Power Producers Research Articles

Stochastic modeling of decarbonizing strategy, policy, and market-induced incentives for the US electricity sector

In line with the global pursuit of achieving net-zero carbon emissions, integrating carbon capture and storage (CCS) and renewable energy (RE) technologies is important in power production. This study evaluates the profitability of CCS and RE technologies as alternative ways of achieving climate change goals. While past research focused on costs, technological advancements, and capture methods, there is a need for more studies on assessing the financial feasibility of these climate change solutions under uncertain conditions, alongside specific performance goals and strategies to entice power producers. Using a comprehensive framework featuring deterministic and stochastic modeling approaches, this research explores the impact of policy and market incentives on CCS and RE investments within the U.S. power sector. It analyzes the interactions of variables such as market uncertainties, technical factors, and policy dynamics on the financial viability of adopting CCS and RE for targeted CO2 reductions. The results reveal that, given the status quo of policies, RE and CCS exhibit annualized net present values of $4.62 and $1.76, respectively, for each metric ton (MT) of CO2. Uncertainties in policy incentives emerge as a primary hindrance to achieving cost-effective carbon reduction mandates using CCS, while changes in the green electricity price premium cause high variability in RE returns. The study proposes a hypothetical market, featuring the sale of CCS-linked net-zero electricity at a distinctive premium price of $0.03/kWh. The study's findings underscore the importance of both policy and market incentives to enable power producers to deploy carbon management technologies at a large scale.

Analysis of the tripartite evolutionary game in the marketization of China’s renewable energy-based electricity prices

The evolution of China’s renewable power pricing regulation from subsidy-driven fixed feed-in tariffs (FIT) to market-oriented, quota-based renewable portfolio standards (RPS) is a crucial institutional transformation designed to advance the low-carbon energy transition. The government’s price regulation of mandatory and non-mandatory quotas has a direct impact on the optimal production decision-making behavior of renewable and coal-fired power producers, which determines the effective substitution of fossil energy by renewable energy in China, and relates to the successful realization of the low-carbon energy transition. This article presents the construction of a tripartite evolutionary game model under both non-mandatory and mandatory quotas, employing MATLAB software to simulate and assess the effectiveness of a tradable green certificate (TGC) system in the presence of mandatory quotas. Based on stable equilibrium strategies, we discuss the impact of FIT on green certificate trading under four different subsidy withdrawal strategies and three quota and penalty scenarios. The results indicate the following. First, when renewable power producers certify and engage in green certificate trading, coal-fired power producers purchase green certificates, and the government implements mandatory quotas, the participants in the game achieve an equilibrium strategy combination. Second, the findings validate the effectiveness of the RPS–TGC model (i.e., the green certificate trading system in the presence of mandatory quotas) for electricity price regulation. Third, the root cause of the failure of China’s current voluntary green certificate trading system is the government's non-mandatory quotas. Accordingly, it is proposed that the marketization of renewable electricity prices in China needs to adopt a fast-then-slow exit of FIT subsidies, with renewable energy power quotas set at 20% and penalty standards set at 1.5P.

The impact of carbon markets on the financial performance of power producers: Evidence based on China

The effects of the launching of the carbon trading market on the financial performance of Chinese power generation companies was analyzed utilizing the difference-in-differences (DID) model on the data of 51 listed thermal and hydropower enterprises in China from 2016 to 2022. The findings show that: Behr et al. (2023). The financial performance of power generation companies is strongly impacted by the activation of the carbon market, particularly non-state-owned, small, and east-central enterprises Balcılar et al. (2016). Carbon market launching has a detrimental effect on the financial performance of power generation companies due to its effects on the companies' external environment and financial limitations. Branas et al. (2011) (3) Generation costs mediate in the subgroup where the share of thermal power installed capacity was 60% or more of total installed capacity, and financing constraints and the Lerner index mediated in the group of provinces with <60% installed capacity. Policymakers need to take measures to address the increased financing constraints caused by the launch of the carbon market and to enhance fair competition among power generators. To minimize carbon emissions and enhance high-quality corporate development, power generation companies should also implement measures to lower their production and operating expenses.

