On the Way to Integrate Increasing Shares of Variable Renewables in China: Experience from Flexibility Modification and Deep Peak Regulation Ancillary Service Market Based on MILP-UC Programming

Yinhe Bu and Xingping Zhang
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Yinhe Bu: School of Economics and Management, North China Electric Power University, Beijing 102206, China
Xingping Zhang: School of Economics and Management, North China Electric Power University, Beijing 102206, China

Sustainability, 2021, vol. 13, issue 5, 1-22

Abstract: China has declared ambitious carbon emission reduction targets and will integrate increasing shares of variable renewables for the next decades. The implementation for flexibility modification of thermal power units and deep peak regulation ancillary service market alleviates the contradiction between rapid capacity growth and limited system flexibility. This paper establishes three flexibility modification schemes and two price rules for simulation and proposes an analysis framework for unit commitment problem based on mixed-integer linear programming to evaluate the policy mix effects. Results confirm the promoting effects of flexibility modification on integrating variable renewables and illustrate diverse scheme selections under different renewables curtailment. Particularly, there is no need for selecting expensive schemes which contain more modified units and more developed flexibility, unless the curtailment decrement is compulsorily stipulated or worth for added modification cost. Similarly, results also prove the revenue loss compensation effect of deep peak regulation ancillary service market and illustrate diverse price rule selections under different curtailment intervals. Price rule with more subdivided load intervals and bigger price differences among them is more effective, especially under the higher requirement for curtailment rate. Therefore, the government should further enlarge flexibility modification via but not limited to more targeted compensation price, while generators should further consider a demand-based investment.

Keywords: renewables integration; renewables curtailment; flexibility modification; deep peak regulation; ancillary service market; price rules; MILP-UC programming (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2021
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