ABSTRACT To improve efficiency and stability amid rising demand, developed nations optimise energy and reserves jointly, addressing renewable intermittency and outages. In contrast, developing countries like Pakistan rely on merit‐order dispatch and experiential reserves, lacking optimal modelling. This research proposes multi‐period unit commitment for Pakistan's grid, using the MATPOWER Optimal Scheduling Tool on a 114‐bus model with seasonal/hourly load and renewable profiles. The solution delivers least‐cost day‐ahead energy/reserve schedules, ensuring reliability for contingencies and frequency regulation. Capacity payments for excess generation are criticised for fuelling Pakistan's circular debt, but this study finds ∼36% of excess capacity is essential for spinning and regulation reserves. It also introduces hourly variable reserve pricing as an alternative to fixed capacity charges, with max prices of 65. 36/MW (upward spinning), 63. 05/MW (downward spinning), 11. 19/MW (upward regulation), and 23. 72/MW (downward regulation). These dynamic signals could reshape Pakistan's capacity market, balancing cost and grid reliability.
Haq et al. (Thu,) studied this question.