Resource Adequacy in Electricity Markets With Renewable Energy
Date Published: July 2019
Authors: Jonghwan Kwon, Zhi Zhou, Todd Levin, Audun Botterud
To investigate the impact of high penetration levels of variable renewable energy alongside various market designs on achieving resource adequacy, the paper designs a market-based resource adequacy assessment framework, formulated as a bi-level optimization problem. This framework captures the capacity investment strategy and retirement decision-making of profit-maximizing generation companies. To enhance the computational performance, this framework employs a Lagrangian decomposition algorithm. In a case study of the ERCOT system, the model shows a higher planning efficiency compared with a traditional centralized least-cost planning model. The results also emphasize the importance of considering strategic behavior in a competitive market framework when studying resource adequacy.