Enabling inter-area reserve exchange through stable benefit allocation mechanisms

The establishment of a single European day-ahead market has accomplished the integration regional markets. However, reserve provision and activation remain an exclusive responsibility operators. This limited spatial coordination separated structure hinder efficient utilization flexible generation transmission, since their capacities have to be ex-ante allocated between energy reserves. To promote exchange, recent work proposed preemptive model that withdraws portion inter-area transmission capacity available from for reserves by minimizing expected system cost. decision-support tool, formulated as stochastic bilevel program, respects current architecture but does not suggest area-specific costs guarantee sufficient benefits areas accept solution. this end, we formulate in framework allows application game theory methods obtain stable benefit allocation, i.e., outcome immune coalitional deviations ensuring willingness coordinate. We show allocation mechanisms can either at or real-time stages, order distribute scenario-specific benefits, respectively. For both games, achieve minimal stability violation, while allowing tractable computation with queries program. Our case studies, based on illustrative more realistic test case, compare our method well-studied allocations, namely, Shapley value nucleolus, analyze factors drive these allocations (e.g., flexibility, network structure, wind correlations). performs better tractability.