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Equilibrium strategy based policy shifts towards the integration of wind power in spot electricity markets: A perspective from China

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  • Liu, Tingting
  • Xu, Jiuping

Abstract

As part of China's power industry reforms, developing appropriate market designs for the inclusion of renewable energy in the electricity spot market has been an ongoing challenge. This paper examined the effects of different market rules on wind power producer behavior to identify the policy implications for a renewable-friendly spot market, for which a market equilibrium model was developed to assess power transactions in the day-ahead and balancing markets, with the upper level being wind power producers seeking the best profits, and the lower level being the market clearing process to minimize generation costs. A case study is given, in which different scenarios are explored to assess the effects of bidding regulations and imbalance pricing mechanisms and to simulate the rising wind penetration in power systems. It was found that in the region modeled: more relaxed bidding regulations could provide wind producers incentives by allowing more profitable strategies; the imbalance pricing settings influence market results and producer revenues; and lower spot prices and power generation costs occur if a larger wind share was fed into the power system and could result in a unit revenue decline. Therefore, new policy directions are needed for the development of China's renewable-friendly electricity markets.

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  • Liu, Tingting & Xu, Jiuping, 2021. "Equilibrium strategy based policy shifts towards the integration of wind power in spot electricity markets: A perspective from China," Energy Policy, Elsevier, vol. 157(C).
    • Handle: RePEc:eee:enepol:v:157:y:2021:i:c:s0301421521003529
    DOI: 10.1016/j.enpol.2021.112482
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    4. Shuangquan Liu & Yanxuan Huang & Yue Wang & Qizhuan Shao & Han Zhou & Jinwen Wang & Cheng Chen, 2023. "Incentive Mechanisms to Integrate More Renewable Energy in Electricity Markets in China," Energies, MDPI, vol. 16(18), pages 1-16, September.
    5. Zhou, Xiaoxiao & Lin, Junjie & Wang, Lu & Huang, Hongyun & Zhao, Xin, 2022. "Wind power resources and China's sustainable development roadmap: Evidence from China," Resources Policy, Elsevier, vol. 79(C).
    6. Liu, Tingting & Chen, Zhe & Xu, Jiuping, 2022. "Empirical evidence based effectiveness assessment of policy regimes for wind power development in China," Renewable and Sustainable Energy Reviews, Elsevier, vol. 164(C).
    7. Zhou, Dequn & Zhang, Yining & Wang, Qunwei & Ding, Hao, 2024. "How do uncertain renewable energy induced risks evolve in a two-stage deregulated wholesale power market," Applied Energy, Elsevier, vol. 353(PB).
    8. Tahir, Muhammad Usman & Siraj, Kiran & Ali Shah, Syed Faizan & Arshad, Naveed, 2023. "Evaluation of single-phase net metering to meet renewable energy targets: A case study from Pakistan," Energy Policy, Elsevier, vol. 172(C).

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