How do uncertain renewable energy induced risks evolve in a two-stage deregulated wholesale power market

Dequn Zhou, Yining Zhang, Qunwei Wang and Hao Ding

Applied Energy, 2024, vol. 353, issue PB, No S0306261923015040

Abstract: Integrating renewable power into power market transactions is significant in terms of achieving carbon peaking and carbon neutrality. However, the integration of intermittent renewable energy sources (RES) introduces instability into power generation and brings certain risks to deregulated power market transactions. This study aims to identify the risks arising from RES power integration and analyze how these risks transmit and evolve in deregulated power markets. A Cournot game model is constructed to analyze the generation decisions of a thermal power generation company (GENCO) and a wind power GENCO in a two-stage power market. According to the results, in the mid-to-long-term power market, an increase in the uncertainty of wind power generation (WPG) could reduce wind power supply, increase the clearing price and decrease the power demand. Then, in the spot power market, the increased uncertainty related to WPG might decrease the amount of wind power traded, increase the marginal generation cost of the thermal power GENCO, raise the clearing price, and reduce the market demand for power. Finally, the uncertainty related to wind power generation could result in diminished revenue for the wind power GENCO and a loss in overall social welfare in the two-stage power market transaction.

Keywords: Risk; Uncertainty of RES; Two-stage power market; Cournot game (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0306261923015040
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:appene:v:353:y:2024:i:pb:s0306261923015040

Ordering information: This journal article can be ordered from
http://www.elsevier.com/wps/find/journaldescription.cws_home/405891/bibliographic
http://www.elsevier. ... 405891/bibliographic

DOI: 10.1016/j.apenergy.2023.122140

Access Statistics for this article

Applied Energy is currently edited by J. Yan

More articles in Applied Energy from Elsevier
Bibliographic data for series maintained by Catherine Liu ().