the exchange rate that are in the asset market approach to exchange rates these models emphasize the role of expectations of future economic fundamentals in determining the current exchange rate the exchange rate expressed as the home currency price of foreign currency in this paper can be written as a discounted sum of the current and expected future fundamentals

a fractional cointegration analysis of purchasing power parity a generalized notion of cointegration called fractional cointegration is introduced to examine the long run purchasing power parity ppp hypothesis by allowing deviations from equilibrium to follow a fractionally integrated process the fractional cointegration analysis can capture a wider range of mean reversion behavior than standard cointegration analyses this gain is flexibility in modeling subtle mean reverting dynamics is found to be important for a proper evaluation of long run ppp empirical results based on historical data for the 1914 1989 period show that ppp reversion exists and can be characterized by a fractionally integrated process in three out of five countries studied the results support ppp as a long run phenomenon though significant short run deviations from ppp can exist

the political economy of military expenditure an introduction this paper shows that although the military burden has declined since the korean war in the oecd it still represents an important component of government spending the magnitude of military spending does not provide a measure of its importance to the economy the relation between military spending and accumulation has to be seen as a complex historical dialectical process in which military spending plays a contradictory role the other contributions to the symposium are then discussed within this framework they deal with the empirical analysis of the economic costs of military spending the impact of changing military spending and the problems of conversion copyright 1990 by oxford university press

assessment and simulation of the responsive demand potential in end user facilities application to a university customer many problems have appeared with the practical implementation of restructured electrical business in the u s and european union such as lack of generation network constraints etc a good example of these problems is the scarce participation of the demand in the electricity markets energy reserve and other ancillary services problems that could be solved through new demand responsive programs aimed to replace the traditional demand side management programs into voluntary demand participation programs a methodology for the generation of demand side bids and offers in large customer facilities and a real application to a university customer is presented in this paper the methodology is based on the knowledge of the physical processes involved in the electricity consumption and on the flexibility of the required supply the result of the methodology proposed is a set of demand packages that can be used to participate in different electricity markets whose possibilities in the market arena will be explored in a consequent paper

stochastic optimization of sub hourly economic dispatch with wind energy we present a stochastic programming framework for a multiple timescale economic dispatch problem to address integration of renewable energy resources into power systems this framework allows certain slow response energy resources to be controlled at an hourly timescale while fast response resources including renewable resources and related network decisions can be controlled at a sub hourly timescale to this end we study two models motivated by actual scheduling practices of system operators using an external simulator as driver for sub hourly wind generation we optimize these economic dispatch models using stochastic decomposition a sample based approach for stochastic programming computational experiments conducted on the ieee rts96 system and the illinois system reveal that optimization with sub hourly dispatch not only results in lower expected operational costs but also predicts these costs with far greater accuracy than with models allowing only hourly dispatch our results also demonstrate that when compared with standard approaches using the extensive formulation of stochastic programming the sequential sampling approach of stochastic decomposition provides better predictions with much less computational time

pricing energy and reserves using stochastic optimization in an alternative electricity market this paper presents a stochastic linear programming model that can be used for pricing in electrical energy and reserve markets it addresses capacity energy and reserve dispatch problems that may arise from n 1 contingency scenarios possible market solutions focusing on generator compensation using real time day ahead and hybrid schemes are enumerated along with opportunities for consumer pricing and transmission costing this model is illustrated on a 6 bus test system as well as a larger 66 bus system representing the ontario network a key difference among schemes is the degree of risk to the generators measured by variance in profit

