The inter-temporal optimization of the operation of the nuclear fuel reservoir in a liberalized electricity market dominated by the nuclear generation

Pascal Gourdel () and Maria Lykidi ()
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Pascal Gourdel: CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement
Maria Lykidi: CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement

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Abstract: We look at the optimal inter-temporal management of the fuel reservoir of nuclear units in a liberalized electricity market. We use the assumption that nuclear fuel works as a "reservoir" of energy due to the periodical shutdown of nuclear units to reload their fuel. In the medium-term, how a producer sets the nuclear fuel of the reservoir to respond to the variations of seasonal demand in order to maximize its production value on a multi-annual basis? The dynamic nature of the nuclear fuel reservoir highlighted the discontinuity of the price which complicates the resolution of the optimal inter-temporal production problem and even leads to a lack of solutions. Theoretically, at the optimum, nuclear is used to serve baseload and thermal follows demand's variations. Numerically, both nuclear and thermal units operate in load-following mode. Solutions characterized by a constant nuclear production do not exist which shows that the significant share of nuclear in the energy mix does not permit to produce at a constant rate unless further investments in thermal capacity are done. Inter-temporal optimization shows the role of nuclear for ensuring the equilibrium between supply and demand.

Keywords: merit order price; discontinuity problem; electricity production; nuclear fuel reservoir; inter-temporal optimization; thermal production (search for similar items in EconPapers)
Date: 2014-01
New Economics Papers: this item is included in nep-ene
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Published in 2014

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