Stochastic Interchange Scheduling in the Real-Time Electricity Market

The problem of multi-area interchange scheduling in the presence of stochastic generation and load is considered. A new interchange scheduling technique based on a two-stage stochastic minimization of overall expected operating cost is proposed. Because directly solving the stochastic optimization is intractable, an equivalent problem that maximizes the expected social welfare is formulated. The proposed technique leverages the operator's capability of forecasting locational marginal prices (LMPs) and obtains the optimal interchange schedule without iterations among operators.