The effects of the renewable energies penetration on the surplus welfare under energy policy

Abstract

There is some new challenges about the greenhouse gases, climate changing, and weather warming. The applying of the various Energy Policies (EPs) on production sections, is the prevalent solution that considers promotion of the renewable energies. The result is enhancement of penetration rate of the Renewable Energy Sources (RESs) in the power systems. However, till now, there are little papers that assessed the effects of EPs on the social welfare. The social welfare consists of the financial profits of the RES production company as well as the surplus welfare of subscribers. In this paper, the results of the implementation of a well–known EP as the Renewable Energy Certificate (REC) and its effect on the surplus welfare are assessed, based on the Generation Expansion Planning (GEP). In order to obtain the paper aims, the desired EP and the GEP are mixed, and a comprehensive model is presented from the perspective of an RES production company. The model is solved in the form of a Mixed Integer Non–Linear Problem (MINLP) in the GAMS optimization software using the BARON optimizer. Also, in order to reach complete solution, two scenarios as without and with the proposed EP are considered, and the results are compared with other EPs. For evaluation of the social welfare, a criteria as the Virtual Price Index (VPI) is introduced. With analysis of the results, it could be seen that the surplus welfare of the subscribers increases in the long term horizon, while it was lower than profit of the RES production companies at short terms.