Modeling market power in Korea's emerging power market

The Korean power market is being formed from the unbundled generation, transmission and distribution assets of Korea Electric Power Corporation. The KEPCO generation has been allocated to six independent gencos with a combined generating capacity of 46,629 MW in 2002. This gave an 11% margin over the peak load that year (41,921 MW).     

Assessment of massive integration of photovoltaic system considering rechargeable battery in Japan with high time-resolution optimal power generation mix model

Maximizing renewables in the country's power system has been a key political agenda in Japan after the Fukushima nuclear disaster. This paper investigates the potential of PV resource, which could be systematically integrated into the Japanese power system, using a high time-resolution optimal power generation mix model. The model allows us to explicitly consider actual PV and wind output variability in 10-min time resolution for 365 days. Simulation results show that, as PV expands, the growth of PV integration into the grid slows down when the installed PV capacity is more than the scale of the peak demand, although Japan has immense potential of installable PV capacity – equivalent to 40 times of the peak. Secondly, the results imply that a large-scale PV integration potentially decreases the usage ratio of LNG combined cycle (LNGCC) in specific seasons, which is a challenge for utility companies to ensure that LNGCC is used as a profitable compensating generator for PV variability. Finally, a sensitivity analysis on rechargeable battery cost suggests that the reason for suppressing the PV output instead of storing its surplus output by the battery can be attributed to the high battery cost; hence, the improvement of its economic performance is significant to integrate the massive PV energy.     

The role of energy limited hydro equipment in an optimal plant mix

The main purpose of this paper is to highlight the influence of the main characteristics of hydropower on the choice of an optimal generating plant mix. Marginal conditions for a cost minimizing approach are developed while incorporating the effects of the rising costs of hydraulic forces, the cost of added hydroturbines (energy limited), and the costs of developing different hydro sites. It is seen that the main difference between the marginal conditions for a hydro system and for a thermal one comes from the limited availability of water power. This framework is then applied to data drawn from the current expansion programme of Quebec Hydro. Although the analytical framework relies on simplifying assumptions, the results are rather close to those provided by Quebec Hydro. The results are then used to evaluate the marginal costs of providing additional power for every hour of the year. These marginal generation costs range from a high of 6.0¢ during the peak period to a low of 1.6 ¢ for the base period, both being measured in 1980 dollars.     

Determining optimal electricity technology mix with high level of wind power penetration

Notwithstanding its variability and limited controllability, wind power is expected to contribute strongly to electricity generation from renewable energy sources in the coming decades. Treating wind power as non-dispatchable by subtracting its output from the original load profile, results in a net load profile, which must be covered by conventional power generation. The screening curve methodology is a first approximation to find the optimal generation technology mix, based on relative cost levels. However, increased variability of the net load profile, due to wind power generation, strongly influences system operation. Therefore a static linear programming investment model is developed to determine the optimal technology mix. This alternative methodology shows a reduced capacity of inflexible generation after including operational constraints to properly account for net load variability. In order to illustrate this methodology, an example is set up, showing the sensitivity with respect to ramp rates of conventional generation, transmission interconnection and energy storage. The comparison of those different sources of system flexibility suggests that energy storage facilities better facilitate the integration of wind power generation.     

Investment incentives in the Korean electricity market

This paper develops a model-based analysis of the effects of various capacity incentive systems on new investment in the Korean electricity market. The restructuring process in Korea allocated power generation to six firms, competing within a wholesale market, albeit strictly on a cost basis. Because of this cost-based pool, capacity payments were also introduced to encourage new investment. However, it is an open question whether the current fixed capacity payment scheme is enough to secure resource adequacy, and consideration is being given to alternative mechanisms such as the use of LOLP. Using a detailed market simulation model, based on system dynamics, we compare these approaches in terms of how they may influence the investors’ decisions and thereby determine the system reserve margin. The simulation results suggest that there may be serious problems in staying with the current fixed capacity payments in order to achieve resource adequacy. In contrast, an LOLP-based capacity mechanism may, in the longer term, increase the reserve margin compared with a fixed capacity payment. More generally, this paper indicates how crucial the effective modeling of the investment behavior of the independent power producers is for adequate policy support, even if they only constitute a fringe in a substantially centrally influenced market.     

