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Evaluating the impact of FIT financial burden on social welfare in renewable expansion planning

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  • Sadeghi, Hadi
  • Abdollahi, Amir
  • Rashidinejad, Masoud

Abstract

Generation expansion planning (GEP) is the problem of determining the optimal strategy to plan the construction of new generation plants while satisfying technical and economic constraints. Over the past few years, the environmental issues have become a society concern and the Clean Air Act Amendments passage the laws indicating the need for renewable resources promotion. Multifarious incentive-based support schemes have been designed to increase the penetration rate of the renewables in power generation. In this context, open questions remain regarding the financial resources of the support schemes. This paper addresses the impacts of Feed-In-Tariff (FIT) mechanism on the social welfare in an integrated renewable-conventional GEP framework, while consumers are considered for patronizing the financial burden of FIT (БFIT). Hence, after applying the gravitational search algorithm to a multistage GEP model, the benefit of generation company (GENCO) and consumer surplus are both determined as the social welfare terms. The virtual price criterion is also introduced to evaluate the effect of FIT expenditure on consumers' surplus. The numerical studies emphasize that implementation of FIT regime in the GEP results in social welfare improvement even if the БFIT is imposed on the demand-side consumers.

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  • Sadeghi, Hadi & Abdollahi, Amir & Rashidinejad, Masoud, 2015. "Evaluating the impact of FIT financial burden on social welfare in renewable expansion planning," Renewable Energy, Elsevier, vol. 75(C), pages 199-209.
    • Handle: RePEc:eee:renene:v:75:y:2015:i:c:p:199-209
    DOI: 10.1016/j.renene.2014.09.051
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    References listed on IDEAS

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    1. Sheikhhoseini, Mousa & Rashidinejad, Masoud & Ameri, Mehran & Abdollahi, Amir, 2018. "Economic analysis of support policies for residential photovoltaic systems in Iran," Energy, Elsevier, vol. 165(PA), pages 853-866.
    2. Sadeghi, Hadi & Rashidinejad, Masoud & Abdollahi, Amir, 2017. "A comprehensive sequential review study through the generation expansion planning," Renewable and Sustainable Energy Reviews, Elsevier, vol. 67(C), pages 1369-1394.
    3. Lingling Wang & Tsunemi Watanabe, 2016. "A Stackelberg Game Theoretic Analysis of Incentive Effects under Perceived Risk for China’s Straw-Based Power Plant Supply Chain," Energies, MDPI, vol. 9(6), pages 1-20, June.
    4. Chapman, Andrew J. & McLellan, Benjamin C. & Tezuka, Tetsuo, 2018. "Prioritizing mitigation efforts considering co-benefits, equity and energy justice: Fossil fuel to renewable energy transition pathways," Applied Energy, Elsevier, vol. 219(C), pages 187-198.
    5. Jadidoleslam, Morteza & Ebrahimi, Akbar & Latify, Mohammad Amin, 2017. "Probabilistic transmission expansion planning to maximize the integration of wind power," Renewable Energy, Elsevier, vol. 114(PB), pages 866-878.
    6. Hao, Peng & Guo, Jun-Peng & Chen, Yihsu & Xie, Bai-Chen, 2020. "Does a combined strategy outperform independent policies? Impact of incentive policies on renewable power generation," Omega, Elsevier, vol. 97(C).
    7. Scott, Ian J. & Botterud, Audun & Carvalho, Pedro M.S. & Silva, Carlos A. Santos, 2020. "Renewable energy support policy evaluation: The role of long-term uncertainty in market modelling," Applied Energy, Elsevier, vol. 278(C).
    8. Zeinolabedin Sadeghi & Yahya Hatami & Seyed Abdolmajid Jalaei & Amir Abdollahi, 2020. "Generation capacity expansion economic-environmental planning under uncertainty of demand and supply," Environment Systems and Decisions, Springer, vol. 40(4), pages 544-559, December.
    9. Aryani, Morteza & Ahmadian, Mohammad & Sheikh-El-Eslami, Mohammad-Kazem, 2021. "Coordination of risk-based generation investments in conventional and renewable capacities in oligopolistic electricity markets: A robust regulatory tool," Energy, Elsevier, vol. 214(C).
    10. Lourdes Martínez-Villaseñor & Hiram Ponce & José Antonio Marmolejo-Saucedo & Juan Manuel Ramírez & Agustina Hernández, 2018. "Analysis of Constraint-Handling in Metaheuristic Approaches for the Generation and Transmission Expansion Planning Problem with Renewable Energy," Complexity, Hindawi, vol. 2018, pages 1-22, October.
    11. Levin, Todd & Kwon, Jonghwan & Botterud, Audun, 2019. "The long-term impacts of carbon and variable renewable energy policies on electricity markets," Energy Policy, Elsevier, vol. 131(C), pages 53-71.
    12. Koltsaklis, Nikolaos E. & Dagoumas, Athanasios S., 2018. "State-of-the-art generation expansion planning: A review," Applied Energy, Elsevier, vol. 230(C), pages 563-589.

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