IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v10y2018i2p298-d128447.html
   My bibliography  Save this article

Wind Power Development and Energy Storage under China’s Electricity Market Reform—A Case Study of Fujian Province

Author

Listed:
  • Dunguo Mou

    (School of Economics, Xiamen University, Xiamen 361005, China)

Abstract

This paper, based on the Fujian provincial 500 kV grid and part of the 220 kV grid and the key power plants, including hydro, coal, nuclear, gas, wind and pumping and storage hydro powers (PSHP) connected to the grid, constructs an independent electricity market model. Using data that are very close to reality about coal fired power production costs, along with data about power plants’ technical constraints, this paper studies the effect of wind power on Fujian’s provincial electricity market. Firstly, the paper analyzes the relationship between wind speed and wind power output and the effects of short-term power output fluctuation on frequency modulation and voltage regulation. Secondly, under supposition of the production costs following quadratic functions, the paper analyzes the effects of changes in wind power output on the electricity supply costs under optimal power flow. Thirdly, using the bidding model in the Australian Electricity Market Operator for reference and supposing that, in a competitive market, coal fired power plants can bid 6 price bands according to their capacity, the paper analyzes effects of wind power on electricity prices under optimal power flow, the stabilizing effects of PSHP and the minimum PSHP capacity needed to stabilize the electricity market. Finally, using a daily load curve, this paper simulates the electricity prices’ fluctuation under optimal power flow and PSHP’s stabilizing effect. The results show that, although PSHP has a large external social welfare effect, it can hardly make a profit. In the end, this paper puts forward some policy suggestions for Fujian province’s wind and nuclear power development, PSHP construction and electricity market development.