self confirming equilibrium rium path of play thus if a self confirming equilibrium occurs repeatedly no player ever observes play that contradicts his beliefs even though beliefs about play at off path information sets need not be correct we characterize the ways in which self confirming equilibria and nash equilibria can differ and provide conditions under which self con firming equilibria correspond to standard solution concepts nash equilibrium and its refinements describe a situation in which i each player s strategy is a best response to his beliefs about the play of his opponents and ii each player s beliefs about the opponents play are exactly correct we propose a new equilibrium concept self confirming equilibrium that weakens condition ii by requiring only that players beliefs are correct along the equilibrium path of play thus each player may have incorrect beliefs about how his opponents would play in contingencies that do not arise when play follows the equilibrium and moreover the beliefs of different players may be wrong in different ways the concept of self confirming equilibrium is motivated by the idea that noncooperative equilibria should be interpreted as the outcome of a learning process in which players revise their beliefs using their observations of previous play suppose that each time the game is played the players observe the actions chosen by their opponents but that players do not observe the actions their opponents would have played at the information sets that were not reached along the path of play then if a self confirming equilibrium occurs repeatedly no player ever observes play that contradicts his beliefs so the equilibrium is self confirming in the weak sense of not being inconsistent with the evidence by analogy with the literature on the bandit problem e g rothschild 1974 one might expect that a non nash self confirming equilibrium can be the outcome of plausible learning processes this point was made by fudenberg and

self commitment of combined cycle units under electricity price uncertainty day ahead energy market clearing relies on a deterministic equivalent model with a limited time horizon which may lead to inefficient scheduling of generating units from the point of view of generators for this reason generators may wish to assume the risk of self committing their units with the hope of securing greater profits this phenomenon may reduce the room for economic signals in the day ahead market in this paper we investigate the influence of risk aversion and price volatility on the decision of generators to self commit units we present a stochastic programming model for self committing combined cycle units under price uncertainty with a conditional value at risk criterion we use benders decomposition to solve the problem and present results on a case study to draw conclusions

professor garegnani s defence of sraffa on the material rate of profit in two articles 1973 1975 and in my economics of david ricardo 1979 i have given a blow by blow account of the evidence relating to ricardo s position on profits professor garegnani s 1982 criticisms do not lead me to retract much of his argument is based on circumstantial evidence and fails to make accurate use of what ricardo actually wrote on the matter although he is aware of the materials available the most useful path for me now is to review some of the key issues limiting myself however to an examination of the evidence presented by sraffa who originated the hypothesis which is in dispute there is no point in going further if this matter is not resolved

load following reserves procurement considering flexible demand side resources under high wind power penetration the variable and uncertain nature of the leading renewable energy resources such as wind power generation imposes the development of a sophisticated balance mechanism between supply and demand to maintain the consistency of a power system in this study a two stage stochastic programming model is proposed to procure the required load following reserves from both generation and demand side resources under high wind power penetration besides a novel load model is introduced to procure flexible reserves from industrial clients load following reserves from load serving entities lse are also taken into account as well as network constraints load shedding and wind spillage the proposed methodology is applied to an illustrative test system as well as to a 24 node system

economic valuation of reserves in power systems with high penetration of wind power this paper proposes a methodology to determine the required level of spinning and nonspinning reserves in a power system with a high penetration of wind power the computation of the required reserve levels and their costs is achieved through a stochastic programming market clearing model spanning a daily time horizon this model considers the network constraints and takes into account the cost of both the load shedding and the wind spillage the methodology proposed is illustrated using an example and a realistic case study some conclusions are finally drawn

rethinking an old empirical puzzle econometric evidence on the forward discount anomaly using both semiparametric and parametric estimation methods this paper corroborates earlier findings of fractionally integrated behaviour in the forward premium two new explanations are also proposed to help reconcile earlier conflicting empirical evidence on the time series properties of the forward premium traditional regression approaches used to test the forward rate unbiasedness hypothesis are then evaluated including regression in levels in returns fama s 1984 regression and in error correction format interesting statistical and or interpretive implications are found in all three cases for example the predictions of the appropriate nonstandard limit theory are consistent with many of the standard empirical results reported from fama s regression including the commonly occurring yet puzzling negative correlations between spot returns and the forward premium it is suggested that the principal failure of unbiasedness may be due instead to the difference in persistence between these two series copyright 2001 john wiley sons ltd

