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Modelling counter-intuitive effects on cost and air pollution from intermittent generation

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  • Javad Khazaei
  • Anthony Downward
  • Golbon Zakeri

Abstract

In this paper, we first present a market environment with a conventional two settlement mechanism. We show that when we add some wind generation to the system, the steady-state market conditions yield lower social and consumer welfare and higher use of fossil fuels. We also present results of a counterfactual stochastic settlement market which improves social and consumer welfare after the introduction of new intermittent generation. Thus, we conclude that the choice of market mechanism is a critical factor for capturing the benefits of large-scale wind integration. We also introduce a method to compute analytical equilibria of games in which the payoff functions of players depend on the optimal solution to an optimization problem with inequality constraints. Copyright Springer Science+Business Media New York 2014

Suggested Citation

  • Javad Khazaei & Anthony Downward & Golbon Zakeri, 2014. "Modelling counter-intuitive effects on cost and air pollution from intermittent generation," Annals of Operations Research, Springer, vol. 222(1), pages 389-418, November.
    • Handle: RePEc:spr:annopr:v:222:y:2014:i:1:p:389-418:10.1007/s10479-012-1281-4
    DOI: 10.1007/s10479-012-1281-4
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    References listed on IDEAS

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    Cited by:

    1. Rintamäki, Tuomas & Siddiqui, Afzal S. & Salo, Ahti, 2016. "How much is enough? Optimal support payments in a renewable-rich power system," Energy, Elsevier, vol. 117(P1), pages 300-313.
    2. Xiaotong Sun & Wei Xu & Hongxun Jiang & Qili Wang, 2021. "A deep multitask learning approach for air quality prediction," Annals of Operations Research, Springer, vol. 303(1), pages 51-79, August.

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