1. Strategic Policymaking for Implementing Renewable Portfolio Standards: A Tri-Level Optimization Approach.
- Author
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Kim, Jip, Bialek, Sylwia, Unel, Burcin, and Dvorkin, Yury
- Subjects
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RENEWABLE portfolio standards , *POLICY sciences , *ELECTRIC utilities , *ELECTRICITY markets , *RENEWABLE energy sources , *INDEPENDENT power producers , *RENEWABLE energy standards , *ATHLETIC fields , *ENVIRONMENTAL standards - Abstract
Appropriately designed renewable support policies can play a leading role in promoting renewable expansions and contribute to low emission goals. Meanwhile, ill-designed policies may distort electricity markets, put power utilities and generation companies on an unlevel playing field and, in turn, cause inefficiencies. This paper proposes a framework to optimize policymaking for renewable energy sources, while incorporating conflicting interests and objectives of different stakeholders. We formulate a tri-level optimization problem where each level represents a different entity: a state regulator, a power utility and a wholesale electricity market. To solve this tri-level problem, we exploit optimality conditions and develop a modification of the Column-and-Cut Generation (C&CG) algorithm that generates cuts for bilinear terms. The case study based on the ISO New England 8-zone test system reveals different policy trade-offs that policymakers face under different decarbonization goals and implementation scenarios. [ABSTRACT FROM AUTHOR]
- Published
- 2021
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