the swiss reserve market stochastic programming in practice this paper presents the evolution and design of the swiss reserve market and describes its two stage stochastic market clearing model in switzerland the reserve market comprises weekly and daily auctions the decision making problem is to determine the amount of reserves that should be procured in each market stage the stochasticity stems from daily offers which are not available at the beginning of the week when the first stage decisions are made the new market clearing model minimizes expected procurement costs of reserves while taking reserve dimensioning criteria and market properties into consideration since the last week of january 2014 this model has been clearing the reserve market in switzerland to our knowledge this is the first real world implementation of a stochastic market clearing model in electricity markets

european market integration with mixed network representation schemes a centralized market splitting algorithm is implemented in this paper in a europe wide level comprising both power pools and power exchanges with each local national market respecting the standard constraints imposed by its own regulatory framework including the full set of unit technical commitment constraints and system operating constraints in power pools in view of the forthcoming large scale res penetration physical markets with unit based offers either pools or pxs check the feasibility of the electricity market solution against their internal intra zonal transmission network constraints considering full network topology this is accomplished through an iterative process iterating between the overall optimization algorithm and intra zonal power flows of the countries regions which identify possible congestions and incorporate additional constraints in the central pan european market splitting problem the iterative process terminates when all internal transmission constraints are satisfied locational marginal prices lmps can be computed in the physical markets whereas zonal system marginal prices are computed in markets with portfolio bidding schemes the proposed algorithm is tested in terms of computational efficiency using the full ucte network

a stochastic programming model for a day ahead electricity market with real time reserve shortage pricing we present a multi period stochastic mixed integer programming model for power generation scheduling in a day ahead electricity market the model considers various scenarios and integrates the idea of reserve shortage pricing in real time instead of including all the possible scenarios we parsimoniously select a certain number of scenarios to limit the size of the model as realistic size models are still intractable for exact methods we propose a heuristic solution methodology based on scenario rolling that is capable of finding good quality feasible solutions within reasonable computation time

rolling optimization of wind farm and energy storage system in electricity markets intraday energy markets have been established in some power markets mainly because of large scale wind power integration inspired by the spanish power market this paper proposes a modified market design which contains day ahead and intraday energy bidding sections to better accommodate stochastic wind energy then coordinated operation of the wind farm wf and energy storage system ess is studied rolling stochastic optimization formulations for day ahead intraday biddings and real time operations are put forward to obtain the optimal bidding strategy of wf ess union in each bidding section to maximize its overall profit case studies and sensitivity analyses are carried out on a union of wfs and a pumped storage plant psp simulation results show that the proposed rolling optimization method can effectively utilize the updated wind power forecast data and regulation capability of ess and thus increase profit for the union prominently

modeling approaches for computational cost reduction in stochastic unit commitment formulations although stochastic commitment policies provide robust and efficient solutions they have high computational costs this letter considers two modeling approaches for the reduction of their computational effort the relaxation of the integrality constraint of fast start units and the modeling of generation outages as load increments these approaches are shown to reduce the computational cost while maintaining the good properties of stochastic policies

