A Stochastic Multi-Agent Resource Planning Model: The Impact of Capacity Remuneration Mechanisms

This paper presents a stochastic multi-agent resource planning model, to investigate the impact of capacity remuneration mechanisms and high penetration levels of variable renewable energy resources on the system generation portfolio in a competitive market environment. In addition to the well-known missing money problem in electricity markets, increasing penetration levels of stochastic resources pose new challenges to system planners in achieving least-cost resource adequacy. As a result, various capacity remuneration mechanisms are considered to promote sufficient capacity investments. This work is envisioned to provide insights into how different capacity remuneration mechanisms and uncertainty associated with the stochastic resources can affect investment and retirement decisions of individual profit-maximizing generation companies as well as system-wide resource adequacy. The numerical analysis illustrates potential use and effectiveness of the presented modeling framework.