Imperfect Competition in Markets for Short-Circuit Current Services

TL;DR

The paper tackles the challenge of securing adequate Short-Circuit Current (SCC) in grids with high inverter-based resource (IBR) penetration by formulating a SCC-constrained market as a bilevel optimization problem. A primal-dual reformulation addresses the non-convex lower-level unit-commitment (UC) decisions, enabling tractable analysis of strategic bidding in SCC markets. Case studies on a modified IEEE 30-bus system demonstrate that strategically positioned Synchronous Generators (SGs) can extract up to roughly triple SCC revenues and raise consumer payments, especially when multiple strategic units cluster near a critical SCC location. The findings underscore significant market-power risks in SCC services and point to design and technical countermeasures, such as installing synchronous condensers, to preserve secure and efficient SCC provisioning. Overall, the work provides a first systematic framework to study imperfect competition in SCC markets and offers guidance for market design and grid investment decisions.

Abstract

An important limitation of Inverter-Based Resources (IBR) is their reduced contribution to Short-Circuit Current (SCC), as compared to that of Synchronous Generators (SGs). With increasing penetration of IBR in most power systems, the reducing SCC poses challenges to a secure system operation, as line protections may not trip when required. In order to address this issue, the SCC ancillary service could be procured via an economic mechanism, aiming at securing adequate SCC on all buses. However, the suitability of markets for SCC services is not well understood, given that these could be prone to market-power issues: since the SCC contributions from various SGs to a certain bus are determined by the electrical topology of the grid, this is a highly local service. It is necessary to understand if SGs at advantageous electrical locations could exert market power and, if so, how it could be mitigated. In order to fill this gap, this paper adopts an SCC-constrained bilevel model to investigate strategic behaviors of SGs. To address the non-convexity due to unit commitment variables, the model is restructured through a primal-dual formulation. Based on a modified IEEE 30-bus system, cases with strategic SGs placed at different buses are analyzed. These studies demonstrate that agents exerting market power could achieve up to triple revenues from SCC provision, highlighting the need to carefully design these markets.

Figures (6)

• Figure 1: Modified IEEE 30-bus system.
• Figure 2: Minimum SCC levels in all buses with and without explicit constraints.
• Figure 3: Marginal service prices for units providing SCC to critical buses in one-day operation. Prices in other cases are always zero, therefore not shown.
• Figure 4: Shadow prices of SCC constraints for bus 26 and bus 30 when two strategic SGs are placed in a single bus. The price for bus 29 is zero, so not graphically shown.
• Figure 5: UC status of relevant SGs in cases '2$\hat{g}$-$b$5' (left) and '2$\hat{g}$-$b$27' (right). In these two cases, 2$\check{g}$-$b$2, 2$\check{g}$-$b$3 are always online, while 2$\check{g}$-$b$30 keep offline. $\bullet$: Online; $\bullet$: Offline.