ricardo s early treatment of profitability reply to hollander and prendergast i will deal first with professor hollander s objection to my reading of ricardo s letter to malthus of i i august i8i4 and with his startling claim to have readily accept ed the corn calculation in ricardo s correspondence of i8i4 i986 p iq99 the passage from the letter in question begins individuals do not estimate their profits by the material production but nations invariably do works vi p i2i in my article i984 p 737 i took this as a response to malthus s point that in no case of production is the produce exactly of the same nature as the capital advanced consequently we can never properly refer to a material rate of produce works vi p i i 7 the salient features of ricardo s reply are first that he does not mention let alone defend the assumption of capital product homogeneity which casts doubt on sraffa s interpretation works i p xxxi and secondly that he does defend the measurement of profits the net social surplus in material terms hollander complains that the passage from ricardo in fact says nothing about the profit rate or profit share i986 p 4 his emphasis this is true and instead of drawing the inference that any previous reference by ricardo to a material rate of produce was based on the representation of the profit share in physical terms i984 p 737 emphasis added i should have said simply profit or net surplus this does not make a fundamental difference to my interpretation hollander also underlines my observation that ricardo did not restrict the material estimation of profits to the agricultural sector but ricardo s argument that nations invariably estimate profit in material terms can be read as a justification for using the technique in a more unusual context specifically in the treatment of agriculture which was after all the sector to which malthus was apparently referring when he made his objection about the material rate of produce works vi pp i i 7 8 i therefore stand by my interpretation or tortuous meandering as professor hollander so colourfully describes it i986 p i093 which brings me to the readily accept ed corn calculation that hollander would put in its place until hollander i983 the textual basis for attributing the calculation was confined to ricardo s letter of 25 july i 8 i 4 works vi pp i i 4 5 leaving aside temporarily the validity of this evidence it is relevant to consider hollander s reaction s to his discovery in hollander i973 the calculation is described as a rather casual and

using a system model to decompose the effects of influential factors on locational marginal prices locational marginal prices lmps are influenced by various factors such as load uncertainty thermal limit capacity reserve and market power we build a system model to quantitatively analyze the effects of these individual factors and their interactions on the mean and standard deviation of the lmps assuming that the factors are either active or inactive according to the sensitivity analysis results from convex quadratic programming lmps are piecewise linear functions of demand variation which is a key property used in the computation this paper attempts to answer the following types of questions 1 to what extent does market power raise the lmps above the marginal cost 2 what effects will generation or transmission capacity expansion have on relieving high lmps under high demand scenarios an ieee 30 bus test system is used as an example to demonstrate our approach

security constrained unit commitment for simultaneous clearing of energy and ancillary services markets this paper introduces a security constrained unit commitment scuc model with emphases on the simultaneous optimization of energy and ancillary services markets benders decomposition is used to decouple the scuc into a unit commitment uc master problem and hourly network security checking subproblems lagrangian relaxation is used to decouple the uc problem into individual single unit commitment problems dynamic programming is used to find the optimal commitment decision a simultaneous marginal curve algorithm is proposed to find the optimal values of energy and ancillary services a six bus system with three units and the ieee 118 bus system with 54 units are analyzed to illustrate the proposed model

stochastic multiobjective market clearing of joint energy and reserves auctions ensuring power system security in this paper a stochastic multiobjective framework is proposed for day ahead joint market clearing the proposed multiobjective framework can concurrently optimize competing objective functions including augmented generation offer cost and security indices overload index voltage drop index and voltage stability margin besides system uncertainties including generating units and branches contingencies and load uncertainty are explicitly considered in the stochastic market clearing scheme the solution methodology consists of two stages which firstly employs roulette wheel mechanism and monte carlo simulation mcs for random adaptive 24 h scenario generation wherein the stochastic multiobjective market clearing procedure is converted into its respective deterministic equivalents scenarios in the second stage for each deterministic scenario a multiobjective mathematical programming mmp formulation based on the epsiv constrained approach is implemented for provision of spinning reserve sr and nonspinning reserve nsr as well as energy the mmp formulation of the market clearing process is optimized while meeting ac power flow constraints and expected interruption cost eic the ieee 24 bus reliability test system rts 24 bus is used to demonstrate the performance of the proposed method

the ricardo debates hollander and garegnani on natural price and output determination samuel hollander and pierangelo garegnani have debated the appropriate interpretation of david ricardo since 1973 without substantive agreement on at least one issue the interdependence of prices and output levels the debate has stalled because textual exegesis cannot solve a logical problem this paper demonstrates that such interdependence exists unless one makes one of two restrictive and un ricardian assumptions either output levels must be insensitive to wage rate changes or all industries must be subject to constant costs

