“Capacity and Energy Markets for Stable Renewable Economy”
Mohammad Rasouli, University of Michigan
Wednesday, November 30, 2016 2:00 – 3:00PM EEB 248
Abstract: Existing supportive mechanisms for investment on renewable energies are not sustainable with higher penetration level of renewables. Rather, these mechanism should be replaced by market mechanisms. On the other hand, spot markets in place for conventional energies already suffer from underinvestment problem and there is an ongoing debate on the use of capacity markets for motivating sufficient investment.
In this talk we discuss the economical origins of underinvestment in conventional economies, and how renewables will change the situation. We propose a block investment market mechanism with forward moving approach that has the following features. (F1) The expansion and production allocations corresponding to the unique Nash Equilibrium (NE) of the game induced by the mechanism are the same as those that maximize the sum of utilities of the producers and the demand. (F2) It is budget balanced. (F3) It is individually rational. (F4) It is price efﬁcient that is, the price for electricity at equilibrium is equal to the marginal utility of the demand and to the marginal cost of production by producers with free capacity.
Bio: Mohammad Rasouli is a PhD student in EECS: Systems joint with MSc in Economics at University of Michigan. He has received his Bachelor in EE from Sharif University of Technology. He uses stochastic control, game theory and mechanism design to study emerging cyber-physical systems including energy systems and cyber-security.