The market and consumer welfare effects of mid-level ethanol blends in the US fuel market

This study examines the prospect that a consumer-driven market could eventually replace the myriad regulations and demand quotas in the US ethanol and gasoline fuel market. Given efficient households that minimize the cost of operating automobiles, recent vehicle technology that improves blended fuel substitution, and typical market conditions of the last five years, blended fuels with 20% ethanol concentration could occupy a volume of 82.2 billion gallons in a 138.3 billion gallon gasoline market. The consumer welfare gain associated with blended fuel is $15.9 billion annually for US consumers, or about $1000 over the life of a vehicle.The ethanol demand associated with a voluntary blended fuel market is 16.4 BGY, slightly more than the conventional component of the Renewable Fuels Standard. It is time to replace the corn RFS with a free market. But an active competition policy in the fuel marketing system may also be required. Intervention for the impending Biomass Ethanol Industry, such as a subsidy or an exemption a carbon tax, may also be in order.     

Intermittently renewable energy,optimal capacity mix and prices in a deregulated electricity market

This paper assesses the effect of intermittently renewable energy on generation capacity mix and market prices. We consider two generating technologies: (1) conventional fossil-fueled technology such as combined cycle gas turbine (CCGT), and (2) sunshine-dependent renewable technology such as photovoltaic cells (PV). In the first stage of the model (game), when only the probability distribution functions of future daily electricity demand and sunshine are known, producers maximize their expected profits by determining the CCGT and PV capacity to be constructed. In the second stage, once daily demand and sunshine conditions become known, each producer selects the daily production by each technology, taking the capacities of both technologies as given, and subject to the availability of the PV capacity, which can be used only if the sun is shining. Using real-world data for Israel, we confirm that the introduction of PV technology amplifies price volatility. A large reduction in PV capacity cost increases PV adoption but may also raise the average price. Thus, when considering the promotion of renewable energy to reduce CO₂ emissions, regulators should assess the behavior of the electricity market, particularly with respect to characteristics of renewable technologies and demand and supply uncertainties.     

Technology mix alternatives with high shares of wind power and photovoltaics—case study for Spain

The shift to a low carbon society is an issue of highest priority in the EU. For electricity generation, such a target counts with three main alternatives: renewable energies, nuclear power and carbon capture and storage. This paper focuses on the renewables’ alternative. Due to resource availability, a technology mix with a high share of PV and wind power is gaining increasing interest as a major solution for several EU member states and in part for the EU collectively to achieve decarbonization and energy security with acceptable costs. Due to their intermittency, the integration of high shares of PV and wind power in the electricity supply is challenging. This paper presents a techno-economic assessment of technology mix alternatives with a high share of PV and wind power in Spain, as an example. Thereby, the focus is on the option of increasing wind curtailment versus substituting rigid baseload generation in favor of the more flexible gas turbines and combined cycle gas turbines.     

Probabilistic multi-objective optimal power flow considering correlated wind power and load uncertainties

Increasing penetration of wind power in power systems causes difficulties in system planning due to the uncertainty and non dispatchability of the wind power. The important issue, in addition to uncertain nature of the wind speed, is that the wind speeds in neighbor locations are not independent and are in contrast, highly correlated. For accurate planning, it is necessary to consider this correlation in optimization planning of the power system. With respect to this point, this paper presents a probabilistic multi-objective optimal power flow (MO-OPF) considering the correlation in wind speed and the load. This paper utilizes a point estimate method (PEM) which uses Nataf transformation. In reality, the joint probability density function (PDF) of wind speed related to different places is not available but marginal PDF and the correlation matrix is available in most cases, which satisfy the service condition of Nataf transformation. In this paper biogeography based optimization (BBO) algorithm, which is a powerful optimization algorithm in solving problems including both continuous and discrete variables, is utilized in order to solve probabilistic MO-OPF problem. In order to demonstrate performance of the method, IEEE 30-bus standard test case with integration of two wind farms is examined. Then the obtained results are compared with the Monte Carlo simulation (MCS) results. The comparison indicates high accuracy of the proposed method.     

Market power analysis for the Iranian electricity market

The market power problem in Iranian electricity market is addressed in this study. This paper by using various structural indices of market power and reviewing market results analyzes the intensity of competition in Iran’s electricity market and examines whether this market is functioning at an appropriate level of efficiency. In this article the most well-known indices of market power are calculated in two approaches for two different scenarios (current situation and future outlook of generation sector’s ownership in Iran’s power industry). Comparing the results of these scenarios promises more competitive market for the second scenario. Calculating Residual Supply Index for Iran’s power market shows despite admissible values of concentration ratios, due to supply scarcity during periods when the demand is close to the total available capacity, some suppliers can exercise market power even with a relatively small market share. The most important price and load indices like weighted average prices and load/price duration curves of Iranian electricity market during March 2007–March 2008 are also analyzed in this paper. These results imply the existence of economic withholding. The main limiting factors of competition and significant implemented countermeasures for market power mitigation in Iran’s electricity market are also mentioned.     

