Electricity market design for generator revenue sufficiency with increased variable generation
- Argonne National Lab. (ANL), Lemont, IL (United States)
Here, we present a computationally efficient mixed-integer program (MIP) that determines optimal generator expansion decisions, and hourly unit commitment and dispatch in a power system. The impact of increasing wind power capacity on the optimal generation mix and generator profitability is analyzed for a test case that approximates the electricity market in Texas (ERCOT). We analyze three market policies that may support resource adequacy: Operating Reserve Demand Curves (ORDC), Fixed Reserve Scarcity Prices (FRSP) and fixed capacity payments (CP). Optimal expansion plans are comparable between the ORDC and FRSP implementations, while capacity payments may result in additional new capacity. The FRSP policy leads to frequent reserves scarcity events and corresponding price spikes, while the ORDC implementation results in more continuous energy prices. Average energy prices decrease with increasing wind penetration under all policies, as do revenues for baseload and wind generators. Intermediate and peak load plants benefit from higher reserve prices and are less exposed to reduced energy prices. All else equal, an ORDC approach may be preferred to FRSP as it results in similar expansion and revenues with less extreme energy prices. A fixed CP leads to additional new flexible NGCT units, but lower profits for other technologies.
- Research Organization:
- Argonne National Laboratory (ANL), Argonne, IL (United States)
- Sponsoring Organization:
- USDOE Office of Energy Efficiency and Renewable Energy (EERE)
- Grant/Contract Number:
- AC02-06CH11357
- OSTI ID:
- 1236951
- Alternate ID(s):
- OSTI ID: 1247814
- Journal Information:
- Energy Policy, Vol. 87, Issue C; ISSN 0301-4215
- Publisher:
- ElsevierCopyright Statement
- Country of Publication:
- United States
- Language:
- English
Web of Science
Asymmetric risk and fuel neutrality in electricity capacity markets
|
journal | October 2019 |
Power system flexibility: an overview of emergence to evolution
|
journal | May 2019 |
Transition towards higher penetration of renewables: an overview of interlinked technical, environmental and socio-economic challenges
|
journal | August 2018 |
The entry and exit game in the electricity markets: a mean-field game approach | preprint | January 2020 |
Similar Records
A Technical and Economic Assessment of LWR Flexible Operation for Generation and Demand Balancing to Optimize Plant Revenue
Impact of Market Behavior, Fleet Composition, and Ancillary Services on Revenue Sufficiency