Redesigning Capacity Market to Include Flexibility Via Ramp Constraints in High-Renewable Penetrated System


Capacity markets can co-exist alongside the energy and ancillary markets to ensure the medium-term and long-term supply adequacy by remunerating the generation resources for their availability. With the substantially increasing deployment of renewable generation, the system needs more flexibility to quickly mitigate the variability and uncertainty caused by the renewable generation. However, the present capacity market model does not differentiate the flexibility of generating units, so it might not give appropriate pricing signals to more flexible units that are usually more expensive. This is particularly important considering the increasing penetration levels of renewable generation on the electric grid, which increases the need for flexible units. This paper proposes a novel capacity market model considering flexibility requirement (FR) under the high penetration levels of renewable generation. Therefore, the proposed model can give the market-clearing price (MCP) for not only peak load generation capacity but also flexibility requirement. Thus, flexible units will tend to receive more economic incentives than non-flexible units. In the case studies, the profitability of different generation resources under the proposed capacity market model is analyzed and compared to the present capacity market model. The results show that the proposed method can maintain system reliability with regard to both peak load and flexibility requirement efficiently.


Electrical and Computer Engineering

Research Center/Lab(s)

Intelligent Systems Center


National Renewable Energy Laboratory, Grant DE-AC36-08GO28308

Keywords and Phrases

Capacity Market; Flexibility; Generation Investment; Solar Power; System Reliability; Wind Power

International Standard Serial Number (ISSN)


Document Type

Article - Journal

Document Version


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© 2021 Elsevier, All rights reserved.

Publication Date

01 Jun 2021