on interpreting ricardo a reply to sraffians this paper seeks to clarify and defend aspects of the interpretation advanced in interpreting ricardo terry peach 1993 in the light of published criticisms by writers of a sraffian persuasion the principal areas of discussion include the corn model interpretation the labor theory of value and the invariable measure of value and the ricardo sraffa relationship copyright 1998 by oxford university press

electricity price short term forecasting using artificial neural networks this paper presents the system marginal price smp short term forecasting implementation using the artificial neural networks ann computing technique the described approach uses the three layered ann paradigm with backpropagation the retrospective smp real world data acquired from the deregulated victorian power system was used for training and testing the ann the results presented in this paper confirm considerable value of the ann based approach in forecasting the smp

optimal self scheduling of a thermal producer in short term electricity markets by milp this paper addresses the problem of the self scheduling of a thermal electricity producer in day ahead energy and reserves markets a 0 1 mixed integer linear formulation of the producer self scheduling problem is provided which allows a realistic and accurate modeling of the unit s operating phases a novel unit start up modeling is presented in which three different start up types are modeled hot warm and cold each with distinct start up cost synchronization time soak time and predefined start up power output trajectories all dependent on the unit s prior reservation time test results address the effect of the energy and reserves market clearing prices on the producer units day ahead commitment status and profits

robert torrens and ricardo s corn ratio theory of profits the main point at issue in the dispute started more than ten years ago by s hollander on sraffa s interpretation of ricardo s early theory of profits undoubtedly concerns the logic underlying the notion which ricardo entertained at that stage namely that it is the profits of the farmer which regulate the profits of all other trades ricardo to trower 5 march 1814 in ricardo 1951 73 vi p 104 as is well known the rational foundation for such statements by ricardo was according to sraffa that in agriculture the same commodity namely corn forms both the capital and the product therefore in agriculture the rate of profit is determined as a ratio between two quantities of corn without any question of valuation if there is to be a uniform rate of profit in all trades it is the exchangeable values of the product of other trades relatively to corn that must be so adjusted as to yield the same rate of profit as has been established in the growing of corn sraffa 1951 p xxxi hollander writes that it does not seem likely that ricardo intended to ascribe a determining role to the agricultural sector on the logic ascribed to him by sraffa 1979 p 146 it is remarkable that hollander concedes even more than is necessary for sraffa s case when he writes of his ricardo s assumption in the essay that corn alone enters the wage basket ibid he seems however to reconcile this with his general position by suggesting that the essay on profits constitutes an essay in persuasion p 118 and its policy orientation would justify ricardo s emphasis upon corn in the wage basket to get the message across regarding the effects of corn import restriction no general theoretical significance ought to be attached to such strong cases hollander 1979 p 146 i shall not deal here with the difficulties that hollander s reconstruction of what ricardo intended encounters on grounds of both logic and evidence for this see eatwell 1975 garegnani 1982 the purpose of the present note is to show that the logic which sraffa ascribes to ricardo is clearly spelled out in the second edition of torrens external corn trade 1820 where we find both the determination of the agri cultural rate of profit in physical terms as a ratio between two quantities of corn and the determination of the value of manufactured goods relative to corn using the given agricultural rate of profit remarkably in this work torrens goes out of his way to acknowledge his great indebtedness to ricardo s original and profound inquiry into the

electricity market clearing with improved scheduling of stochastic production abstract in this paper we consider an electricity market that consists of a day ahead and a balancing settlement and includes a number of stochastic producers we first introduce two reference procedures for scheduling and pricing energy in the day ahead market on the one hand a conventional network constrained auction purely based on the least cost merit order where stochastic generation enters with its expected production and a low marginal cost on the other a counterfactual auction that also accounts for the projected balancing costs using stochastic programming although the stochastic clearing procedure attains higher market efficiency in expectation than the conventional day ahead auction it suffers from fundamental drawbacks with a view to its practical implementation in particular it requires flexible producers those that make up for the lack or surplus of stochastic generation to accept losses in some scenarios using a bilevel programming framework we then show that the conventional auction if combined with a suitable day ahead dispatch of stochastic producers generally different from their expected production can substantially increase market efficiency and emulate the advantageous features of the stochastic optimization ideal while avoiding its major pitfalls a two node power system serves as both an illustrative example and a proof of concept finally a more realistic case study highlights the main advantages of a smart day ahead dispatch of stochastic producers

