Market and regulatory frameworks for operational security in decarbonizing electricity systems: from physics to economics

Abstract

Grid integration of low-carbon resources comes with new, significant technical challenges for keeping a power system secure. Given a multitude of grid services with varying interactions and risks, the economics of power system security are similarly, if not more, complex. In this paper, we discuss the fundamental relationship between the physical and economic aspects of power system security in low-carbon grids. Specifically, we formulate a physics-informed approach for classifying power system security products and services. The approach yields two critical findings. First, we show that these services, rather than being a homogenous set of public goods, are more preferably regarded as a set of products/services (basket of goods) that have both public and private characteristics. Second, the framework reveals that many new system services are consistent with a common pool resource characterization. This implies an enhanced role for more localized network planning and co-ordination of access and service provision.