Prices, reliability of supply and large scale wind generation in electricity markets

Abstract

This thesis focuses on anticipating electricity prices, reliability of supply, and emissions in deregulated energy-only markets in the medium and long term considering both the large-scale integration of wind generation and other inflexible generation and the strategic behavior of other flexible generators. The first part of this thesis evaluates the effects of large-scale wind powered generation on the fixed cost recovery of existing conventional generators and the ability of existing conventional generators to profit from economically withholding energy. The anticipated impact on reliability of supply and prices in the medium term is also evaluated. In the second part of the thesis, a general model of long term equilibrium that allows for generation additions and retirements is developed and applied to determine the distribution of electricity prices and reliability of supply at equilibrium assuming competitive, inflexible, and strategic generator behaviors. The third part of the thesis applies Probabilistic Neural Networks (PNN) to model complex individual generator behaviors. The PNN are integrated in simulations of existing markets to anticipate prices, the likely entry of new generation, reliability of supply, and emissions in the medium term.