Is Power-to-Gas always beneficial? The implications of ownership structure

Power-to-gas (PtG), a technology that converts electricity into hydrogen, is expected to become a core component of future low-carbon energy systems. While its economics and performance as a sector coupling technique have been well studied in the context of perfectly competitive energy markets, the distortions caused by the presence of large strategic players with a multi-market presence have received little attention. In this paper, we examine them by specifying a partial equilibrium model that provides a stylized representation of the interactions among the natural gas, electricity, and hydrogen markets. We calibrate our model using the future Dutch energy system as a reference. Using this model, we compare several possible ownership organizations for PtG to investigate how imperfect competition affects its operations. Evidence gained from these market simulations show that the effects of PtG vary with the multi-market profile of its operator. Producers of fossil-based hydrogen tend to make little use of PtG, whereas renewable power producers use it more to increase the electricity prices. Although PtG operations are profitable and can be welfare-enhancing, welfare distribution among agents is highly unequal when PtG is strategically operated in conjunction with variable renewable generation. In that case, PtG also raises environmental concerns as it stimulates the use of polluting thermoelectric generation.

Research on the Dynamic Characteristics of Photovoltaic Power Production and Sales Based on Game Theory

This paper mainly studies the dynamic characteristics of production and sales of distributed photovoltaic power. This is beneficial for the construction and development of a green power system, and it promotes the sustainable development of the social economy. First, the production and sales laws of the photovoltaic power are analyzed, and the trade process between photovoltaic power producers (PVPs) and photovoltaic power demanders (PVDs) is modeled as a game. Different from the existing relevant literature, two kinds of payoff bimatrices are provided, which correspond to the PVD market and PVP market, respectively. Then, the dynamic characteristics of the model are revealed by using the semitensor product method. The results present a more reliable theoretical basis for the sustainable development of the green electricity market. Finally, through an illustrative example, it can be seen that the strategies of all participants are constantly changing to obtain more profits rather than stable at a traditional Nash equilibrium point. It is worth pointing out that the method and results are applicable to other distributed low-carbon energies, contributing to the development of sustainable energy systems.

Weathering the Storm: Planning and Building Smarter

The importance and challenge of utility distribution system strategy and planning cannot be overstated in light of climate change and the increasing frequency of extreme storms. Independent power producers, distributed energy resource (DER) providers, and retail energy providers similarly face the same challenges. The United States witnessed a record‐breaking hurricane season in 2020, resulting in staggering damages of approximately $95 billion. The most recent report from the Intergovernmental Panel on Climate Change (IPCC) highlights the urgency of reducing greenhouse gas (GHG) emissions to limit global warming to mitigate the disastrous and costly effects of climate change. The report indicated that these events are likely to become the norm and will worsen if mitigation and adaptation measures aren't established. These events are becoming more frequent and severe, making it imperative to establish effective mitigation and adaptation measures.

Photovoltaic Power Plant Feasibility Study Based on Indonesia’s Renewable Energy Tariffs: A Study of Nusa Penida Solar Power Plant

This study conducts feasibility study on 3.5 MW photovoltaic (PV) power plant in Nusa Penida based on Indonesia’s existing renewable energy tariffs. Three scenarios were developed utilizing RETScreen software, according to the power plant specification. Base case scenario was developed to determine the feasibility of the PV power plant based on independent power producer perspective. PLN scenario was developed to determine the feasibility of the PV power plant based on Indonesia’s state-owned electricity company. Clean-energy scenario was developed to determine the feasibility of the PV power plant if there was a $20/tCO2 emission reduction incentive in Indonesia. The base case scenario results showed that the existing PV tariffs for PV power plant project was not sufficient to make the project financially viable based on the IPPs perspective. The PLN scenario results showed that the PV power plant project is very profitable based on PLN perspective due to high cost-savings. The clean-energy scenario results showed that $20/tCO2 emission reduction incentive was sufficient to make the PV power plant project financially viable based on the IPPs perspective. Based on those results, this study recommends emission-reduction incentives as a mean of attracting more investors. This study also recommends PLN to utilize more PV power plant, especially if the region have high generation cost as a means to lower Indonesia’s energy cost thus making energy more accessible for everyone.

A Fuzzy Logic Approach to Health Index Determination for a Gas-Insulated Switchgear

This paper presents a fuzzy logic approach, a simplified and adaptable method, to determine the health index of gas-insulated switchgear (GIS) bay and their compartments. Since the traditional weighting and scoring method (WSM) is a subjective method, the fuzzy logic approach has been applied to enhance the accuracy of the health index (HI) determination by evaluating the detectable degradation and the incorporated conditional factor (CF) considering actual operating conditions and invisible ageing. The input data are first obtained from routine inspection and time-based testing and then converted to numerical values as the fuzzy logic model input to compute the component HI. The bay HI values are further calculated by applying the WSM using the obtained component of the HI. Then, the accuracy of the obtained HI of the bay has been improved by multiplying with the CF to obtain the overall bay HI values. The proposed methodology was implemented in an independent power producer in a large industrial estate in Thailand to evaluate 175 GIS bays with actual data. The results were compared against other HI evaluation techniques with a satisfactory outcome. Finally, the overall bay HI is used to prioritize maintenance activity, to effectively allocate human resources, to prevent unplanned outages, and to achieve cost-effective, condition-based maintenance.

