Energy Resource Scheduling Policy Studies in the PJM Electricity Market: A Dynamic Programming Approach

Abstract

This thesis tackles the energy resource allocation problem in the PJM Electricity markets by creating a backward dynamic program to derive an optimal purchase pol- icy function. Generators that provide electric energy within the PJM Interconnection region have a wide range of noti cation times and marginal operational costs. Load serving entities that provide electricity to residential and commercial consumers need to obtain energy from these generating sources at optimal amounts in the day-ahead market. One of PJM Interconnection's responsibilities as an overseer of the ow of electricity is to continuously solve this energy resource scheduling problem; it needs to determine when and how much electric power should be transferred from these generators given the costs of use and the time constraints in order meet a certain demand and ensure the overall reliability of the electric system. This thesis explores the fascinating behaviors of the purchasing environment under di erent settings and assumptions, and compares the dynamic programming policy with a generic policy function approximation that is based on a demand forecast.