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| Content Provider | IEEE Xplore Digital Library |
|---|---|
| Author | Doorman, G. Botterud, A. |
| Copyright Year | 2008 |
| Abstract | Summary form only given. In this paper a stochastic dynamic optimization model is used to analyze the effect of different market designs on generation investment in restructured power systems. The expansion decisions of profit-maximizing investors are simulated under four different market designs: Energy only, capacity payment, capacity obligation, and capacity subscription. The results show that the overall social welfare is reduced compared to a centralized social welfare optimization for the first three policies. In particular, an energy only market with a low price cap leads to insufficient generation investments. Capacity payments and obligations give additional investment incentives and more generating capacity, but also result in a considerable transfer of wealth from consumers to producers due to the capacity payments. In contrast, the capacity subscription policy increases the social welfare, and both producers and consumers benefit. This is possible because capacity subscription explicitly utilizes differences in consumers' preferences for uninterrupted supply. This advantage must be weighed against the cost of implementation, which is not included in the model. |
| Starting Page | 1 |
| Ending Page | 1 |
| File Size | 215127 |
| Page Count | 1 |
| File Format | |
| ISBN | 9781424419050 |
| ISSN | 19325517 |
| DOI | 10.1109/PES.2008.4596371 |
| Language | English |
| Publisher | Institute of Electrical and Electronics Engineers, Inc. (IEEE) |
| Publisher Date | 2008-07-20 |
| Publisher Place | USA |
| Access Restriction | Subscribed |
| Rights Holder | Institute of Electrical and Electronics Engineers, Inc. (IEEE) |
| Subject Keyword | Subscriptions Power system dynamics Optimization Power systems Analytical models Stochastic processes |
| Content Type | Text |
| Resource Type | Article |
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