Recent changes in the fuel mix for electricity generation and, in particular,
the increase in Gas-Fueled Power Plants (GFPP), have created significant
interdependencies between the electrical power and natural gas transmission
systems. However, despite their physical and economic couplings, these networks
are still operated independently, with asynchronous market mechanisms. This
mode of operation may lead to significant economic and reliability risks in
congested environments as revealed by the 2014 polar vortex event experienced
by the northeastern United States. To mitigate these risks, while preserving
the current structure of the markets, this paper explores the idea of
introducing gas network awareness into the standard unit commitment model.
Under the assumption that the power system operator has some (or full)
knowledge of gas demand forecast and the gas network, the paper proposes a
tri-level mathematical program where natural gas zonal prices are given by the
dual solutions of natural-gas flux conservation constraints and commitment
decisions are subject to bid-validity constraints that ensure the economic
viability of the committed GFPPs. This tri-level program can be reformulated as
a single-level Mixed-Integer Second-Order Cone program which can then be solved
using a dedicated Benders decomposition. The approach is validated on a case
study for the Northeastern United States [1] that can reproduce the gas and
electricity price spikes experienced during the early winter of 2014. The
results on the case study demonstrate that gas awareness in unit commitment is
instrumental in avoiding the peaks in electricity prices while keeping the gas
prices to reasonable levels.