Impact of an optimum renewable portfolio standard in the system adequacy and its effect on the wholesale electricity market : Dominican Republic

Abstract

As in any other country, the security of electricity supply is essential to the development of Dominican Republic. With the ongoing growth of renewable energy sources of electricity in the country, its power system adequacy may be deteriorated due to the low price cap established in the wholesale market. This work proposes two methodologies based upon a linear programming model for optimizing generation investment and operations that try to solve this oncoming problem. Both methodologies measure the impact of different scenarios of renewable share, while at the same time determines a new price cap that ensures better reliability levels. These methodologies could be implemented by setting a Renewable Portfolio Standard (RPS) that resembles the best scenario of renewable share in the market according to the results. For both methodologies, an RPS of 13% with its corresponding increase in the price cap, could be consider as “optimal” or at least the preferable one, as it would result in the best improvement in reliability. This enhancement in reliability serves as a basis to remunerate renewables based on their Effective Load Carrying Capability (ELCC), which resulted in 15.2%. For any of the methodologies to work, some adjustments must be made regarding the market and regulatory design, as well as necessary improvements in the infrastructure of the power system.