Suggested Citation

  • Dunguo Mou, 2018. "Wind Power Development and Energy Storage under China’s Electricity Market Reform—A Case Study of Fujian Province," Sustainability, MDPI, vol. 10(2), pages 1-20, January.
    • Handle: RePEc:gam:jsusta:v:10:y:2018:i:2:p:298-:d:128447
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/10/2/298/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/10/2/298/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Horsley, Anthony & Wrobel, Andrew J., 2002. "Efficiency rents of pumped-storage plants and their uses for operation and investment decisions," Journal of Economic Dynamics and Control, Elsevier, vol. 27(1), pages 109-142, November.
    2. Huber, Matthias & Dimkova, Desislava & Hamacher, Thomas, 2014. "Integration of wind and solar power in Europe: Assessment of flexibility requirements," Energy, Elsevier, vol. 69(C), pages 236-246.
    3. Behnam Zakeri & Samuli Rinne & Sanna Syri, 2015. "Wind Integration into Energy Systems with a High Share of Nuclear Power—What Are the Compromises?," Energies, MDPI, vol. 8(4), pages 1-35, March.
    4. Ogayar, B. & Vidal, P.G. & Hernandez, J.C., 2009. "Analysis of the cost for the refurbishment of small hydropower plants," Renewable Energy, Elsevier, vol. 34(11), pages 2501-2509.
    5. Nyamdash, Batsaikhan & Denny, Eleanor & O'Malley, Mark, 2010. "The viability of balancing wind generation with large scale energy storage," Energy Policy, Elsevier, vol. 38(11), pages 7200-7208, November.
    6. Oliveira, P. & McKee, S. & Coles, C., 1993. "Optimal scheduling of a hydro thermal power generation system," European Journal of Operational Research, Elsevier, vol. 71(3), pages 334-340, December.
    7. Deb, Rajat, 2000. "Operating Hydroelectric Plants and Pumped Storage Units in a Competitive Environment," The Electricity Journal, Elsevier, vol. 13(3), pages 24-32, April.
    8. Saarinen, Linn & Dahlbäck, Niklas & Lundin, Urban, 2015. "Power system flexibility need induced by wind and solar power intermittency on time scales of 1–14 days," Renewable Energy, Elsevier, vol. 83(C), pages 339-344.
    9. Yang, Chi-Jen & Jackson, Robert B., 2011. "Opportunities and barriers to pumped-hydro energy storage in the United States," Renewable and Sustainable Energy Reviews, Elsevier, vol. 15(1), pages 839-844, January.
    10. Mou, Dunguo, 2014. "Understanding China’s electricity market reform from the perspective of the coal-fired power disparity," Energy Policy, Elsevier, vol. 74(C), pages 224-234.
    11. Denny, E. & Tuohy, A. & Meibom, P. & Keane, A. & Flynn, D. & Mullane, A. & O'Malley, M., 2010. "The impact of increased interconnection on electricity systems with large penetrations of wind generation: A case study of Ireland and Great Britain," Energy Policy, Elsevier, vol. 38(11), pages 6946-6954, November.
    12. Shaker, Hamid & Zareipour, Hamidreza & Wood, David, 2016. "Impacts of large-scale wind and solar power integration on California׳s net electrical load," Renewable and Sustainable Energy Reviews, Elsevier, vol. 58(C), pages 761-774.
    13. Deane, J.P. & Ó Gallachóir, B.P. & McKeogh, E.J., 2010. "Techno-economic review of existing and new pumped hydro energy storage plant," Renewable and Sustainable Energy Reviews, Elsevier, vol. 14(4), pages 1293-1302, May.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Danyang Guo & Jilai Yu & Mingfei Ban, 2018. "Security-Constrained Unit Commitment Considering Differentiated Regional Air Pollutant Intensity," Sustainability, MDPI, vol. 10(5), pages 1-27, May.
    2. Mou, Dunguo & He, Xiaoping, 2019. "Developing large-scale energy storage to alleviate a low-carbon energy bubble," Energy Policy, Elsevier, vol. 132(C), pages 62-74.
    3. Zhang, M. & Yang, X.N., 2021. "Administrative framework barriers to energy storage development in China," Renewable and Sustainable Energy Reviews, Elsevier, vol. 148(C).
    4. Shuo Zhang & Li Chen & Yidan Zheng & Yingzi Li & Ying Li & Ming Zeng, 2021. "How Policies Guide and Promoted Wind Power to Market Transactions in China during the 2010s," Energies, MDPI, vol. 14(14), pages 1-24, July.
    5. Yanyue Wang & Guohua Fang, 2022. "Joint Operation Modes and Economic Analysis of Nuclear Power and Pumped Storage Plants under Different Power Market Environments," Sustainability, MDPI, vol. 14(15), pages 1-17, July.
    6. Mou, Dunguo & Wang, Zining, 2022. "A systematic analysis of integrating variable wind power into Fujian power grid," Energy Policy, Elsevier, vol. 170(C).

