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Study on Market-Based Trading Strategies for Biomass Power Generation Participation in Microgrid Systems

Author

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  • Weiwei Yu

    (Engineering Research Center for Renewable Energy Generation and Grid Integration, Ministry of Education, Xinjiang University, Urumqi 830017, China)

  • Weiqing Wang

    (Engineering Research Center for Renewable Energy Generation and Grid Integration, Ministry of Education, Xinjiang University, Urumqi 830017, China)

  • Xiaozhu Li

    (Engineering Research Center for Renewable Energy Generation and Grid Integration, Ministry of Education, Xinjiang University, Urumqi 830017, China)

Abstract

The Chinese government places significant importance on biomass energy due to its renewable and environmentally friendly attributes. However, the high cost of power generation poses a considerable hurdle to its development. This study aims to address the challenges facing the profitability and sustainable development of biomass power generation after the gradual withdrawal of the Chinese government by proposing a day-ahead real-time market-based trading strategy. It is prompted by the incentives offered by the Chinese government for the ongoing power market reform. This strategy is developed for a microgrid system that integrates biomass power generation with other renewable energy sources. The principles followed by the microgrid system include self-generation and consumption, electricity surplus sales, and electricity shortfall procurement. During the day-ahead stage, peak and valley tariffs are decided by the microgrid operator to exert influence on the incentives of capacity providers in accordance with the load trends, while in the intraday stage, the supply-demand imbalance is resolved by the stored electricity. In the trading process, marginal production and marginal pricing are specified to ensure the minimum trading volume and price for capacity traders, ensuring their profitability. It is demonstrated in this study that the trading strategy presented is more effective than conventional fixed-price trading in making biomass power generation profitable and sustainable, even after the Chinese government subsidy is phased out. Moreover, the other participant in the microgrid system can boost their earnings when compared to generating power individually for trading.

Suggested Citation

  • Weiwei Yu & Weiqing Wang & Xiaozhu Li, 2023. "Study on Market-Based Trading Strategies for Biomass Power Generation Participation in Microgrid Systems," Energies, MDPI, vol. 16(23), pages 1-20, November.
    • Handle: RePEc:gam:jeners:v:16:y:2023:i:23:p:7830-:d:1289807
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    References listed on IDEAS

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    1. Natarianto Indrawan & Betty Simkins & Ajay Kumar & Raymond L. Huhnke, 2020. "Economics of Distributed Power Generation via Gasification of Biomass and Municipal Solid Waste," Energies, MDPI, vol. 13(14), pages 1-18, July.
    2. W. A. M. A. N. Illankoon & Chiara Milanese & Alessandro Girella & Puhulwella G. Rathnasiri & K. H. M. Sudesh & Maria Medina Llamas & Maria Cristina Collivignarelli & Sabrina Sorlini, 2022. "Agricultural Biomass-Based Power Generation Potential in Sri Lanka: A Techno-Economic Analysis," Energies, MDPI, vol. 15(23), pages 1-18, November.
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