Strategic Investment in Transmission and Energy Storage in Electricity Markets
The variability of renewable energy and transmission congestion provide opportunities for arbitrage by merchants in deregulated electricity markets. Merchants strategically invest to maximize their profits. This paper proposes a joint investment framework for renewable energy, transmission lines, an...
| Main Authors: | , , |
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| Format: | Article |
| Language: | English |
| Published: |
IEEE
2022-01-01
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| Series: | Journal of Modern Power Systems and Clean Energy |
| Subjects: | |
| Online Access: | https://ieeexplore.ieee.org/document/9531570/ |
| _version_ | 1798024659930710016 |
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| author | Kunpeng Tian Weiqing Sun Dong Han |
| author_facet | Kunpeng Tian Weiqing Sun Dong Han |
| author_sort | Kunpeng Tian |
| collection | DOAJ |
| description | The variability of renewable energy and transmission congestion provide opportunities for arbitrage by merchants in deregulated electricity markets. Merchants strategically invest to maximize their profits. This paper proposes a joint investment framework for renewable energy, transmission lines, and energy storage using the Stackelberg game model. At the upper level, merchants implement investment and operation strategies for deregulated transmission and energy storage to maximize profits. At the middle level, central planners seek to maximize social welfare through investments in centralized renewable energy and energy storage. At the lower level, independent system operators jointly optimize the energy and reserve markets to minimize the total operating costs. Merchants are remunerated through financial rights, which are a settlement method based on locational marginal price. The trilevel optimization problem is reformulated as a tractable single-level one using Karush-Kuhn-Tucker (KKT) conditions and strong duality theory. The interaction between merchants and central planners is studied with an example based on the IEEE 30-bus test system. The assignment of weight coefficients to the corresponding stochastic scenarios can help merchants avoid investment risk, and their effectiveness is verified with the IEEE 118-bus test system. |
| first_indexed | 2024-04-11T18:06:14Z |
| format | Article |
| id | doaj.art-51a0b06cb244423ba80e9f312b0d5e7a |
| institution | Directory Open Access Journal |
| issn | 2196-5420 |
| language | English |
| last_indexed | 2024-04-11T18:06:14Z |
| publishDate | 2022-01-01 |
| publisher | IEEE |
| record_format | Article |
| series | Journal of Modern Power Systems and Clean Energy |
| spelling | doaj.art-51a0b06cb244423ba80e9f312b0d5e7a2022-12-22T04:10:18ZengIEEEJournal of Modern Power Systems and Clean Energy2196-54202022-01-0110117919110.35833/MPCE.2020.0009279531570Strategic Investment in Transmission and Energy Storage in Electricity MarketsKunpeng Tian0Weiqing Sun1Dong Han2University of Shanghai for Science and Technology,Department of Control Science and Engineering,Shanghai,ChinaUniversity of Shanghai for Science and Technology,Department of Electrical Engineering,Shanghai,ChinaUniversity of Shanghai for Science and Technology,Department of Electrical Engineering,Shanghai,ChinaThe variability of renewable energy and transmission congestion provide opportunities for arbitrage by merchants in deregulated electricity markets. Merchants strategically invest to maximize their profits. This paper proposes a joint investment framework for renewable energy, transmission lines, and energy storage using the Stackelberg game model. At the upper level, merchants implement investment and operation strategies for deregulated transmission and energy storage to maximize profits. At the middle level, central planners seek to maximize social welfare through investments in centralized renewable energy and energy storage. At the lower level, independent system operators jointly optimize the energy and reserve markets to minimize the total operating costs. Merchants are remunerated through financial rights, which are a settlement method based on locational marginal price. The trilevel optimization problem is reformulated as a tractable single-level one using Karush-Kuhn-Tucker (KKT) conditions and strong duality theory. The interaction between merchants and central planners is studied with an example based on the IEEE 30-bus test system. The assignment of weight coefficients to the corresponding stochastic scenarios can help merchants avoid investment risk, and their effectiveness is verified with the IEEE 118-bus test system.https://ieeexplore.ieee.org/document/9531570/Strategic investmentStackelberg game modelfinancial rightlocational marginal pricemerchantcentral planner |
| spellingShingle | Kunpeng Tian Weiqing Sun Dong Han Strategic Investment in Transmission and Energy Storage in Electricity Markets Journal of Modern Power Systems and Clean Energy Strategic investment Stackelberg game model financial right locational marginal price merchant central planner |
| title | Strategic Investment in Transmission and Energy Storage in Electricity Markets |
| title_full | Strategic Investment in Transmission and Energy Storage in Electricity Markets |
| title_fullStr | Strategic Investment in Transmission and Energy Storage in Electricity Markets |
| title_full_unstemmed | Strategic Investment in Transmission and Energy Storage in Electricity Markets |
| title_short | Strategic Investment in Transmission and Energy Storage in Electricity Markets |
| title_sort | strategic investment in transmission and energy storage in electricity markets |
| topic | Strategic investment Stackelberg game model financial right locational marginal price merchant central planner |
| url | https://ieeexplore.ieee.org/document/9531570/ |
| work_keys_str_mv | AT kunpengtian strategicinvestmentintransmissionandenergystorageinelectricitymarkets AT weiqingsun strategicinvestmentintransmissionandenergystorageinelectricitymarkets AT donghan strategicinvestmentintransmissionandenergystorageinelectricitymarkets |