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Electricity markets evolution with the changing generation mix: An empirical analysis based on China 2050 High Renewable Energy Penetration Roadmap


  • Zou, Peng
  • Chen, Qixin
  • Yu, Yang
  • Xia, Qing
  • Kang, Chongqing


The power generation mix are significantly changing due to the growth of stricter energy policies. The renewables are increasingly penetrating the power systems and leading to more clean energy and lower energy prices. However, they also require much more flexibilities and ancillary services to handle their uncertainties and variabilities. Thus, the requirements for regulation and reserve services may dramatically increase while the supplies of these services, which are mainly from the traditional thermal plants, remain almost invariant. This changing situation will cause higher regulation and reserve prices and impact the profit models and revenue structures of the traditional plants. How electricity markets are actually evolving with the changing generation mix? Can enough backup power plants be given adequate economic incentives and thus remained with the increasing renewables and the decreasing energy prices and productions? Can de-carbonization be fully performed in power systems? To explicitly answer the question, this paper uses a multi-period Nash-Cournot equilibrium model to formulate the evolution of power markets incorporating different types of generators, including thermal units, hydro units, wind farms, solar stations and energy storage systems. The price changes in the co-optimized energy, regulation and reserve markets, and the profit changes of various generators are studied. And the variabilities and uncertainties of renewable generation sources are considered in dynamically determining the requirements of regulation and reserve services. Based on the China 2050 High Renewable Energy Penetration Scenario and Roadmap Study, empirical analysis is performed to identify the impacts of the changing generation mix on electricity markets and power industry. The energy storage systems are specifically analysed and compared to reveal their impacts on the profit structures of various generators.

Suggested Citation

  • Zou, Peng & Chen, Qixin & Yu, Yang & Xia, Qing & Kang, Chongqing, 2017. "Electricity markets evolution with the changing generation mix: An empirical analysis based on China 2050 High Renewable Energy Penetration Roadmap," Applied Energy, Elsevier, vol. 185(P1), pages 56-67.
  • Handle: RePEc:eee:appene:v:185:y:2017:i:p1:p:56-67
    DOI: 10.1016/j.apenergy.2016.10.061

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    References listed on IDEAS

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    1. Noussan, Michel & Jarre, Matteo & Roberto, Roberta & Russolillo, Daniele, 2018. "Combined vs separate heat and power production – Primary energy comparison in high renewable share contexts," Applied Energy, Elsevier, vol. 213(C), pages 1-10.
    2. Xue, Yuan & Ge, Zhihua & Yang, Lijun & Du, Xiaoze, 2019. "Peak shaving performance of coal-fired power generating unit integrated with multi-effect distillation seawater desalination," Applied Energy, Elsevier, vol. 250(C), pages 175-184.
    3. Wang, Peng & Chen, Li-Yang & Ge, Jian-Ping & Cai, Wenjia & Chen, Wei-Qiang, 2019. "Incorporating critical material cycles into metal-energy nexus of China’s 2050 renewable transition," Applied Energy, Elsevier, vol. 253(C), pages 1-1.
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    5. Shahmohammadi, Ali & Sioshansi, Ramteen & Conejo, Antonio J. & Afsharnia, Saeed, 2018. "Market equilibria and interactions between strategic generation, wind, and storage," Applied Energy, Elsevier, vol. 220(C), pages 876-892.
    6. Xu, Beibei & Chen, Diyi & Venkateshkumar, M. & Xiao, Yu & Yue, Yan & Xing, Yanqiu & Li, Peiquan, 2019. "Modeling a pumped storage hydropower integrated to a hybrid power system with solar-wind power and its stability analysis," Applied Energy, Elsevier, vol. 248(C), pages 446-462.
    7. Savelli, Iacopo & Cornélusse, Bertrand & Giannitrapani, Antonio & Paoletti, Simone & Vicino, Antonio, 2018. "A new approach to electricity market clearing with uniform purchase price and curtailable block orders," Applied Energy, Elsevier, vol. 226(C), pages 618-630.
    8. Zhou, Dequn & Wu, Changsong & Wang, Qunwei & Zha, Donglan, 2019. "Response of scale and leverage of thermal power enterprises to renewable power enterprises in China," Applied Energy, Elsevier, vol. 251(C), pages 1-1.
    9. Song, Chunhe & Jing, Wei & Zeng, Peng & Yu, Haibin & Rosenberg, Catherine, 2018. "Energy consumption analysis of residential swimming pools for peak load shaving," Applied Energy, Elsevier, vol. 220(C), pages 176-191.
    10. Zhao, Zhen-Yu & Chen, Yu-Long & Li, Heng, 2019. "What affects the development of renewable energy power generation projects in China: ISM analysis," Renewable Energy, Elsevier, vol. 131(C), pages 506-517.
    11. Dincer, Hasan & Yuksel, Serhat, 2019. "Balanced scorecard-based analysis of investment decisions for the renewable energy alternatives: A comparative analysis based on the hybrid fuzzy decision-making approach," Energy, Elsevier, vol. 175(C), pages 1259-1270.
    12. Dupont, Elise & Koppelaar, Rembrandt & Jeanmart, Hervé, 2018. "Global available wind energy with physical and energy return on investment constraints," Applied Energy, Elsevier, vol. 209(C), pages 322-338.
    13. Guo, Hongye & Chen, Qixin & Xia, Qing & Kang, Chongqing, 2018. "Market equilibrium analysis with high penetration of renewables and gas-fired generation: An empirical case of the Beijing-Tianjin-Tangshan power system," Applied Energy, Elsevier, vol. 227(C), pages 384-392.
    14. Yamani, Noureddine & Khellaf, Abdallah & Mohammedi, Kamal & Behar, Omar, 2017. "Assessment of solar thermal tower technology under Algerian climate," Energy, Elsevier, vol. 126(C), pages 444-460.


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