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SUMMARY:Strategic Storage Use in a Hydro-Thermal Power System with Carbon 
 Constraints - Afzal Siddiqui (University College London\; Stockholm Univer
 sity\; Aalto University)
DTSTART:20190322T111500Z
DTEND:20190322T120000Z
UID:TALK121465@talks.cam.ac.uk
CONTACT:INI IT
DESCRIPTION:The Northeast Power Coordinating Council (NPCC) comprises Amer
 ican states and Canadian provinces marked by a significant penetration of 
 variable renewable energy sources (VRES) and hydropower production. Major 
 demand centres in New England\, New York\, Ontario\, and Qu&eacute\;bec th
 at are subject to stringent to stringent caps on CO2 emissions are include
 d in the NPCC. For example\, the Regional Greenhouse Gas Initiative (RGGI)
  mandates a 30% reduction in CO2 emissions from power plants by 2030 relat
 ive to 2020 levels\, which affects generation in New England and New York.
  Likewise\, Qu&eacute\;bec participates in the Western Climate Initiative 
 (WCI)\, which aims to reduce CO2 emissions by approximately 40% by 2030 re
 lative to 1990 levels and included Ontario until recently. Both RGGI and W
 CI create cap-and-trade (C&T) systems for CO2 emissions in which the shado
 w price on the binding CO2 emission constraint is the permit price that ge
 nerators incur as an additional cost for their CO2 emissions. While suppor
 t schemes such as feed-in tariffs and the C&T system have induced an incre
 ase in VRES generation\, they have also enhanced the role of energy storag
 e\, viz.\, by hydro reservoirs especially in Qu&eacute\;bec. In a perfectl
 y competitive power system\, storage capacity would be deployed in a socia
 lly optimal way to smooth out the fluctuations in uncontrollable VRES outp
 ut. However\, given the persistence of market power in the electricity ind
 ustry\, hydro reservoirs may be used in a strategic manner to the benefit 
 of their proprietors. Consequently\, incentives for VRES and social welfar
 e may be detrimentally affected by such exertion of market power. In order
  to investigate the extent of these distortions in the NPCC and to propose
  policies for their mitigation\, we develop a bottom-up equilibrium model 
 to quantify the welfare losses from the strategic use of hydropower reserv
 oirs and to assess counterfactual CO2 emission caps. <br>Co-authors: S&eac
 ute\;bastien Debia and Pierre-Olivier Pineau
LOCATION:Seminar Room 1\, Newton Institute
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