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A system dynamics approach for investigating impacts of incentive mechanisms on wind power investment

Author

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  • Alishahi, E.
  • Moghaddam, M. Parsa
  • Sheikh-El-Eslami, M.K.

Abstract

Large integration of intermittent wind generation in power system has necessitated the inclusion of more innovative and sophisticated approaches in power system investment planning. The intermittent nature and uncertainties of wind power generation will cause the investors encounter risk in their investment decisions. Main factors such as uncertainties in demand, fuel price, wind power generation which affect long-term planning have been considered in the proposed model. To overcome this problem i.e. risk impacts on decisions, this paper presents improved incentive mechanisms for wind power investment. The mechanism has been investigated based on system dynamics modeling. In the proposed mechanism, wind power generations will recover a part of their investment cost through incentive mechanisms. In this paper, different incentive methods some of which are dependent to market conditions are being proposed. The functionality of these incentive mechanisms on wind generation investment are illustrated by simulation studies.

Suggested Citation

  • Alishahi, E. & Moghaddam, M. Parsa & Sheikh-El-Eslami, M.K., 2012. "A system dynamics approach for investigating impacts of incentive mechanisms on wind power investment," Renewable Energy, Elsevier, vol. 37(1), pages 310-317.
    • Handle: RePEc:eee:renene:v:37:y:2012:i:1:p:310-317
    DOI: 10.1016/j.renene.2011.06.026
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    References listed on IDEAS

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