Integration of wind power in the liberalized Dutch electricity market

Wind power is becoming a large‐scale electricity generation technology in a number of European countries, including the Netherlands. Owing to the variability and unpredictability of wind power production, large‐scale wind power can be foreseen to have large consequences for balancing generation and demand in power systems. As an essential aspect of the Dutch market design, participants are encouraged to act according to their energy programs, as submitted day‐ahead to the system operator. This program responsibility shifts the burden of balancing wind power away from the system operator to the market. However, the system operator remains the responsible party for balancing any generation/load imbalances that may still be arising in real time. In this article, features that are unique for the Dutch market design are presented and their implications on the system integration of wind power are investigated. It is shown that the Dutch market design penalizes the intermittent nature of wind power. A discussion of opportunities and threats of balancing wind power by use of market forces is provided. Last, an outline is given of future work. Copyright © 2006 John Wiley &Sons, Ltd.     

沼气发电技术及沼气燃料电池在我国的应用状况与前景

沼气发电技术是一种清洁的发电技术。文章针对目前我国已有的沼气发电技术进行了技术评价,综述了这种技术的发展现状与近年来的应用情况;燃料电池也是一种新型高效、清洁的发电技术,文章对以沼气为燃料的燃料电池技术进行了介绍,对我国沼气利用技术的发展具有参考价值。     

A proper spent nuclear fuel management strategy could enhance the continuity of nuclear power in the Spanish energy mix

This article presents two economic analyses performed with the Mariño model, which was specially designed to analyse the costs of different spent nuclear fuel (SNF) management strategies in the real Spanish context. These analyses are: (a) a Monte Carlo study for those strategies and (b) the effects of a longer operational lifetime for the Spanish nuclear power plants (NPPs) on the costs of spent nuclear fuel (SNF) management. For the first analysis, a triangular distribution for the different unitary costs was assumed and the data and assumptions from numerous studies were used to obtain the values required for the distribution. The second analysis was performed for the current official shutdown dates for the NPPs, and the results were compared to other operational lifetime scenarios. The main assumption for these scenarios was a progressive shutdown of the reactors, in order to avoid numerous shutdowns in a few years. These scenarios were proposed for 40 to 60 years of mean operational lifetime of the reactors. The results show that, for all scenarios analysed, the additional electricity production due to longer operational lifetimes compensate the extra costs caused by the larger amount of SNF to be managed. Additionally, for the current SNF management strategy, a progressive shutdown at 40 years of mean operational lifetime has shown to entail lower costs than the official shutdown scenario. However, a strategy without a centralised interim storage facility would be the most economically favourable one for all the scenarios analysed.     

Optimal operating conditions to maximize the net power of polymer electrolyte membrane fuel cells: The stack-system interface of a commercial 18 kW module

A new, experimental method based on air flow rate rather than current is presented to optimize operating parameters for the stacks and systems of proton exchange membrane fuel cells (PEMFCs) for maximizing their net power. This approach is illustrated for a commercial 18 kW PEMFC module. The impact of contamination pressure drop across the cathode air filter is also investigated on the compressor behavior. It is further shown that a 4V reduction in the compressor voltage reduces its power consumption by 9.1%. Using the 3D graphs of the power-pressure-flow data, it is found that the stack pressure of 180 kPaa is superior to the higher tested pressures as it enhances the net power by 7.0 and 13.7% at different conditions. Application of the present study will lead to the development of PEMFCs with higher power output by optimizing stack pressure, stoichiometry and air flow to properly deliver the system design specifications.     

Spatial dependence in wind and optimal wind power allocation: A copula-based analysis

The investment decision on the placement of wind turbines is, neglecting legal formalities, mainly driven by the aim to maximize the expected annual energy production of single turbines. The result is a concentration of wind farms at locations with high average wind speed. While this strategy may be optimal for single investors maximizing their own return on investment, the resulting overall allocation of wind turbines may be unfavorable for energy suppliers and the economy because of large fluctuations in the overall wind power output. This paper investigates to what extent optimal allocation of wind farms in Germany can reduce these fluctuations. We analyze stochastic dependencies of wind speed for a large data set of German on- and offshore weather stations and find that these dependencies turn out to be highly nonlinear but constant over time. Using copula theory we determine the value at risk of energy production for given allocation sets of wind farms and derive optimal allocation plans. We find that the optimized allocation of wind farms may substantially stabilize the overall wind energy supply on daily as well as hourly frequency.     

