Optimal Variable Renewable Energy Generation Schedules Considering Market Prices and System Operational Constraints

Veeraya Imcharoenkul and Surachai Chaitusaney
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Veeraya Imcharoenkul: Department of Electrical Engineering, Faculty of Engineering, Chulalongkorn University, Bangkok 10330, Thailand
Surachai Chaitusaney: Department of Electrical Engineering, Faculty of Engineering, Chulalongkorn University, Bangkok 10330, Thailand

Energies, 2021, vol. 14, issue 17, 1-18

Abstract: The maximization of output from variable renewable energy (VRE) sources considering system operational constraints (SOCs) is a traditional method for maximizing VRE generators’ profits. However, in wholesale electricity markets, VRE participation tends to reduce marginal prices (MP) because of its low marginal costs. This circumstance, called the “merit-order effect” (MOE), reduces the generators’ profits. Thus, the traditional method is possibly no longer the best and only method to maximize the generators’ profits. Moreover, the VRE support schemes also affect MP, making MOE more severe. VRE curtailment can relieve MOE, but VRE output must be decreased, thereby reducing the generators’ profits. This paper proposes a method to find the optimal VRE generation schedules that maximize VRE generators’ profits while considering the trade-off among the VRE output, MP, and SOCs. The method combines the merit-order model and the unit-commitment model solved by the optimization tools in MATLAB. Thailand’s electrical system was the test system. The result shows that VRE generators’ profits from the proposed method are significantly higher than from the traditional method when the system has high wind penetration, and the generators have no support scheme. Curtailing approximately 7–10% of wind output can increase the average MP by 23.6–30%.

Keywords: merit-order effect; profit maximization; system operational constraints; unit-commitment; variable renewable energy; renewable energy support scheme (search for similar items in EconPapers)
JEL-codes: Q Q0 Q4 Q40 Q41 Q42 Q43 Q47 Q48 Q49 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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