  New resource mix, e.g., renewable resources, are imposing operational
complexities to modern power systems by intensifying uncertainty and
variability in the system net load. This issue has motivated independent system
operators (ISOs), e.g., California ISO (CAISO), to add the flexible ramping
product (FRP) to their day-ahead (DA) market models. Such structural changes in
the DA market formulation require further analyses and detailed design to
ensure adequate operational flexibility, market efficiency, and reliability.
This paper conducts a comprehensive study to: (a) augment existing DA market
models with enhanced FRP design in order to schedule ramp capabilities that are
more adaptive with respect to the real-time (RT) condition, and (b) design
corresponding market payment policies that accurately reflect the value of the
added flexibility through enhanced FRP design. The proposed FRP design can be
implemented in present-day system operations with minimal disruption to
existing DA market models. Performance of the proposed DA market model, which
includes the enhanced FRP design, is compared against the DA market model with
existing FRP design through a validation methodology based on RT unit
commitment model. This validation methodology mimics fifteen-minute market of
CAISO. The proposed method is tested on an IEEE 118-bus test system.
