IDEAS home Printed from https://ideas.repec.org/a/eee/appene/v88y2011i9p3239-3247.html
   My bibliography  Save this article

Wind power investment within a market environment

Author

Listed:
  • Baringo, L.
  • Conejo, A.J.

Abstract

Within an existing transmission network, this paper considers the problem of identifying the wind power plants to be built by a wind power investor to maximize its profit. For this analysis a future target year is considered and the loads at different buses are represented by stepwise load–duration curves. The stochastic nature of both load and wind is represented via scenarios. The considered electric energy system operates under a pool-market arrangement and each producer/consumer is paid/pays the Local Marginal Price (LMP) of the bus at which it is located. The higher the wind penetration is, the lower the resulting LMPs. To tackle this problem a stochastic bilevel model is proposed, whose upper-level represents the wind investment and operation decisions with the target of maximizing profits; and its lower-level represents the market clearing under differing load and wind conditions and provides LMPs. This model can be recast as a mixed-integer linear programming problem solvable using commercially available branch-and-cut solvers. The proposed model is illustrated using an example and two case studies.

Suggested Citation

  • Baringo, L. & Conejo, A.J., 2011. "Wind power investment within a market environment," Applied Energy, Elsevier, vol. 88(9), pages 3239-3247.
  • Handle: RePEc:eee:appene:v:88:y:2011:i:9:p:3239-3247
    DOI: 10.1016/j.apenergy.2011.03.023
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0306261911001802
    Download Restriction: Full text for ScienceDirect subscribers only

