Inertia Pricing in Stochastic Electricity Markets

Maintaining the stability of renewable-dominant power systems requires procurement virtual inertia services from non-synchronous resources (e.g., batteries, wind turbines) in addition to traditionally provided by synchronous thermal generators). However, pricing provision has not been studied a stochastic electricity market, where uncertainty characteristics renewable energy sources (RES) are considered. To fill this research gap, paper formulates chance-constrained unit commitment model with requirements and computes equilibrium energy, reserve prices using convex duality. Numerical experiments on an illustrative system modified IEEE 118-bus show performance proposed mechanism. By allowing new providers contribute requirements, total operating cost reduces. Moreover, market internalizes RES uncertainty, which yields additional reductions co-optimizing procurement.