Demand curtailment allocation in interconnected electricity markets

In interconnected electricity systems dominated by intermittent renewable generation, resource adequacy assessments need to consider cross-zonal and intertemporal dependencies. This calls for a decision-making mechanism that determines a fair and unique allocation of inevitable demand curtailment across space and time. Otherwise, traditional resource adequacy indicators like the loss of load expectation (LOLE) or the expected energy not supplied (EENS) become arbitrary on a national level. Against this background, we develop a framework for evaluating the spatial and temporal fairness of demand curtailment allocation. We then introduce two model formulations – a linearized approach and a post-processing approach – that allow to implement a demand curtailment allocation mechanism into any dispatch optimization model. Simulation results from a European-wide case study show that on an overall system level, both approaches substantially increase the spatial fairness of the demand curtailment allocation without significantly increasing the total EENS across all zones. However, only the linearized approach achieves a more fair temporal allocation across different time steps. The implications in an individual zone, e.g. Germany, are stark, which is illustrated by the LOLE varying between 12 and 116h/a as well as the EENS between 94.9 and 293.2GWh/a depending on the applied configuration.