Wind power plants hybridised with solar power: A generation forecast perspective

The association of different variable renewable technologies in hybrid power plants and the benefits of their aggregation for the operation of power systems is an area of recent research. Accurate forecasts are crucial for extracting those benefits and promote an optimal integration of such plants into power systems and electricity markets. This study focuses on the hybridisation of existing wind power plants with different shares of solar photovoltaic capacity and investigates how these power plants can reduce their combined forecast errors and thus, increasing profitability in electricity markets.The work uses a forecast methodology based on a sequential forward feature selection algorithm which employs two different objective functions and an artificial neural network approach previously presented but, in this case, it is applied to the specific case of hybrid power plants. The methodology uses as input data from a numerical weather prediction model and iteratively selects meteorological features to achieve the different objective functions implemented, namely i) minimisation of the root mean square error; or ii) maximisation of the market remuneration.The methodology developed was applied to three case studies in Portugal with different levels of wind and solar generation complementarity. The results show that the hybrid power plants can increase market value by up to 5% and total remuneration can increase by up to 30% when compared with the existing wind power plant, while it is possible to reduce the forecast errors by nearly 4%. The obtained results highlight the need to select the most relevant meteorological features to maximise the accuracy of the power forecast and the renewable power producers revenues in a market environment.

Information gap decision theory-based optimization of joint decision making for power producers participating in carbon and electricity markets

Carbon markets have been established in many countries and regions with the goal of promoting global carbon neutrality. The position of power producers as the dominant carbon emitters necessitates that they engage in both electricity and carbon markets. However, most studies have considered only short-term electricity markets and unrealistically static carbon markets, and the speculative behavior of power producers in the carbon market remains poorly considered. The present study addresses these issues by proposing an optimized joint decision model based on information gap decision theory to facilitate the participation of power producers in annual and monthly electricity markets, and monthly carbon markets, where uncertainties in the prices of electricity and carbon quotas, and the speculative behavior of power producers in the carbon market are explicitly considered to ensure that the revenues of market participants do not fall below a predetermined minimum acceptable value. The results of simulations based on the rules and actual market data obtained for electricity and carbon markets in a specific province of China demonstrate that the proposed model provides power producers with trading solutions to meet different expected revenue targets, and thereby assists them as much as possible in counteracting the risks to profit associated with fluctuations in electricity and carbon market prices.

Optimal multi-market operation of gravity energy storage and wind power producer using a hybrid stochastic/robust optimization

In light of physical limitations, the well-known large-scale pump hydro energy storage was unable to take place in predominantly flat areas. The utilization of innovative gravity energy storage (GES) has increased in the power system in the past few years, with no geographical restrictions and reduced investment costs. According to the paucity of installed GES, a proper formulation considering the physical specifications of gravity energy for market participants in GES has not been sufficiently investigated. In this paper, a new non-linear formulation for the strategic multi-market running of GES and wind suppliers in an uncertain environment characterized by joint robust optimization (RO) and stochastic programming is introduced. Using piecewise linearization, the proposed nonlinear model is then reformulated as a linear version. In the proposed method for market involvement, the bid-offer plans of the GES are obtained in order to participate actively in the DA market. Obtained results show that market conditions significantly impact the profitability of the system, with a 30 % reduction in the day-ahead (DA) price leading to a 32 % reduction in daily profit. Also the risk-based operation of the GES and wind producer is compared with risk-neutral condition, highlighting the importance of considering intraday and real-time markets and risk profiles in optimizing the operation and profitability of the hybrid wind-GES system.

