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An investigation on the impacts of regulatory interventions on wind power expansion in generation planning

Listed author(s):
  • Alishahi, Ehsan
  • Moghaddam, Mohsen P.
  • Sheikh-El-Eslami, Mohammad K.
Registered author(s):

    Large integration of intermittent wind generation in power system has necessitated the inclusion of more innovative and sophisticated approaches in power system investment planning. This paper presents a novel framework on the basis of a combination of stochastic dynamic programming (SDP) algorithm and game theory to study the impacts of different regulatory interventions to promote wind power investment in generation expansion planning. In this study, regulatory policies include Feed-in-Tariff (FIT) incentive, quota and tradable green certificate. The intermittent nature and uncertainties of wind power generation will cause the investors encounter risk in their investment decisions. To overcome this problem, a novel model has been derived to study the regulatory impacts on wind generation expansion planning. In our approach, the probabilistic nature of wind generation is modeled. The model can calculate optimal investment strategies, in which the wind power uncertainty is included. This framework is implemented on a test system to illustrate the working of the proposed approach. The result shows that FITs are the most effective policy to encourage the rapid and sustained deployment of wind power. FITs can significantly reduce the risks of investing in renewable energy technologies and thus create conditions conducive to rapid market growth.

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    File URL: http://www.sciencedirect.com/science/article/pii/S0301421511003557
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    Article provided by Elsevier in its journal Energy Policy.

    Volume (Year): 39 (2011)
    Issue (Month): 8 (August)
    Pages: 4614-4623

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    Handle: RePEc:eee:enepol:v:39:y:2011:i:8:p:4614-4623
    Contact details of provider: Web page: http://www.elsevier.com/locate/enpol

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    1. Meyer, Niels I., 2003. "European schemes for promoting renewables in liberalised markets," Energy Policy, Elsevier, vol. 31(7), pages 665-676, June.
    2. Mitchell, C. & Bauknecht, D. & Connor, P.M., 2006. "Effectiveness through risk reduction: a comparison of the renewable obligation in England and Wales and the feed-in system in Germany," Energy Policy, Elsevier, vol. 34(3), pages 297-305, February.
    3. Agnolucci, Paolo, 2007. "The effect of financial constraints, technological progress and long-term contracts on tradable green certificates," Energy Policy, Elsevier, vol. 35(6), pages 3347-3359, June.
    4. Nguyen, Khanh Q., 2007. "Impacts of wind power generation and CO2 emission constraints on the future choice of fuels and technologies in the power sector of Vietnam," Energy Policy, Elsevier, vol. 35(4), pages 2305-2312, April.
    5. Menanteau, Philippe & Finon, Dominique & Lamy, Marie-Laure, 2003. "Prices versus quantities: choosing policies for promoting the development of renewable energy," Energy Policy, Elsevier, vol. 31(8), pages 799-812, June.
    6. George, Mel & Banerjee, Rangan, 2009. "Analysis of impacts of wind integration in the Tamil Nadu grid," Energy Policy, Elsevier, vol. 37(9), pages 3693-3700, September.
    7. De Jonghe, Cedric & Delarue, Erik & Belmans, Ronnie & D'haeseleer, William, 2009. "Interactions between measures for the support of electricity from renewable energy sources and CO2 mitigation," Energy Policy, Elsevier, vol. 37(11), pages 4743-4752, November.
    8. Couture, Toby & Gagnon, Yves, 2010. "An analysis of feed-in tariff remuneration models: Implications for renewable energy investment," Energy Policy, Elsevier, vol. 38(2), pages 955-965, February.
    9. Lemming, Jacob, 2003. "Financial risks for green electricity investors and producers in a tradable green certificate market," Energy Policy, Elsevier, vol. 31(1), pages 21-32, January.
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