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Power Systems Optimization to Analyze Renewable Energy Policy and Resource Diversity

CSS Publication Number
Full Publication Date
December 11, 2014

This thesis is organized into two chapters, which will be submitted separately for publication. The abstracts for each chapter are given below.

Chapter 1: Many state-level Renewable Portfolio Standards (RPS) include preferences for solar generation, with goals of increasing the diversity of new renewable generation, driving down solar costs, and encouraging the development of local solar industries. Depending on their policy design, these preferences can impact the RPS program costs and emissions reduction. This study introduces a method to evaluate the impact of these policies on costs and emissions, coupling an economic dispatch model with optimized renewable site selection. Three policy designs of an increased RPS in Michigan are investigated: 1) 20% Solar Carve-Out, 2) 5% Distributed Generation Solar Carve-Out, and 3) 3x Solar Multiplier. The 20% Solar Carve-Out scenario was found to increase RPS costs 28%, while the 5% Distributed Generation Solar Carve-Out increased costs by 34%. Both of these solar preferences had minimal impact on total emissions. The 3x Solar Multiplier decreases total RPS program costs by 39%, but adds less than half of the total renewable generation of the other cases, significantly increasing emissions of CO2, NOx , and SO2 relative to an RPS without the solar credit multiplier. Sensitivity analysis of the installed cost of solar and the natural gas price finds small changes in the results of the Carve-Out cases, with a larger impact on the 3x Solar Multiplier. Setting the correct level for a solar multiplier to achieve one’s goals may prove difficult in light of changing costs associated with multiple technologies. The effective use of a credit multiplier can undermine objectives to increase renewable generation and decrease emissions, but do allow market forces to determine the level of solar development relative to other qualified renewable options. The Solar Carve-Out scenarios have a smaller impact on other non-solar related objectives, but may compel the development of high-cost solar, increasing the cost of implementing an RPS.

Chapter 2: The variability of wind power introduces new challenges for the operation of the power system, including increased system ramping requirements. One method to reduce wind variability is to diversify the wind power resource by interconnecting diverse wind resources across a larger geography. This study uses a modified version of mean-variance portfolio optimization (MVP) to assess the potential for diverse wind to reduce the impacts of wind variability. To understand the value of the reduced variability to the power system, different portfolios of wind power are assessed using a unit commitment and economic dispatch model. Using MVP, diverse wind portfolios are shown to significantly reduce wind power variability, at the cost of increased installed wind capacity to meet the same level of wind generation of less diverse wind portfolios. However, the value of the reduced variability is complicated by complexities of the power system, including transmission constraints and the time of day of ramping need.

Research Areas
Energy Systems

Grid Integration, Optimization, Renewable Energy, RPS

Publication Type
Master's Thesis
Digital Object Identifier
Full Citation

Novacheck, Joshua. (2014) “Power Systems Optimization to Analyze Renewable Energy Policy and Resource Diversity.” Master's Thesis, University of Michigan: Ann Arbor 1-41.