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Enhanced operational reserve as a tool for development of optimal energy mix

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  • Wierzbowski, Michal
  • Filipiak, Izabela

Abstract

The aim of this article is to present a novel capacity remuneration mechanism concept that differentiates the level of financial support according to the technology and parameters of the new power plants. New power plants that are to be constructed should guarantee the highest level of security of electricity supply and be consistent with actual energy policy carried out by a country. Thus, the proposed remuneration system is based on an ‘operational reserve’ system which is currently implemented in Poland. The proposed system distinguishes new power generating assets according to a total assessment based on three factors: type of technology (including emission benchmark), flexibility, and location (addressing issue of brown or green field investment and conditions of power system operation). Existing power plants are also subsidized by the proposed mechanism, however their remuneration is not based on their characteristics. The details of the proposed mechanism, a cost analysis, and a standardized evaluation procedure are described in the paper. The concept itself is universal and can be intruded in every power system that must overcome capacity problem.

Suggested Citation

  • Wierzbowski, Michal & Filipiak, Izabela, 2017. "Enhanced operational reserve as a tool for development of optimal energy mix," Energy Policy, Elsevier, vol. 102(C), pages 602-615.
    • Handle: RePEc:eee:enepol:v:102:y:2017:i:c:p:602-615
    DOI: 10.1016/j.enpol.2016.12.048
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