Impact of Unit Commitment and RoCoF Constraints on Revenue Sufficiency in Decarbonising Wholesale Electricity Markets

This paper examines the impact of unit commitment (UC) and rate of change of frequency (RoCoF) constraints on the performance and revenue sufficiency of decarbonising wholesale electricity markets. Different environmental policy and cost inputs are first used to produce increasingly decarbonised fleets with large differences in the uptake of wind, solar and flexible plant by using generation expansion (GE) planning without either of these constraints. The performance of these fleets is then assessed with and without UC and RoCoF constraints in a conventional economic dispatch (ED) framework.It is found that conventional GE planning tools without UC and RoCoF constraints should produce fleets that can transact via an efficient wholesale market if there is less than approximately 40% wind and 20% solar PV by annual generation. In this case, system average costs should match average prices, all generating units’ internal rates of return should match the cost of capital used in the GE plan and costs to consumers should be minimised. However, the inclusion of UC, RoCoF and potentially other reliability and security considerations may be required in GE planning tools beyond these approximate limits of renewable generation, with greater deployment of flexible plant including energy storage not necessarily solving the observed problems.