TY - JOUR
T1 - Strategic Policymaking for Implementing Renewable Portfolio Standards
T2 - A Tri-Level Optimization Approach
AU - Kim, Jip
AU - Bialek, Sylwia
AU - Unel, Burcin
AU - Dvorkin, Yury
N1 - Funding Information:
This work was supported by the U.S. National Science Foundation under Grant CMMI-1825212 and by Alfred P. Sloan Foundation under Grant 9084.
Publisher Copyright:
© 1969-2012 IEEE.
PY - 2021/11/1
Y1 - 2021/11/1
N2 - 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.
AB - 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.
KW - Renewable support policy
KW - column-and-cut generation
KW - decomposition technique
KW - renewable portfolio standard
KW - state regulator
KW - tri-level optimization
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U2 - 10.1109/TPWRS.2021.3078726
DO - 10.1109/TPWRS.2021.3078726
M3 - Article
AN - SCOPUS:85105874959
SN - 0885-8950
VL - 36
SP - 4915
EP - 4927
JO - IEEE Transactions on Power Systems
JF - IEEE Transactions on Power Systems
IS - 6
ER -