Publications

Uncovering New Opportunities from Frequency Regulation Markets with Dynamic Optimization and Pyomo.DAE

Dowling, Alexander W.; Nicholson, Bethany L.

Real-time energy pricing has caused a paradigm shift for process operations with flexibility becoming a critical driver of economics. As such, incorporating real-time pricing into planning and scheduling optimization formulations has received much attention over the past two decades (Zhang and Grossman, 2016). These formulations, however, focus on 1-hour or longer time discretizations and neglect process dynamics. Recent analysis of historical price data from the California electricity market (CAISO) reveals that a majority of economic opportunities come from fast market layers, i.e., real-time energy market and ancillary services (Dowling et al., 2017). We present a dynamic optimization framework to quantify the revenue opportunities of chemical manufacturing systems providing frequency regulation (FR). Recent analysis of first order systems finds that slow process dynamics naturally dampen high frequency harmonics in FR signals (Dowling and Zavala, 2017). As a consequence, traditional chemical processes with long time constants may be able to provide fast flexibility without disrupting product quality, performance of downstream unit operations, etc. This study quantifies the ability of a distillation system to provide sufficient dynamic flexibility to adjust energy demands every 4 seconds in response to market signals. Using a detailed differential algebraic equation (DAE) model (Hahn and Edgar, 2002) and historic data from the Texas electricity market (ECROT), we estimate revenue opportunities for different column designs. We implement our model using the algebraic modeling language Pyomo (Hart et al., 2011) and its dynamic optimization extension Pyomo.DAE (Nicholson et al., 2017). These software packages enable rapid development of complex optimization models using high-level modelling constructs and provide flexible tools for initializing and discretizing DAE models.