TY - JOUR
T1 - Generation expansion planning with renewable energy credit markets
T2 - A bilevel programming approach
AU - Nguyen, Hieu T.
AU - Felder, Frank A.
N1 - Funding Information:
The authors are particularly grateful to Yury Dvorkin and Jip Kim from the Tandon School of Engineering and Burcin Unel from the Wagner Graduate School of Public Service, New York University, for their important advice and constructive comments regarding our modeling approach. This work was supported by the National Science Foundation under Grant CMMI 1825225.
PY - 2020/10/15
Y1 - 2020/10/15
N2 - This paper presents a novel generation expansion planning (GEP) problem that integrates the renewable energy market to power system operations. We consider the gaining prominence for renewable energy credits (REC) used to implement renewable portfolio standards, a politically popular policy employed in many US states. The overall problem is formulated as a bilevel optimization where the offering prices, supplies, and demands in the REC markets are considered as functions of power system optimal operations. The problem is solved effectively by the proposed combination of the Karush-Kuhn-Tucker (KKT) reformulation method and the fixed point iterative algorithm. Key findings on the impacts of renewable energy policies on GEP solutions such as the merit order effect, the changes of retail electricity prices, and the RPS dilution, which are consistent with observations, are presented. Our model provides an effective framework for evaluating the long-term impacts of renewable energy policies.
AB - This paper presents a novel generation expansion planning (GEP) problem that integrates the renewable energy market to power system operations. We consider the gaining prominence for renewable energy credits (REC) used to implement renewable portfolio standards, a politically popular policy employed in many US states. The overall problem is formulated as a bilevel optimization where the offering prices, supplies, and demands in the REC markets are considered as functions of power system optimal operations. The problem is solved effectively by the proposed combination of the Karush-Kuhn-Tucker (KKT) reformulation method and the fixed point iterative algorithm. Key findings on the impacts of renewable energy policies on GEP solutions such as the merit order effect, the changes of retail electricity prices, and the RPS dilution, which are consistent with observations, are presented. Our model provides an effective framework for evaluating the long-term impacts of renewable energy policies.
KW - Bilevel optimization
KW - Generation expansion planning
KW - REC market
KW - Renewable energy policies
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U2 - 10.1016/j.apenergy.2020.115472
DO - 10.1016/j.apenergy.2020.115472
M3 - Article
AN - SCOPUS:85088112074
VL - 276
JO - Applied Energy
JF - Applied Energy
SN - 0306-2619
M1 - 115472
ER -