Optimization Decision Model of Electricity Market under Renewable Portfolio Standard

Renewable portfolio standard (RPS) is a policy to promote the development of renewable energy in many states and regions such as the United States and Australia. Renewable energy company can not only sell electricity in the electricity market, but also obtain renewable energy certificate (REC) to sell to power users to obtain additional profit. Based on the above framework, a bi-level optimization model of multi-body decision including day-ahead market, real-time market and REC market under the RPS has been established, and it has been transformed through Karush-Kuhn-Tucker conditions, strong duality theorem, binary expansion method, etc. It is converted to a mixed-integer linear programming to find the market equilibrium. The case study analysis explores the impact of renewable energy output, market power, and REC market on the joint market equilibrium of the electricity market and REC market. The results show that renewable energy output shows a certain negative correlation with local marginal price. The introduction of the REC market is conducive to weakening the market power and strategic bidding behavior of renewable energy company.