Effects of Transmission Congestion on Different Incentive Policies for Renewable Energy

AbstractThis paper analyzes the effects of relieving power transmission congestion to encourage the development of renewable energy (RE) under different regulatory policies. The present model is based on Cournot competition and incorporates uncertainty and the variability of both renewable resources and demand. Transmission congestion particularly affects the development of RE under subsidy policies (feed-in tariff and premium payment). By investing in flexible AC transmission system (FACTS) and/or other devices that increase transmission capacity, all policies have positive incentives from the social perspective. From a private perspective, the tax policy does not provide sufficient incentives. Higher levels of transmission investment are obtained from a social perspective than from a private perspective. Finally, the existence of multiple equilibria affects the resulting social welfare and market outcomes. In particular, CO2 emissions and social welfare may significantly vary from equilibrium to equilib...

[1]  Enzo Sauma,et al.  Multiple Equilibria in Oligopolistic Power Markets with Feed-in Tariff Incentives for Renewable Energy Generation , 2015, 2015 48th Hawaii International Conference on System Sciences.

[2]  M. Saguan,et al.  Impact of the regulatory framework for transmission investments on the cost of renewable energy in the EU , 2014 .

[3]  Pierre-Olivier Pineau,et al.  Influence of wind power on hourly electricity prices and GHG (greenhouse gas) emissions: Evidence that congestion matters from Ontario zonal data , 2014 .

[4]  Martin Greiner,et al.  Transmission needs across a fully renewable European power system , 2013, 1306.1079.

[5]  John Foster,et al.  Australian renewable energy policy: Barriers and challenges , 2013 .

[6]  Yao Jian-gang,et al.  A new method for secured optimal power flow under normal and network contingencies via optimal location of TCSC , 2013 .

[7]  Andreas Schroeder,et al.  The integration of renewable energies into the German transmission grid—A scenario comparison , 2013 .

[8]  Dietmar Lindenberger,et al.  The role of grid extensions in a cost-efficient transformation of the European electricity system until 2050 , 2013 .

[9]  Enzo Sauma,et al.  If you build it, he will come: Anticipative power transmission planning , 2013 .

[10]  J. Contreras,et al.  A Three-Level Static MILP Model for Generation and Transmission Expansion Planning , 2013, IEEE Transactions on Power Systems.

[11]  Enzo Sauma,et al.  Approximations in power transmission planning: implications for the cost and performance of renewable portfolio standards , 2013 .

[12]  Henrik Klinge Jacobsen,et al.  Cooperation Mechanisms To Achieve Eu Renewable Targets , 2014 .

[13]  Enzo Sauma,et al.  Impact of high wind power penetration on transmission network expansion planning , 2012 .

[14]  John P. Rice,et al.  Developing renewable energy supply in Queensland, Australia: A study of the barriers, targets, policies and actions , 2012 .

[15]  Ahad Kazemi,et al.  Social welfare maximization with fuzzy based genetic algorithm by TCSC and SSSC in double-sided auction market , 2012, Sci. Iran..

[16]  Glen Wright,et al.  Facilitating efficient augmentation of transmission networks to connect renewable energy generation: the Australian experience , 2012 .

[17]  Hamidreza Zareipour,et al.  Congestion management using demand response and FACTS devices , 2012 .

[18]  Florian Steinke,et al.  Transmission grid extensions for the integration of variable renewable energies in Europe: Who benefits where? , 2012 .

[19]  Florian Steinke,et al.  Parametric study of variable renewable energy integration in Europe: Advantages and costs of transmission grid extensions , 2012 .

[20]  P. Pinson,et al.  A Transmission-Cost-Based Model to Estimate the Amount of Market-Integrable Wind Resources , 2012, IEEE Transactions on Power Systems.

[21]  Shmuel S. Oren,et al.  The impact of carbon cap and trade regulation on congested electricity market equilibrium , 2011 .

[22]  Frank A. Felder,et al.  Examining Electricity Price Suppression Due to Renewable Resources and Other Grid Investments , 2011 .

[23]  Amol Phadke,et al.  Exploration of Resource and Transmission Expansion Decisions in the Western Renewable Energy Zone Initiative , 2011 .

[24]  E. Kahn.  Wind integration studies: optimization vs. Simulation , 2010 .

[25]  Renewable Portfolio Standards, Greenhouse Gas Reduction, and Long-Line Transmission Investments in the WECC , 2009 .

[26]  Kevin Porter,et al.  Moving Beyond Paralysis: How States and Regions Are Creating Innovative Transmission Policies for Renewable Energy Projects , 2009 .

[27]  S. Oren,et al.  Economic Criteria for Planning Transmission Investment in Restructured Electricity Markets , 2007, IEEE Transactions on Power Systems.

[28]  Naresh Acharya,et al.  Influence of TCSC on congestion and spot price in electricity market with bilateral contract , 2007 .

[29]  Nadarajah Mithulananthan,et al.  A proposal for investment recovery of FACTS devices in deregulated electricity markets , 2007 .

[30]  Jacek B. Krawczyk,et al.  NIRA-3: An improved MATLAB package for finding Nash equilibria in infinite games , 2006 .

[31]  J. Krawczyk,et al.  Numerical solutions to Nash-Cournot equilibria in coupled constraint electricity markets , 2004, IEEE Transactions on Power Systems.

[32]  Stan Uryasev,et al.  Relaxation algorithms to find Nash equilibria with economic applications , 2000 .

[33]  Robert B. Wilson,et al.  Research Paper Series Graduate School of Business Stanford University Architecture of Power Markets Architecture of Power Markets 1 , 2022 .

[34]  P. Klemperer,et al.  Supply Function Equilibria in Oligopoly under Uncertainty , 1989 .