Abstract
Expansion planning models are tools frequently employed to analyze the transi-
tion to a carbon-neutral power system. Such models provide estimates for an opti-
mal technology mix and optimal operating decisions, but they are also often used
to obtain prices and subsequently calculate profits. This paper analyzes the impact
of modeling assumptions on convexity for power system outcomes and, in particu-
lar, on investment cost recovery. Through a case study, we find that although there
is a long-term equilibrium for producers under convex models, introducing realis-
tic constraints, such as non-convexities/lumpiness of investments, inelastic demand
or unit commitment constraints, leads to profitability challenges. We furthermore
demonstrate that considering only short-term marginal costs in market-clearing may
potentially create a significant missing-money problem caused by a missing-market
problem and dual degeneracy in a 100 percent renewable system.
tion to a carbon-neutral power system. Such models provide estimates for an opti-
mal technology mix and optimal operating decisions, but they are also often used
to obtain prices and subsequently calculate profits. This paper analyzes the impact
of modeling assumptions on convexity for power system outcomes and, in particu-
lar, on investment cost recovery. Through a case study, we find that although there
is a long-term equilibrium for producers under convex models, introducing realis-
tic constraints, such as non-convexities/lumpiness of investments, inelastic demand
or unit commitment constraints, leads to profitability challenges. We furthermore
demonstrate that considering only short-term marginal costs in market-clearing may
potentially create a significant missing-money problem caused by a missing-market
problem and dual degeneracy in a 100 percent renewable system.
Originalsprache | englisch |
---|---|
Seiten (von - bis) | 574-593 |
Seitenumfang | 20 |
Fachzeitschrift | TOP: An Official Journal of the Spanish Society of Statistics and Operations Research |
Jahrgang | 2022 |
Ausgabenummer | 30 |
Frühes Online-Datum | 2022 |
DOIs | |
Publikationsstatus | Veröffentlicht - 2022 |
ASJC Scopus subject areas
- Informationssysteme und -management
- Diskrete Mathematik und Kombinatorik
- Modellierung und Simulation
- Managementlehre und Operations Resarch