Marginal fixed premium for clean hydrogen portfolio standard (CHPS) considering techno-economic analysis of clean hydrogen production based on hydropower plants

As the hydrogen economy recently gains momentum, the Korean government is actively encouraging Independent Power Producers (IPPs) to leverage hydrogen energy. The surging uncertainties in the power market, precipitated by the rapid increase in renewable energy sources (RES), necessitates IPPs to formulate a new benefit structure that utilizes green hydrogen. However, the current economic challenges associated with the operation of RES linked to water electrolysis result in diminished participation from IPPs. In response, the Korean government is planning to implement the Clean Hydrogen Portfolio Standard (CHPS), which requires clean hydrogen power generation and offers corresponding Fixed Premium (FP) subsidies. In this paper, we incrementally increase the FP for RES linked to electrolyzers (ELZ) and derive a marginal fixed premium (FPmar). This method initiates a shift towards higher economic feasibility compared to the traditional benefit structure of power trading-based RES. We suggest a green hydrogen-based business model (BM) that synergizes hydropower with water electrolysis and calculate a suitable CHPS subsidy to ensure the economic feasibility of this BM. In conclusion, this paper equips IPPs operating hydropower with the capability to evaluate the adequacy of the government-provided FP for the economical operation of a hydropower plant linked to water electrolysis. Furthermore, it provides policymakers with the framework to make informed decisions regarding the necessary FPmar to stimulate IPPs’ participation.

Over a century of small hydropower projects in Indonesia: a historical review

BackgroundHydropower is a mature energy technology and one that could play a more important role in providing clean and reliable energy. In small-scale contexts, hydropower is useful for providing electricity access, balancing intermittent resources, and as a potential source of energy storage. This paper provides a comprehensive exploration of the development of the small hydropower (SHP) sector in Indonesia, the world’s fourth most populous country.MethodsTwo research methods were employed: secondary data analysis through a desk review of relevant literature and primary data collection through site visits and expert and stakeholder interviews. Two case studies of micro-hydro applications in community-based rural electrification were analyzed. The paper explores how SHP projects were initiated, lessons learned, and policy recommendations of relevance to further development of distributed small-scale renewable energy in Indonesia.ResultsThe sector commenced during the Dutch Era and now centers on both community-based rural electrification projects and commercial schemes under the independent power producer (IPP) approach. Since the late 1980s, initiatives to implement SHP for rural electrification have flourished through various programs. Key regulatory, economic, and technical barriers include inconsistent and unclear supporting regulations, especially regarding electricity prices; artificially low retail electricity prices; capital and borrowing constraints; advantages provided to fossil fuels; limited technical experience and capabilities of project developers and project sponsors; risks from floods, earthquakes, and landslides; constraints on supporting infrastructure; and limited grid links. The most successful and sustainable SHP projects are ones that provide local economic benefits and for which local communities are empowered with ownership and have responsibility for maintenance.ConclusionsSHP will remain small from a macro perspective but could still play a key role in further improving energy access and equity in remote areas. Key initiatives to facilitate this development could include local-level capacity building and project participation and the adequate pricing of negative externalities from fossil fuel projects. Indonesia’s long experience with SHP carries lessons for other developing countries.

Integrating spatial analytics in power system planning techniques for the green energy transition

Abstract. Fossil fuel energy generation contributes significantly to greenhouse gas emissions globally. Energy transition towards sustainable, low-carbon energy needs to occur. South Africa has pledged to achieve a net-zero carbon economy by 2050 and in-line with this energy transition. The country has implemented the Renewable Energy Independent Power Procurement Programme (REIPPPP) to promote private investment within the energy sector. As new capacity is constructed, it requires the national grid to move from a vertically integrated passive power model to a deregulated active power flow due to the distributed sources of energy. In this paper, a method for connecting distributed power producers is introduced by providing candidate locations for Network Planners to develop insights for optimal placement of collector stations that connect multiple power producers in an orderly manner onto the electrical grid. This method uses buffer distances and Voronoi polygons from the stations on the national grid in order for the power producers to be aggregated and assigned connection to a collector station. Furthermore, this paper proposes a model for potential power producers that allows Network Planners to adequately plan for future grid access applications.

From concessions to competition: A journey through the evolution of the Philippine electric grid system, 1892–2021

This article traces the development of energy generation in the Philippines, tracing its origins back to 1892 and spanning through the significant reforms ushered in by the Electric Power Industry Reform Act (EPIRA) in 2001, and the subsequent two decades. The early chapters of this history witnessed the establishment of pivotal companies like Compania La Electricista and Manila Railway & Light Company (Meralco), which hinged on foreign investment and expertise. Meralco’s expansion encompassed the establishment of diverse power plants, including hydroelectric facilities, to cater to the escalating electricity demand. However, concerns surrounding foreign dominance and reliance on imported resources led to the creation of the National Power Corporation (NPC) in 1936 tasked with harnessing hydraulic power and increasing state participation in the energy sector. The post-war era witnessed the NPC’s significant role in bolstering the nation’s growing economy, especially through its expansive power development program and the nationalization of the electric power landscape. Despite progress in rural electrification, the NPC encountered challenges like financial constraints, political complexities, and the contentious Bataan Nuclear Power Plant project, which impeded its operational efficiency. The 1990 s unveiled a severe power crisis due to financial constraints and inadequate infrastructure. In response, the government sought to invigorate the sector by incorporating private sector engagement through independent power producers. To rectify inefficiencies and stimulate competition, the EPIRA was enacted in 2001 to steer the energy sector toward a comprehensive overhaul by restructuring the power industry and divesting NPC’s generation and transmission assets. This article provides insights into the historical trajectory of the Philippine energy sector, culminating in a series of reforms aimed at cultivating a more streamlined and competitive power sector, positioned to meet the nation’s ever-evolving energy needs.