US power plant location and fuel mix: Opportunities for electricity exporting regions

There is considerable discussion in the USA concerning electricity trade between regions. The transmission system was not designed to accommodate interregional power trade, but regional differences in reserve margins and power generation costs have encouraged power trade to occur. Utilities with abundant coal-fired capacity in the Appalachians and Midwest are calling power to east ctilities who wish to restrict their oil burn. Interregional power trade has benefitted both buyer and seller. Many in electricity exporting regions view electricity exports as a source of revenue and are taking steps to maintain or increase power sales.     

Simulation of the market penetration of hydrogen fuel cell vehicles in Korea

As fuel cell technologies are developed, hydrogen‐powered vehicles are receiving more interest. The hydrogen economy, particularly hydrogen‐powered vehicle penetration into the Korean transportation market, is studied in this paper. Vensim, a system dynamic code, was used to simulate the dynamics in the transportation market, assuming various types of vehicles such as gasoline, hybrid electricity, and hydrogen powered. Market share for each vehicle was predicted using the currently available data. The results showed that the hydrogen era will not be as bright as predicted by many people. The main barrier is the fuel cell cost. Thus, in order to expand the fuel cell vehicles (FCVs) market, hydrogen fuel cell cost needs to be dramatically reduced. Hydrogen‐powered FCV cost, including operating and capital costs, should reach $0.16 per kilometer in order to seize 50% of the newly created transportation market. However, if strong policies or subsidies are implemented, the results predicted here will be affected. Copyright © 2007 John Wiley & Sons, Ltd.     

The optimal performance estimation for an unknown PEMFC based on the Taguchi method and a generic numerical PEMFC model

In this paper, a new approach to estimate the optimal performance of an unknown proton exchange membrane fuel cell (PEMFC) has been proposed. This proposed approach combines the Taguchi method and the numerical PEMFC model. Simulation results obtained using the Taguchi method help to determine the value of control factors that represent the tested unknown PEMFC. The objective of reducing both fuel consumption and operation cost can be achieved by determining the parameters for the unknown PEMFC. In addition, the optimal operation power for the tested unknown PEMFC can also be predicted. Experimental results on the test equipment show that the proposed approach is effective in optimal performance estimation for the tested unknown PEMFC, thus demonstrating the success achieved by combining the Taguchi method and the numerical PEMFC model.     

Development of a virtual power market model to investigate strategic and collusive behavior of market players

In this paper, a virtual power market model is proposed to investigate the behavior of power market players from regulator's point of view. In this approach, strategic players are modeled in a multi-agent environment. These agents which are virtual representative of actual players forecast the prices and participate in the markets, exactly the same as real world situation. In addition, the role of ISO is encountered by using security constraint unit commitment (SCUC) and security constraint economic dispatch (SCED) solutions. Moreover, the interaction between market players is modeled using a heuristic dynamic game theory algorithm based on the supply function equilibria (SFE). In addition to the collusive behavior, using the proposed model, the short-term strategic behavior of players, which their effects will appear in long-term, can be simulated.The proposed model enables the market regulators to make decision before implementing new market rules with the confidence of their results. To represent the effectiveness of the proposed method, a case study including wind power plants is considered and the impact of various market rules on players’ behavior is simulated and discussed. Numerical studies indicate that simulating the strategic and collusive behavior prior to any change in the market rules is necessary.     

Potential of trading wind power as regulation services in the California short-term electricity market

A short-term electricity market is usually composed of the energy market and ancillary service market. However, wind power is not allowed to be traded in ancillary service markets although it has been proven technically feasible to be regulation services. This paper aims to explore the market potential of trading wind power as regulation services in the California electricity market. A model for wind power trade in the day-ahead (DA) market is established considering the uncertainties of market prices and wind power. An optimal trading strategy for wind power producers is derived by using an analytical algorithm. Trading wind power as regulation is tested by using actual data and the impacts of market control on the market outcome are discussed. The results show that, based on the current framework of the California electricity market, wind power producers can earn much more money if they bid in the DA energy and regulation markets than if they only bid in the DA energy market. The results also show that the potential to enhance profit for wind power producers is larger in the regulation down market than in the regulation up market.