arXiv · 2009.01336
Strategic Policymaking for Implementing Renewable Portfolio Standards: A Tri-level Optimization Approach
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.
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Jip Kim, Sylwia Bialek, Burcin Unel, Yury Dvorkin. 2021-02-12. Strategic Policymaking for Implementing Renewable Portfolio Standards: A Tri-level Optimization Approach. https://arxiv.org/abs/2009.01336
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