price maker self scheduling in a pool based electricity market a mixed integer lp approach this paper addresses the self scheduling problem faced by a price maker to achieve maximum profit in a pool based electricity market an exact and computationally efficient mixed integer linear programming milp formulation of this problem is presented this formulation models precisely the price maker capability of altering market clearing prices to its own benefits through price quota curves no assumptions are made on the characteristics of the pool and its agents a realistic case study is presented and the results obtained are analyzed in detail

modeling u s budgetary and fiscal policy outcomes a disaggregated systemwide perspective this paper develops and estimates a model of u s federal budgetary outcomes that allows for considerable disaggregation across spending categories while providing through cross equation coefficient restrictions substantially more statistical power than traditional approaches we identify significant top down fiscal policy effects on budgetary allocations primarily within the defense budget budgetary responses to macroeconomic conditions are generally countercyclical although middle class entitlements appear to react procyclically to inflation political control of congress influences budgetary outcomes with democrats giving higher priority to domestic spending programs the relative rate of public sector inflation affects spending growth consistent with baumol s disease public opinion affects defense and low income entitlement spending defense spending has also been influenced by perceived soviet threat as well as the level of armed conflict there appear to be small election year effects although not of the sort predicted by political business cycle models with a few exceptions administration specific impacts are relatively small and not systematically related to the party of the president

demand side reserve offers in joint energy reserve electricity markets we propose a market model that includes demand side reserve offers and where energy and reserve are jointly dispatched generators and consumers can submit offers and bids on five distinct products energy upspinning reserve downspinning reserve and two kinds of standby reserve the resources are scheduled and dispatched in a joint auction through a mixed integer optimization program the extra scheduling flexibility introduced by demand side reserve offers can lead to significant gains in economic efficiency thus the results suggest that not only do the consumers increase their profits but in addition the market power of the generators is reduced

two stage stochastic programming model for market clearing with contingencies planning for contingencies typically results in the use of more expensive facilities before disruptions it leads to different prices and energy availability at various network locations depending on how the contingency analysis is performed in this paper we present a two stage stochastic programming model for incorporating contingencies the model is computationally demanding and made tractable by using an interior point log barrier method coupled with benders decomposition the second stage optimal recourse function rf defines the most economically efficient actions in the post contingency state for returning the system back to normal operating conditions the approach is illustrated with for two examples small with 8 buses 11 branches and ieee medium scale with 300 buses 411 branches

market clearing with stochastic security part ii case studies this paper analyzes the market clearing formulation with stochastic security developed in its companion paper through two case studies solved using mixed integer linear programming techniques the generation and reserve schedules as well as the nodal prices of energy and security are assessed under various conditions such as a line flow limits b when nonspinning reserve is excluded from the formulation c demand side valuation of energy not served d generator ramping limits and e the set of pre selected contingencies

optimal response of a thermal unit to an electricity spot market this paper addresses the optimal response of a thermal unit to an electricity spot market the objective is to maximize the unit profit from selling both energy and spinning reserve in the spot market the paper proposes a 0 1 mixed integer linear programming approach that allows a rigorous modeling of i nonconvex and nondifferentiable operating costs ii exponential start up costs iii available spinning reserve taking into account ramp rate restrictions and iv minimum up and down time constraints this approach overcomes the modeling limitations of dynamic programming approaches and is computationally efficient results from realistic case studies are reported