PROJECT TITLE :
Capacity Adequacy and Revenue Sufficiency in Electricity Markets With Wind Power
We gift a computationally economical mixed-integer program (MIP) that determines optimal generator enlargement decisions, furthermore periodic unit commitment and dispatch. The model is applied to investigate the impact of accelerating wind power capability on the optimal generation combine and therefore the profitability of thermal generators. In a very case study, we notice that increasing wind penetration reduces energy costs whereas the costs for operating reserves increase. Moreover, scarcity pricing for operating reserves through reserve shortfall penalties significantly impacts the costs and profitability of thermal generators. Without scarcity pricing, no thermal units are profitable, however scarcity pricing can guarantee profitability for peaking units at high wind penetration levels. Capability payments can additionally ensure profitability, however the payments required for baseload units to interrupt even increase with the number of wind power. The results indicate that baseload units are most likely to expertise revenue sufficiency problems when wind penetration increases and new baseload units are only developed when natural gas prices are high and wind penetration is low.
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