EURO 2024 Copenhagen
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3554. The effect of the variation of PV's effective capacity during the day-hours on the optimal capacity mix in a Cournot wholesale electricity market

Invited abstract in session MD-9: Uncertainties in the Energy Transition, stream Energy Markets.

Monday, 14:30-16:00
Room: 10 (building: 116)

Authors (first author is the speaker)

1. Irena Milstein
Faculty of Management of Technology, Holon Institute of Technology
2. Asher Tishler
Faculty of Management, Tel-Aviv University
3. C.K. Woo
Education University of Hong Kong

Abstract

This paper evaluates the effect of the variation of PV’s effective capacity across the day-hours and the seasons of the year on the optimal capacity mix, generation levels and prices of a wholesale electricity market in which power producers use natural gas (NG) and photovoltaic (PV) technologies. The actual levels of PV’s effective capacity during the day hours resemble the probability distribution function of a normal variable; it is very low in the morning, grows steadily until it reaches its maximal level during the midday hours, and then continuously declines during the afternoon hours. The shape of this distribution varies across the seasons of the year. Applied to Israel’s stylized electricity market in 2030, we find that representation of PV's effective capacity by only two levels ("high" during midday hours and "low" during morning and afternoon hours) yields very similar optimal capacity mix to a representation in which PV's effective capacity changes during every hour of the day and over the four seasons of the year. We also show that using some NG during the day hours mitigates daytime price spikes and enhances consumer welfare. Finally, we show how technology improvements to the PV technology reduce the optimal PV capacity and electricity prices during the day hours.

Keywords

Status: accepted

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