Internalization of reliability unit commitment in day-ahead market: Analysis and interpretation

To ensure enough generation capacities for real-time operation, reliability unit commitment (RUC) is imple-mented beyond the day-ahead market (DAM) of power industries. The additional commitments and decisions, which arrange more online generation capacities, ensure the reliability of the power supply. However, the out-of -market RUC leads to incentive issues for reliability units (RUs) and ultimately increases the out-of-market payments. To solve these problems, the compensation for RUs, including their production costs and lost op-portunity costs associated with RUC, is thoroughly analyzed. Then, an internalizing framework is presented to integrate the RUC into the DAM. The market-oriented method can determine the RUs in DAM and reduces out-of -market payments. Note that the internalization involves additional resources and influences the compensations for entities' services. In this paper, the related payments for all resources are reasonably implemented and the components of the resulted market-settlement surplus are decomposed. Case studies on the IEEE 30-bus and Polish systems demonstrate that the proposed method can reduce the out-of-market payments brought by RUC and improve economic efficiencies.