Investment Incentives in Competitive Electricity Markets
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Journal Title
Journal ISSN
Volume Title
A1 Alkuperäisartikkeli tieteellisessä aikakauslehdessä
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Date
2018
Major/Subject
Mcode
Degree programme
Language
en
Pages
23
1978-2000
1978-2000
Series
Applied Sciences (Switzerland), Volume 8, issue 10
Abstract
This paper presents the analysis of a novel framework of study and the impact of different market design criterion for the generation expansion planning (GEP) in competitive electricity market incentives, under variable uncertainties in a single year horizon. As investment incentives conventionally consist of firm contracts and capacity payments, in this study, the electricity generation investment problem is considered from a strategic generation company (GENCO) ′ s perspective, modelled as a bi-level optimization method. The first-level includes decision steps related to investment incentives to maximize the total profit in the planning horizon. The second-level includes optimization steps focusing on maximizing social welfare when the electricity market is regulated for the current horizon. In addition, variable uncertainties, on offering and investment, are modelled using set of different scenarios. The bi-level optimization problem is then converted to a single-level problem and then represented as a mixed integer linear program (MILP) after linearization. The efficiency of the proposed framework is assessed on the MAZANDARAN regional electric company (MREC) transmission network, integral to IRAN interconnected power system for both elastic and inelastic demands. Simulations show the significance of optimizing the firm contract and the capacity payment that encourages the generation investment for peak technology and improves long-term stability of electricity markets.Description
Keywords
capasity payment, firm contract, generation expansion planning, mathematical program with equilibrium constraints, strategic GENCO, uncertainty, investment incentives
Other note
Citation
Valinejad , J , Barforoshi , T , Marzband , M , Pouresmaeil , E , Godina , R & Catalão , J P S 2018 , ' Investment Incentives in Competitive Electricity Markets ' , Applied Sciences (Switzerland) , vol. 8 , no. 10 , pp. 1978-2000 . https://doi.org/10.3390/app8101978
