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Market equilibria and interactions between strategic generation, wind, and storage

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  • Shahmohammadi, Ali
  • Sioshansi, Ramteen
  • Conejo, Antonio J.
  • Afsharnia, Saeed

Abstract

Rising wind penetrations can suppress wholesale energy prices by displacing higher-cost conventional generation from the merit order. Wind suffers disproportionately from this price suppression, because the price is most suppressed when wind availability is high, hindering wind-investment incentives. One way to mitigate this price suppression is by wind exercising market power, which introduces efficiency losses. An alternative is to use energy storage, which allows energy to be stored when wind availability is high. This stored energy is later discharged when wind availability is lower and prices are higher.

Suggested Citation

  • Shahmohammadi, Ali & Sioshansi, Ramteen & Conejo, Antonio J. & Afsharnia, Saeed, 2018. "Market equilibria and interactions between strategic generation, wind, and storage," Applied Energy, Elsevier, vol. 220(C), pages 876-892.
    • Handle: RePEc:eee:appene:v:220:y:2018:i:c:p:876-892
    DOI: 10.1016/j.apenergy.2017.10.035
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    5. Aryani, Morteza & Ahmadian, Mohammad & Sheikh-El-Eslami, Mohammad-Kazem, 2020. "Designing a regulatory tool for coordinated investment in renewable and conventional generation capacities considering market equilibria," Applied Energy, Elsevier, vol. 279(C).
    6. Dimitriadis, Christos N. & Tsimopoulos, Evangelos G. & Georgiadis, Michael C., 2022. "Strategic bidding of an energy storage agent in a joint energy and reserve market under stochastic generation," Energy, Elsevier, vol. 242(C).
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    8. Saeid Esmaeili & Amjad Anvari-Moghaddam & Shahram Jadid, 2019. "Optimal Operational Scheduling of Reconfigurable Multi-Microgrids Considering Energy Storage Systems," Energies, MDPI, vol. 12(9), pages 1-23, May.
    9. Tsimopoulos, Evangelos G. & Georgiadis, Michael C., 2021. "Nash equilibria in electricity pool markets with large-scale wind power integration," Energy, Elsevier, vol. 228(C).
    10. Shu, Kangan & Ai, Xiaomeng & Fang, Jiakun & Yao, Wei & Chen, Zhe & He, Haibo & Wen, Jinyu, 2019. "Real-time subsidy based robust scheduling of the integrated power and gas system," Applied Energy, Elsevier, vol. 236(C), pages 1158-1167.
    11. Debia, Sébastien & Pineau, Pierre-Olivier & Siddiqui, Afzal S., 2019. "Strategic use of storage: The impact of carbon policy, resource availability, and technology efficiency on a renewable-thermal power system," Energy Economics, Elsevier, vol. 80(C), pages 100-122.

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