Chapter 5

ILLUSTRATIVE SWING-CONTRACT RESERVE OFFERS

First published: 14 December 2020

Summary

Various swing-contract examples are used to illustrate, in concrete terms, the manner in which swing contracts could be formulated to meet the needs of wholesale power systems as currently structured and managed in the United States. Swing-contract implementation of standard supply offers used in the seven current US regional transmission organization/independent system operator-managed day-ahead markets are similar in form. For concreteness, this chapter focuses on the three-part supply offer formulation used by the Electric Reliability Council of Texas. These three-part supply offers can be implemented as firm step-function swing contracts providing swing (flexibility) in offered power-steps. A large portion of wholesale power trades in the United States are currently undertaken by means of privately negotiated physical bilateral contracts. The chapter considers how swing contracts can be formulated to facilitate the self-scheduling.

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