Two-Part Tariff of Pumped Storage Power Plants for Wind Power Accommodation

Hua Li, Hongwei Zheng, Bowen Zhou, Guangdi Li, Bo Yang, Bo Hu and Min Ma
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Hua Li: College of Information Science and Engineering, Northeastern University, Shenyang 110819, China
Hongwei Zheng: College of Information Science and Engineering, Northeastern University, Shenyang 110819, China
Bowen Zhou: College of Information Science and Engineering, Northeastern University, Shenyang 110819, China
Guangdi Li: College of Information Science and Engineering, Northeastern University, Shenyang 110819, China
Bo Yang: College of Information Science and Engineering, Northeastern University, Shenyang 110819, China
Bo Hu: State Grid Liaoning Electric Power Co., Ltd., Shenyang 110006, China
Min Ma: State Grid Liaoning Electric Power Co., Ltd., Shenyang 110006, China

Sustainability, 2022, vol. 14, issue 9, 1-18

Abstract: Pumped storage power plants face many challenges in competing in the electricity market, and high pumping costs lead to high prices for their power generation, which is one of the important factors that has limited their development. To address this problem, this paper studies the pumped storage two-part tariff mechanism considering wind power accommodation and uses the peak-valley price difference of wind power to realize the rationality and economy of a pumped storage charging and discharging strategy. It can improve the competitiveness of pumped storage power plants participating in electricity market transactions. Then, by considering the economic advantages of “pumped storage + clean energy”, a pumped storage and wind power joint optimal dispatching model was established based on the original pumped storage pricing method. This model takes the total system cost reduction after the introduction of pumped storage as the objective function to derive a reasonable pumped storage strategy. After which, the two-part tariff for pumped storage power plants was formulated based on the principle of reasonable revenue. Finally, a sensitivity analysis of various relevant parameters of the power plant was conducted through case studies to verify the effectiveness of the two-part tariff mechanism of pumped storage. It was found that the electricity tariff is lowest when the ratio of plant capacity to upper reservoir capacity is 1:6.37 (MW/million m 3 ).

Keywords: pumped storage power plant; wind power accommodation; electricity market; two-part tariff (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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