A pricing proposal for operating reserve ancillary services in a hydraulic competitive framework is presented. In this framework, generator agents bid for the availability of the service. This proposal aims the efficient reserve pricing based on both, agents competition and system operating conditions. In the first part of this paper, some aspects concerning to operating reserve are described, focusing, particularly, in the availability, use and opportunity costs. In the second part, the proposal is described, showing the market structure, the type of auctions and a joint power and operating reserve dispatch model, that considers the hydraulic and electrical characteristics of the system. These considerations are important in the Brazilian system, where there is a high percentage of hydraulic generation, that needs to be coordinated in a centralized manner, optimizing the operational costs. The problem is modeled with a linear integer mixed formulation, and is solved using a commercial optimization solver. The methodology is applied on a three bus, three generator system for illustrative purposes.
Ancillary services; Operating reserve; Competitive framework; Availability; Hydraulic generation
