Feasibility Study of Commissioning a Power Capacity Market for High-Consuming Customers in Iran energy Stock

Document Type : پژوهشی

Authors

• Zeinolabedin Sadeghi
• Hamid Reza Amir mahani

https://doi.org/10.22067/pm.v21i7.43021

Abstract

Today, a good investment in the electricity industry is one of the important
concerns of policy makers and power market authorities; Nowadays power
industry suffers from the long-term fluctuations in the investment sector and
consequently in the power generation capacity. But one of the necessary
measures for preventing instability and volatility of investing in the field of
power capacity is to commission a capacity market.
This study evaluates feasibility of commissioning a capacity market in Iran's
power market, while introducing capacity market and evaluating the
feasibility of investment in the construction of power plant using different
technologies.
Based on the results of this study, combined cycle technology has the lowest
price and the highest price belongs to the solar power plants. Approximately
the cost incurred per kilowatt hour of solar power plant is more than twice
the cost of combined cycle power plant. The increase in the exchange rate
has caused the capacity costs to be almost doubled in both scenarios and this
suggests the importance of the exchange rate in the field of capacity costs
and also in financing the power generation projects. However, such an
increase is different among various technologies.

Keywords

• Capacity Market
• Power Plant
• Investment
• Capacity Pricing

References

[1] Bernard,J. & Roland , M.(2000) .Load Management Programs, Cross-

Subsidies and Transaction Costs: The Case of Self-Rationing. Resource and

Energy Economics ,(22).

[2] Doorman , G. and Solem , G.(2005). Capacity Subscription and Its Market

Design Impact. By: SINTEF Energy Research of Norway.

[3] Doorman, G. (2005). Capacity Subscription: Solving the Peak Demand

Challenge in Electricity Markets. IEEE Transactions on Power Systems,(20).

[4] Flavin, C. & Lenssen, N. (2002). Power Surge: Guide to the Coming Energy

Revolution. (translate by: sedighi, A. ). Publication By: nashr e ney (in

Persian).

[5] Jenkins, C. Neme, C. and Enterline,S. (2011). Energy efficiency as a resource

in the ISO New England Forward Capacity Market. Energy Efficiency .4:31–

42.

[6] Joung,M. Baldick,R. and Kim,J.(2009). Strategic Behavior in Electricity

Capacity Markets. Proceedings of the 42nd Hawaii International Conference

on System Sciences.(1)

[7] Kirschen, D. & Strbac, G. (2004) Fundamentals of Power System Economics.

John Wiley & Sons, Ltd .UK.

[8] Malik,A.S. & Al-Zubeidi, S. (2006). Electricity Tariffs Based on Long-Run

Marginal Costs For Central Grid System of Oman. Energy ,(31).

[9] Nabavi, A. (1996). Accounting Fundamentals 2. Publication By farvardin (in

Persian).

[10] Oren, S., Smith, S. and Wilson, R. (1985) Capacity Pricing. Econometrica

,(53).

[11] Panzer,J. & Sibley,D. (1978). Public Utility Pricing and Output under Risk

the Case of Self-Rationing. The American Economic Review,(68).

[12] Perman, R. Yue Ma, Mcgilvray J.& Common, M. (2003). Natural Resource

and Environmental Economics. Third Edition Pearson Education Limited.

[13] Shahidehpour, M. Yamin, H. & Li, Z.(2002). Market Operations in Electric

Power Systems: Forecasting, Scheduling, and Risk Management. Wiley-IEEE

Press. [14] Söder,L.(2010). Analysis of Pricing and Volumes in Selective Capacity

Markets. IEEE Transactions on Power Systems,25 (3) 1415 – 1422.

[15] Stoft, S.(2002). Power System Economic Designing Markets for Electricity.

Publication By: IEEE.

[16] Sun,Y. Wu,F. and Hou,Y.(2010) Financing Long-term Generation Capacity

in a Reference Price Oriented Capacity Market. Proceedings of the 43rd

Hawaii International Conference on System Sciences,(1)

[17] Tishler,A. Milstein,I. and Woo,C.(2008). Capacity Commitment and Price

Volatility in a Competitive Electricity Market .Energy Economics,30,1625-

1647.

[18] United Nations. Dept. of Economic and Social Affairs (1972). Electricity

Costs and Tariffs: A General Study. Publisher Department Economic and

Social Affairs.