LOPF Problem - Bus marginal prices going up with higher ren shares

[Sebastián Rivero Equiza]

Dear all,

I am running an LOPF for an electricity network with hourly resolution allowing the expansion of renewable generators (p_nom_extendable=True), storage units (p_nom_extendable=True) and lines (s_nom_extendable=True) with a renewable share constraint (in this case: 80% overall yearly ren_share), and I am facing a problem with the bus marginal prices that I get.

The base case model (no expansion of renewables, storage units and lines) produces bus marginal prices of around 30-40EUR/MWh. The marginal cost of the conventional generators is around 47 EUR/MWh, while renewable generators have a specified marginal cost of nearly 0 EUR/MWh.

When I run the LOPF for a small timeframe (100 snapshots, before running the entire year) allowing the before mentioned expansions I end up with bus marginal prices higher that 100kEUR/MWh (absurd marginal prices, way higher than the ones of the base case model).

Why are the marginal prices of the buses increasing if the renewable generation (with 0 EUR/MWh marginal cost) is going up and less conventional power (with higher marginal cost) is being dispatched?

Thank you in advance.

Sebastián

[Fabian Hofmann]

Hey Sebastian,

note that in a long term equilibrium (given by the optimized capacity expansion model) all generators have to recover OPEX **and** CAPEX from the revenue (the revenue is given by the production times the marginal price). So, it is normal that the market prices exceed the marginal price of the most expensive generator in the market as the costs for capacity expansion have to by recovered as well. This drives the prices. Typically some time steps have very high prices.

Note that also your 80%-VRES constraint alters the prices. Through this constraint the prices are rather pushed down again as it is an external constraint which relieve costs from the system. In contrast, a global CO2 constraint would add costs to the system.

You can also have a look at Tom's market value paper for more information https://arxiv.org/abs/2002.05209.

Best

Fabian H

--
You received this message because you are subscribed to the Google Groups "pypsa" group.
To unsubscribe from this group and stop receiving emails from it, send an email to pypsa+un...@googlegroups.com.
To view this discussion on the web, visit https://groups.google.com/d/msgid/pypsa/8c6a8e47-d14f-401f-bda6-c661b7eca842n%40googlegroups.com.

-- 
Fabian Hofmann 

Postdoctoral Researcher
Institute of Energy Technology
Technische Universität Berlin

Group website: https://tub-ensys.github.io/

[Sebastián Rivero Equiza]

Dear Fabian,

Thank you very much for the comprehensive answer.

I had the (wrong) understanding that the bus marginal prices were simply calculated using the dispatch of the generators/storage units and their respective specified marginal_cost.

Best regards,

Sebastián