    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. Dunguo Mou, 2019. "Pumped storage hydro power’s function in the electricity market under the electricity deregulation background in China – A case study of Fujian province," Energy & Environment, , vol. 30(6), pages 951-968, September.
    2. Mou, Dunguo & He, Xiaoping, 2019. "Developing large-scale energy storage to alleviate a low-carbon energy bubble," Energy Policy, Elsevier, vol. 132(C), pages 62-74.
    3. Steffen, Bjarne & Weber, Christoph, 2013. "Efficient storage capacity in power systems with thermal and renewable generation," Energy Economics, Elsevier, vol. 36(C), pages 556-567.
    4. Lund, Peter D. & Lindgren, Juuso & Mikkola, Jani & Salpakari, Jyri, 2015. "Review of energy system flexibility measures to enable high levels of variable renewable electricity," Renewable and Sustainable Energy Reviews, Elsevier, vol. 45(C), pages 785-807.
    5. Connolly, D. & Lund, H. & Finn, P. & Mathiesen, B.V. & Leahy, M., 2011. "Practical operation strategies for pumped hydroelectric energy storage (PHES) utilising electricity price arbitrage," Energy Policy, Elsevier, vol. 39(7), pages 4189-4196, July.
    6. Connolly, D. & Lund, H. & Mathiesen, B.V. & Pican, E. & Leahy, M., 2012. "The technical and economic implications of integrating fluctuating renewable energy using energy storage," Renewable Energy, Elsevier, vol. 43(C), pages 47-60.
    7. Blanco, Herib & Faaij, André, 2018. "A review at the role of storage in energy systems with a focus on Power to Gas and long-term storage," Renewable and Sustainable Energy Reviews, Elsevier, vol. 81(P1), pages 1049-1086.
    8. Ciara O'Dwyer & L. (Lisa B.) Ryan & Damian Flynn, 2017. "Efficient large-scale energy storage dispatch: challenges in future high renewables systems," Open Access publications 10197/9103, School of Economics, University College Dublin.
    9. Pérez-Díaz, Juan I. & Chazarra, M. & García-González, J. & Cavazzini, G. & Stoppato, A., 2015. "Trends and challenges in the operation of pumped-storage hydropower plants," Renewable and Sustainable Energy Reviews, Elsevier, vol. 44(C), pages 767-784.
    10. Olabi, A.G. & Onumaegbu, C. & Wilberforce, Tabbi & Ramadan, Mohamad & Abdelkareem, Mohammad Ali & Al – Alami, Abdul Hai, 2021. "Critical review of energy storage systems," Energy, Elsevier, vol. 214(C).
    11. Steffen, Bjarne & Weber, Christoph, 2016. "Optimal operation of pumped-hydro storage plants with continuous time-varying power prices," European Journal of Operational Research, Elsevier, vol. 252(1), pages 308-321.
    12. McPherson, Madeleine & Johnson, Nils & Strubegger, Manfred, 2018. "The role of electricity storage and hydrogen technologies in enabling global low-carbon energy transitions," Applied Energy, Elsevier, vol. 216(C), pages 649-661.
    13. Durmaz, Tunç, 2016. "Precautionary Storage in Electricity Markets," Discussion Papers 2016/5, Norwegian School of Economics, Department of Business and Management Science.
    14. Ardizzon, G. & Cavazzini, G. & Pavesi, G., 2014. "A new generation of small hydro and pumped-hydro power plants: Advances and future challenges," Renewable and Sustainable Energy Reviews, Elsevier, vol. 31(C), pages 746-761.
    15. Abolhosseini, Shahrouz & Heshmati, Almas & Altmann, Jörn, 2014. "A Review of Renewable Energy Supply and Energy Efficiency Technologies," IZA Discussion Papers 8145, Institute of Labor Economics (IZA).
    16. Díaz-González, Francisco & Sumper, Andreas & Gomis-Bellmunt, Oriol & Villafáfila-Robles, Roberto, 2012. "A review of energy storage technologies for wind power applications," Renewable and Sustainable Energy Reviews, Elsevier, vol. 16(4), pages 2154-2171.
    17. Brunner, Christoph & Deac, Gerda & Braun, Sebastian & Zöphel, Christoph, 2020. "The future need for flexibility and the impact of fluctuating renewable power generation," Renewable Energy, Elsevier, vol. 149(C), pages 1314-1324.
    18. Barbaros, Efe & Aydin, Ismail & Celebioglu, Kutay, 2021. "Feasibility of pumped storage hydropower with existing pricing policy in Turkey," Renewable and Sustainable Energy Reviews, Elsevier, vol. 136(C).
    19. Ming, Zeng & Junjie, Feng & Song, Xue & Zhijie, Wang & Xiaoli, Zhu & Yuejin, Wang, 2013. "Development of China's pumped storage plant and related policy analysis," Energy Policy, Elsevier, vol. 61(C), pages 104-113.
    20. Cany, C. & Mansilla, C. & Mathonnière, G. & da Costa, P., 2018. "Nuclear contribution to the penetration of variable renewable energy sources in a French decarbonised power mix," Energy, Elsevier, vol. 150(C), pages 544-555.

    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:gam:jsusta:v:10:y:2018:i:2:p:298-:d:128447. 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: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    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.