Renewable energy, social disruption and formalising the social licence to operate in South Africa

AbstractA social licence to operate and corporate social responsibility are often applied voluntarily to ensure a positive relationship between businesses and communities. But South Africa's Renewable Energy Independent Power Producer Programme makes investment in local socio‐economic development a contractual obligation. To assess the implications of this legalised approach to CSR and the social licence to operate, between September 2019 and January 2020 we conducted seven focus group discussions and 24 key informant interviews in two towns in South Africa's Northern Cape province. The data were analysed thematically and triangulated with data on crime, municipal finance and house prices. Our concerns about the legalised approach are that it does not require local consent; it reduces local development to a needs analysis; it does not require local collaborative planning, despite adverse consequences such as social disruption; it bypasses local organisation and accountability; it does not provide cheaper local electricity; and it offers no guidelines for decommissioning.

Correction: Analysis of the Effect of Different Time Resolutions Between Day-Ahead and Real-Time Markets on Offer Strategies of Wind Power Producers

Correction: Analysis of the Effect of Different Time Resolutions Between Day-Ahead and Real-Time Markets on Offer Strategies of Wind Power Producers

Evaluation of the solid-state breakers on the performance of power distribution grids with high-RES penetration

Electricity is currently one of the most promising components for the future growth of our communities. Energy consumption will skyrocket in the near future, necessitating massive reforms in the energy industry to ensure that contemporary cities have enough electricity. Furthermore, climate change necessitates a greater than ever before energy transition from fossil fuels to greener power generating sources such as wind, solar power, or other more newly discovered technologies such as hydrogen. However, significant improvements to the power distribution and transmission grids are required for high - RES penetration in the energy system. To illustrate, power networks have been built radially, with energy flowing in just one direction, from the original power source to the consumer, with no provision for the penetration of independent power producers (ipps) across power grids. As a result, studying and developing such significant components, including power protection systems, is now seen as a critical undertaking in order to minimize unanticipated breakdowns and optimize grid availability. The goal of this work is to analyze a novel and promising technology in the power protection industry known as Solid State Breakers (SSB) and its contribution to the efficient operation of power distribution networks with high-RES penetration.

Simultaneous Network Reconfiguration and Wind Power Plants Participation in Day‐Ahead Electricity Market Considering Uncertainties

Recently, the participation of wind sources in electricity markets has become a severe challenge due to their intermittent nature. Reconfiguration of power systems can effectively reduce the negative effects of uncertainties. So, this article presents a new method for participating in wind power plants and uncertain customers in a day‐ahead electricity market considering the reconfiguration process. This method tries to maximize social welfare through a two‐level optimization problem. To this end, uncertainties are modeled using the empirical cumulative distribution function and the Monte–Carlo method, and a probabilistic analysis of the market is performed. Then, by defining some indices to evaluate the participants’ satisfaction and using the analytic hierarchy process method (AHP), a new objective function is proposed so that its minimization leads to planning the system configuration and market participants to optimize mentioned indices. The proposed methodology also assumes that the participation of uncertain participants in the spot market will eliminate the imbalances caused by uncertainties. The simulations are implemented using real data on an 8‐bus sample network. The results confirm the efficiency of the proposed method in significantly reducing power producers’ and customers’ costs along with increasing total income and profit from the sale of energy.

Wind energy potential and its current status in India

Currently, India’s population is growing at a rate comparable to other countries, which means we need to provide more energy. Most of the world’s energy is generated by coal-fired thermal power plants, despite the fact that this method results in a significant increase in the number of pollutants released into the atmosphere. Wind power is a kind of environment-friendly, pollution-free green energy that comes from renewable sources. India is one of the top five producers of wind power in the world. This article throws light upon the current status of wind energy in India, as well as its potential and regulations governing wind energy. India has a significant untapped potential for wind power generation, and this article details that potential as well as wind power generation in various states of India. When it comes to the production of wind power in India, Tamil Nadu is the most productive states.