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).     

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.     

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。     

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.     

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.     

Economics of hydrogen production and utilization strategies for the optimal operation of a grid-parallel PEM fuel cell power plant

This paper integrates the hydrogen production and utilization strategies with an economic model of a PEM fuel cell power plant (FCPP). The model includes the operational cost, thermal recovery, power trade with the local grid, and hydrogen management strategies. The model is used to determine the optimal operational strategy, which yields the minimum operating cost. The optimal operational strategy is achieved through estimation of the following: hourly generated power, thermal power recovered from the FCPP, power trade with the local grid, and hydrogen production. An evolutionary programming-based technique is used to solve for the optimal operational strategy. The model is tested using different seasonal load demands. The results illustrate the impact of hydrogen management strategies on the operational cost of the FCPP when subjected to seasonal load variation. Results are encouraging and indicate viability of the proposed model.     

生物质气化高温燃料电池一体化发电技术研究

介绍了国内外生物质气化高温燃料电池一体化发电技术的研究现状，主要包括高温燃料电池的特点和研究现状；一体化发电技术的理论模拟；国外相关的试验研究和一体化示范工程。分析了生物质气化高温燃料电池一体化发电技术在我国应用的可行性，提出了目前需要解决的关键技术问题。     

On the evaluation of market power and market dominance—The Nordic electricity market

This paper studies different concentration and dominance measures using structural indexes used to initially screen the competitive situation in a market. The Nordic and Swedish electricity markets are used as the empirical cases. Market concentration issues in the Nordic electricity market in general and in Sweden in particular have been, at least in initial screenings, approached by the Herfindahl–Hirschman Index (HHI). This article uses an alternative measure to HHI, which is based on market shares of the two largest firms in the market. The results shows that only the Swedish wholesale market has a firm that can be regarded as dominant, but only during very short periods. The results from a hypothetical merger between the second and third largest company in the Swedish wholesale market shows that when the dominant position of the largest firm is reduced, by increasing the size of the second largest firm, the threshold value indicates that competition actually will increase (contradicting to the HHI).     

The cost of fuel economy in the Indian passenger vehicle market

To investigate how fuel economy is valued in the Indian car market, we compute the cost to Indian consumers of purchasing a more fuel-efficient vehicle and compare it to the benefit of lower fuel costs over the life of the vehicle. We estimate hedonic price functions for four market segments (petrol hatchbacks, diesel hatchbacks, petrol sedans, and diesel sedans) to compute 95% confidence intervals for the marginal cost to the consumer for an increase in fuel economy. We find that the associated present value of fuel savings falls within the 95% confidence interval for most specifications, in all market segments, for the years 2002 through 2006. Thus, we fail to consistently reject the hypothesis that consumers appropriately value fuel economy.     

Optimal operability by design in a methanol reforming-PEM fuel cell autonomous power system

Enhanced process operability through suitable design decisions and control structure selection is achieved for a methanol reforming – proton exchange membrane (PEM) fuel cell autonomous power system. Two alternative flowsheet configurations are formulated and evaluated based on their ability to compensate for the effects of multiple simultaneous disturbances, such as catalyst deactivation, on the integrated power system. A previously developed disturbance sensitivity control (DiSc) framework, investigates the optimal steady-state response of a multi-variable control system applied to the process. The overall performance is assessed based on the steady-state effort required by the system controls to maintain specific targets at the desired set points. The sensitivity analysis utilizes non-linear models that accurately calculate the steady-state contribution of a set of potential manipulated variables toward satisfying the control objectives optimally. A steady-state controllability index that encompasses the relative variation of the system controlled and manipulated variables from desired operating points and the system efficiency expressed in terms of mass of fuel per generated kWh are utilized for the overall assessment of the process flowsheet operability. The design analysis framework enables the identification of process flowsheets and control structures that ensure high efficiency, improved behavior under disturbance influence, and efficient handling of system interactions.     

Multiobjective clearing of reactive power market in deregulated power systems

This paper presents a day-ahead reactive power market which is cleared in the form of multiobjective context. Total payment function (TPF) of generators, representing the payment paid to the generators for their reactive power compensation, is considered as the main objective function of reactive power market. Besides that, voltage security margin, overload index, and also voltage drop index are the other objective functions of the optimal power flow (OPF) problem to clear the reactive power market. A Multiobjective Mathematical Programming (MMP) formulation is implemented to solve the problem of reactive power market clearing using a fuzzy approach to choose the best compromise solution according to the specific preference among various non-dominated (pareto optimal) solutions. The effectiveness of the proposed method is examined based on the IEEE 24-bus reliability test system (IEEE 24-bus RTS).     

Interaction among competitive producers in the electricity market: An iterative market model for the strategic management of thermal power plants

The liberalization of the electricity sector requires utilities to develop sound operation strategies for their power plants. In this paper, attention is focused on the problem of optimizing the management of the thermal power plants belonging to a strategic producer that competes with other strategic companies and a set of smaller non-strategic ones in the day-ahead market. The market model suggested here determines an equilibrium condition over the selected period of analysis, in which no producer can increase profits by changing its supply offers given all rivals’ bids. Power plants technical and operating constraints are considered. An iterative procedure, based on the dynamic programming, is used to find the optimum production plans of each producer. Some combinations of power plants and number of producers are analyzed, to simulate for instance the decommissioning of old expensive power plants, the installation of new more efficient capacity, the severance of large dominant producers into smaller utilities, the access of new producers to the market. Their effect on power plants management, market equilibrium, electricity quantities traded and prices is discussed.     

Impact of heat,power and hydrogen generation on optimal placement and operation of fuel cell power plants

In this paper, a stochastic model is proposed for planning the location and operation of Fuel Cell Power Plants (FCPPs) as Combined Heat, power, and Hydrogen (CHPH) units. Total cost, emissions of FCPPs and substation, and voltage deviation are the objective functions to be minimized. Location and operation of FCPPs as CHPH are considered in this paper while their investment cost is not taken into account. In the proposed model, indeterminacy refers to electrical and thermal loads forecasting, pressure of oxygen and hydrogen, and the nominal temperature of FCPPs. In this method, scenarios are produced using roulette wheel mechanism and probability distribution function of input random variables. Using this method, the probabilistic problem is considered to be distributed as some scenarios and consequently probabilistic problem is considered as combination of some deterministic problems. Considering the nature of objective functions, the problem of locating and operating FCPPs as CHPH is considered as a mixed integer nonlinear problem. A Self Adaptive Charged System Search (SACSS) algorithm is employed for determining the best Pareto optimal set. Furthermore, a set of non-dominated solutions is saved in repository during simulation procedure. A 69-bus distributed system is used for verifying the beneficiary proposed method.