    File URL: https://libkey.io/10.1016/j.apenergy.2011.03.023?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Connolly, D. & Lund, H. & Mathiesen, B.V. & Leahy, M., 2010. "A review of computer tools for analysing the integration of renewable energy into various energy systems," Applied Energy, Elsevier, vol. 87(4), pages 1059-1082, April.
    2. De Jonghe, Cedric & Delarue, Erik & Belmans, Ronnie & D'haeseleer, William, 2011. "Determining optimal electricity technology mix with high level of wind power penetration," Applied Energy, Elsevier, vol. 88(6), pages 2231-2238, June.
    3. Benoît Colson & Patrice Marcotte & Gilles Savard, 2007. "An overview of bilevel optimization," Annals of Operations Research, Springer, vol. 153(1), pages 235-256, September.
    4. Kaldellis, J.K. & Kavadias, K.A. & Filios, A.E., 2009. "A new computational algorithm for the calculation of maximum wind energy penetration in autonomous electrical generation systems," Applied Energy, Elsevier, vol. 86(7-8), pages 1011-1023, July.
    5. Oliveira, Fernando, 2008. "The value of information in electricity investment games," Energy Policy, Elsevier, vol. 36(7), pages 2364-2375, July.
    6. Snyder, Brian & Kaiser, Mark J., 2009. "A comparison of offshore wind power development in europe and the U.S.: Patterns and drivers of development," Applied Energy, Elsevier, vol. 86(10), pages 1845-1856, October.
    7. Akdag, Seyit Ahmet & Güler, Önder, 2010. "Evaluation of wind energy investment interest and electricity generation cost analysis for Turkey," Applied Energy, Elsevier, vol. 87(8), pages 2574-2580, August.
    8. Frederic H. Murphy & Yves Smeers, 2005. "Generation Capacity Expansion in Imperfectly Competitive Restructured Electricity Markets," Operations Research, INFORMS, vol. 53(4), pages 646-661, August.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Blarke, Morten B., 2012. "Towards an intermittency-friendly energy system: Comparing electric boilers and heat pumps in distributed cogeneration," Applied Energy, Elsevier, vol. 91(1), pages 349-365.
    2. Grimm, Veronika & Schewe, Lars & Schmidt, Martin & Zöttl, Gregor, 2017. "Uniqueness of market equilibrium on a network: A peak-load pricing approach," European Journal of Operational Research, Elsevier, vol. 261(3), pages 971-983.
    3. Velo, R. & Osorio, L. & Fernández, M.D. & Rodríguez, M.R., 2014. "An economic analysis of a stand-alone and grid-connected cattle farm," Renewable and Sustainable Energy Reviews, Elsevier, vol. 39(C), pages 883-890.
    4. Soares M.C. Borba, Bruno & Szklo, Alexandre & Schaeffer, Roberto, 2012. "Plug-in hybrid electric vehicles as a way to maximize the integration of variable renewable energy in power systems: The case of wind generation in northeastern Brazil," Energy, Elsevier, vol. 37(1), pages 469-481.
    5. Güner, Yusuf Emre, 2018. "The improved screening curve method regarding existing units," European Journal of Operational Research, Elsevier, vol. 264(1), pages 310-326.
    6. Mendes, Carla & Soares, Isabel, 2014. "Renewable energies impacting the optimal generation mix: The case of the Iberian Electricity Market," Energy, Elsevier, vol. 69(C), pages 23-33.
    7. Darudi, Ali & Weigt, Hannes, 2019. "Renewable Support, Intermittency and Market Power: An Equilibrium Investment Approach," Working papers 2019/06, Faculty of Business and Economics - University of Basel.
    8. Ren'e Aid & Luciano Campi & Nicolas Langren'e & Huy^en Pham, 2012. "A probabilistic numerical method for optimal multiple switching problem and application to investments in electricity generation," Papers 1210.8175, arXiv.org.
    9. Han, Xingning & Chen, Xinyu & McElroy, Michael B. & Liao, Shiwu & Nielsen, Chris P. & Wen, Jinyu, 2019. "Modeling formulation and validation for accelerated simulation and flexibility assessment on large scale power systems under higher renewable penetrations," Applied Energy, Elsevier, vol. 237(C), pages 145-154.
    10. Koltsaklis, Nikolaos E. & Georgiadis, Michael C., 2015. "A multi-period, multi-regional generation expansion planning model incorporating unit commitment constraints," Applied Energy, Elsevier, vol. 158(C), pages 310-331.
    11. Haas, J. & Cebulla, F. & Cao, K. & Nowak, W. & Palma-Behnke, R. & Rahmann, C. & Mancarella, P., 2017. "Challenges and trends of energy storage expansion planning for flexibility provision in low-carbon power systems – a review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 80(C), pages 603-619.
    12. Ma, Huan & Sun, Qinghan & Chen, Lei & Chen, Qun & Zhao, Tian & He, Kelun & Xu, Fei & Min, Yong & Wang, Shunjiang & Zhou, Guiping, 2023. "Cogeneration transition for energy system decarbonization: From basic to flexible and complementary multi-energy sources," Renewable and Sustainable Energy Reviews, Elsevier, vol. 187(C).
    13. Li, Bei & Roche, Robin & Miraoui, Abdellatif, 2017. "Microgrid sizing with combined evolutionary algorithm and MILP unit commitment," Applied Energy, Elsevier, vol. 188(C), pages 547-562.
    14. Collins, Seán & Deane, John Paul & Poncelet, Kris & Panos, Evangelos & Pietzcker, Robert C. & Delarue, Erik & Ó Gallachóir, Brian Pádraig, 2017. "Integrating short term variations of the power system into integrated energy system models: A methodological review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 76(C), pages 839-856.
    15. N. Gülpınar & F. Oliveira, 2014. "Analysis of relationship between forward and spot markets in oligopolies under demand and cost uncertainties," Computational Management Science, Springer, vol. 11(3), pages 267-283, July.
    16. Vithayasrichareon, Peerapat & Riesz, Jenny & MacGill, Iain, 2017. "Operational flexibility of future generation portfolios with high renewables," Applied Energy, Elsevier, vol. 206(C), pages 32-41.
    17. Pineda, Salvador & Morales, Juan M. & Boomsma, Trine K., 2016. "Impact of forecast errors on expansion planning of power systems with a renewables target," European Journal of Operational Research, Elsevier, vol. 248(3), pages 1113-1122.
    18. Filomena, Tiago Pascoal & Campos-Náñez, Enrique & Duffey, Michael Robert, 2014. "Technology selection and capacity investment under uncertainty," European Journal of Operational Research, Elsevier, vol. 232(1), pages 125-136.
    19. Xiaohang Wang & Wentong Chong & Kokhoe Wong & Liphuat Saw & Sinchew Poh & Saihin Lai & Chin-Tsan Wang, 2018. "Preliminary Performance Tests and Simulation of a V-Shape Roof Guide Vane Mounted on an Eco-Roof System," Energies, MDPI, vol. 11(10), pages 1-33, October.
    20. Welsch, Manuel & Deane, Paul & Howells, Mark & Ó Gallachóir, Brian & Rogan, Fionn & Bazilian, Morgan & Rogner, Hans-Holger, 2014. "Incorporating flexibility requirements into long-term energy system models – A case study on high levels of renewable electricity penetration in Ireland," Applied Energy, Elsevier, vol. 135(C), pages 600-615.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:appene:v:88:y:2011:i:9:p:3239-3247. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/405891/description#description .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.